MTN rebrands as telcos turn to tech

As the world increasingly becomes digitised, African telcos are calibrating their business models towards fully integrated digital and financial services enterprises. Continental telecoms giant MTN Group is the latest telco to go down this route.

In February, it shed its traditional branding to reflect the Group’s new business strategy, Ambition 2025, the goal of which is to become a dominant provider of digital solutions in Africa.

The new identity, its second rebranding since the Group’s formation in 1994, replaces the old red-and-white lettered logo with all-blue letters surrounded by an oval. A new slogan, “Y’ello”, replaces its mobile-era strapline, “Everywhere you go”.

Moving with the market

The global operating environment for telcos is constantly evolving. The advent of Covid-19 and the digital acceleration that came with it has heightened the importance and indispensability of connectivity for the purposes of education, teleworking and e-commerce.

The changing business landscape presents MTN with a need to diversify into digital services and to tap into data and financial services as well as infrastructure and enterprise businesses, areas that are all in the formative stages of growth in Africa.

Explaining the change, Bernie Samuels, MTN Group executive for marketing, says the company now views itself as a technology company rather than a telco. 

“We are living in a completely different world. We were born into an analogue era and our customers today live in the social and digital space. Quite frankly we don’t want to be left behind. Our competitor set has changed. We don’t only compete with the telcos down the road, we are competing with the biggest digital brands across the planet, so it’s a battle for mind share,” she explains.

Centring on the youth

President and chief executive Ralph Mupita has confirmed that the Group intends to harness Africa’s potential and progress by driving digital and financial inclusion. While the company remains focused on all its customers and stakeholders, Mupita says that a major part of the company’s future focus will be centred on the youth.

Africa has a burgeoning young population. In 2020, almost a billion people were under the age of 35, representing about 23% of the world’s youth population.

“The alignment is perfect. We are shifting from being seen as a predominantly telco business to a company that feels relevant and fresh for the youth market we are trying to target across Africa,” he says. 

Culture of agility

According to Dobek Pater, a telecoms specialist at telecoms consultancy Africa Analysis, by switching from a pure telecoms company offering voice and data into a provider of a broader range of technological services to its customers, MTN is moving in the same direction as its rivals.

“This is guided by evolving customer needs and the commoditisation of basic, infrastructure-based products, for example connectivity, voice and data. Focusing more on providing solutions (higher up the value chain) and expanding into adjacent markets will allow MTN to access new revenue streams and sell more products at a higher profit margin,” he says.

“MTN is using the underlying access to the customer to cross-sell and upsell these new products to grow its share of the customer’s wallet.” 

He adds that in nearly three decades, MTN has grown significantly, but the growth also came with a mindset common to large corporations that is more bureaucratic, less innovative and less agile.

“The objective of the new strategy and rebranding is to reinstate a culture of agility and entrepreneurship that prevailed at MTN in its early days,” he says.

He notes that the simplicity of the new brand design  indicates the company’s desire to promote the simplicity of its offering, even though the products themselves are sophisticated.

“This helps make the customers’ life easier and simpler from a technology use perspective and allows them to focus more on their own lives and achieving more by leveraging the technology.”

Ambition 2025 thus concentrates on five growth platforms: fintech solutions, digital services, enterprise services, network as a service and the application programming interface marketplace.

The potential market in these areas remains vast: 72% of people in sub-Saharan Africa are still not connected to mobile internet, 46% are unbanked, and 95% of payments remain cash based, with 90% of economies driven by small businesses. The number of mobile internet users is expected to grow from 303m in 2020 to 474m by 2025.

To achieve its growth strategy, the Group is looking to hire around 150 digital experts to meet the growing digital demand.

Metaverse ambitions

At the end of February, soon after its rebranding, MTN became the first African company to enter the metaverse when it purchased 144 plots in Ubuntuland, a virtual world created by South African company Africarare. It allows virtual real estate to be traded and used for purposes such as art exhibitions, games, and social experiences.

MTN’s investment into the metaverse is viewed as a step in the group’s embrace of fintech. Pater says despite being in its very early stages, its entry into the metaverse represents a learning and exploration opportunity for MTN.

“MTN is trying to assert itself early on as a significant participant in this new ‘universe’. As it grows, MTN will be able to benefit through the provision of new technological solutions to its customers to fully participate in the emerging new reality. This is in line with MTN’s Ambition 2025 strategy and the message that its new brand wants to convey,” Pater observes.

According to the company’s results for the year ended 31 December 2021, MTN has 272.4m subscribers. Greater adoption of data and fintech services resulted in the addition of 11.1m new data users and 10.4m new mobile money users, to reach totals of 122m and 56.8m respectively.

In transforming from a telco to a technology company, MTN follows in the footsteps of another pan-African telco, Liquid Telecom, which last year changed its name to Liquid Intelligent Technologies and refocused itself to deliver digital solutions for African business.

Liquid started 20 years ago as a satellite company and then went on to build Africa’s largest broadband fibre network stretching over 73,000km. Its rebranding exercise expanded the company’s offering to include cloud business, cybersecurity services and other future technologies.