MTN GlobalConnect’s initiatives seek to bring the company closer to realizing its purpose of “enabling the benefits of modern, connected life for everyone.” In an exclusive interview with Telecom Review, MTN GC’s CEO, Frédéric Schepens, detailed the company’s recent milestones and latest financial results. He explained the challenges and opportunities, the steps being taken to achieve its Ambition 2025 strategy and its distinct workforce culture, among other informative insights.
MTN GlobalConnect has recently announced its partnership with 2Africa. What does this entail, and how can this mark a distinct milestone in the company’s journey?
2Africa will be the largest Subsea Cable in the world, at about 45,000 km, connecting Africa, the Middle East, Europe and Asia. The cable system will deliver about 180 Tbps of capacity to the African market, the highest of its kind in a single cable system.
Landing the 2Africa cable in Africa will allow MTN GlobalConnect to showcase, in a tangible manner, the importance of connectivity and creating the cross-border networks that connect Africa to the rest of the world. The 2Africa cable connection will go live in 2023, bringing seamless international connectivity to three billion people across three continents, representing 36% of the global population.
Strategic partnerships such as this one will enable MTN GlobalConnect to accelerate and deepen internet adoption and socio-economic progress across the African continent. As anticipated data traffic across African markets is expected to grow between four and fivefold over the next five years, we need to invest in infrastructure, capacity and collaboration to meet this growing demand.
Participation in the bold 2Africa subsea cable project enhances our existing portfolio of capacity and complements our terrestrial fiber strategy to connect African countries to each other and to the rest of the world. We are building scale infrastructure assets to meet the anticipated explosive growth in data traffic and accelerate the digital economy on the continent by creating a pan-African fiber railroad driving affordable connectivity.
After seeing MTN’s latest financial results, where you delivered a strong performance, how does MTN GlobalConnect plan to maintain and increase its earnings?
To reflect on our performance, recently shared in the MTN Group Annual Results update for 2022, our business delivered a positive performance. To highlight, we signed fixed external infrastructure deals valued at US$90.8 million, and MTN GlobalConnect’s external revenue grew by 19.3% YoY to US$344.4 million.
Our wholesale mobility services segment delivered a solid performance during the year, with revenue growth of 19.1%. We formed strategic partnerships with various stakeholders that grew aspects of our business, such as our partnership with AT&T Inc. in the USA, where we launched LTE roaming services, including Voice over LTE (VoLTE).
Connecting and expanding scale infrastructure assets across Africa remained a key priority for the year, with MTN GC rolling out approximately 5,157 km of new fiber in 2022. This brings our total inventory of proprietary fiber to over 105,157 km as of December 31, 2022.
To ensure our customers continue to enjoy the benefits of a modern, connected life, we have unlocked the power of connectivity on the African continent through continuous network evolution and strategic partnerships. We have invested significantly in subsea cable systems such as 2Africa, Google Equiano, EIG, ACE, WACS and EASSy.
With a focus on accelerating digital inclusion in our markets, MTN GC has formed a strategic pan-African connectivity partnership with Microsoft. This partnership will see MTN GC provide access to large-scale infrastructure services that will build capacity for Microsoft to drive digital transformation and enable a connected African continent.
Building on our resilient performance, we will aim to increase our earnings by continuing to enhance our partnerships and monetize the assets and platforms within our portfolio through greater utilization.
As a partner of choice, through our single point of contact system, we will continue to provide additional services to our growing list of customers.
We will also continue to make significant investments into our human capital, growing our team both in terms of talent and diversity, to enable us to service our clients in the most effective and agile manner.
As the world becomes smarter and more digitized, what are the challenges and opportunities that MTN GlobalConnect must face and surmount to remain successful?
The current trading environment remains challenging due to global escalating inflation and interest rates; local foreign exchange volatility and scarcity; and rising energy costs and power supply constraints in the markets in which we operate. As a capital-intensive business, we are constantly thinking about ways to drive value through capex investments and strategic partnerships to meet the level of traffic growth and data demand in Africa.
Africa’s explosive growth in data traffic presents an enormous opportunity for our business. The continent’s digital future rests with its youth, where the current median age is 20 years old. African consumers and enterprises are joining the global and digital economy at an unprecedented rate. We are therefore suitably positioned to build the critical platforms and railroads needed to accommodate this soaring data traffic, deepening internet penetration and increasing internet bandwidth on the continent.
What is MTN GC’s role in supporting international MNCs and local companies?
As a partner of scale, we offer our partners several opportunities, including but not limited to:
- Single doorway to Africa: Our partners can scale their businesses with a single-entry doorway into the most significant backbone network infrastructure in Africa.
- Single point of contact: Through a single contract, our partners can access 19 MTN operating companies with 289m mobile subscribers and the most significant backbone in Africa with over 105 000 km of proprietary-owned fiber.
- Digital connectivity platforms: We offer our partners access to multiple Y’ello Connect digital communication platforms for messaging, voice, signaling and roaming. To highlight, we have recently launched LTE roaming services, including Voice over LTE (VoLTE) between MTN GC and AT&T Inc., with roaming traffic levels now above pre-pandemic levels.
- Evolving business model: We are building an open-access model FibreCo, linking our submarine cable assets to new terrestrial fiber routes, touching seven countries and highlighted by three new routes connecting the East to the West Coast of Africa.
With a focus on Africa, we now have subsidiaries in five African countries (Nigeria, Ghana, Uganda, Zambia and Kenya), and we are continuing to add further presence across the continent. To further support our partners’ and customers’ ambitions, we have successfully opened customer success centers in Ghana and Kenya. These centers will ensure that we have tighter control measures and enhance the quality of our customer experience globally by enabling all support requests to be managed by our specialized MTN GlobalConnect employees. Our key initiatives will bring us closer to realizing our purpose of enabling the benefits of modern, connected life for everyone.
All eyes are on “Ambition 2025.” What elements do you consider key to achieving this vision?
The last five years have seen our business grow at a rapid pace. In line with our Ambition 2025 targets, we are set to rollout a total of 135 000 km of proprietary fiber by 2025, generating up to US$300 million in revenue. We are making significant progress in this regard, as seen from our latest set of results, which show that in 2022, our external revenue grew by 19.3% YoY to US$344.4 million. In 2022 we rolled out over 5 000 km of new fiber and our wholesale mobility services revenue grew by 19.1%.
Through our infrastructure business, we will continue to invest in our network evolution and find opportunities to form strategic partnerships to unlock the power of connectivity, deepening internet adoption and socio-economic progress on the continent. We are committed to extending and accelerating fast and affordable broadband access from the East to the West of Africa. Our fiber investments will enable an increase in data capacity penetration across Africa that meets the growing demand for capacity, diversity and resiliency of international connectivity. These investments will serve future demands on our ICT, Fintech and Digital applications.
Our Wholesale Mobility business will continue to evolve and continue to offer an array of future-fit digital connectivity services through our signaling, voice, messaging and roaming communication platforms, with a focus on trust and authenticity.
With ESG being a core focus, we will continue to optimize our processes and practices to ensure we achieve a maximum positive impact on the planet and the communities in which we operate.
With our eyes focused on unlocking opportunities in Africa and enabling our customers to scale their businesses, we will continue to expand our footprint and subsidiaries on the continent.
Our people are the center of our business, we will continue to attract the best talent, culture and future skills to create, build and operate technology platforms that are second to none.
Our structural separation of the fiber business is also underway and is targeted for completion in 2023/2024.
Our Ambition 2025 strategy is to lead digital solutions for Africa’s progress. We’re doing this with our strategic partners, working together to ensure we further digital inclusion in Africa, and we look forward to unlocking more opportunities that will strengthen our position as the leading pan-African digital wholesale and infrastructure services company.
Economic growth is becoming increasingly reliant on the youth as skilled talents. From your perspective, is this generation qualified to ensure a bright future? How does MTN GC cultivate its workforce in support of this?
Africa is experiencing rapid growth in unique mobile user penetration, which is expected to reach 50% — 614 million users — by 2025. Given that the current median age on the continent is 20, it is quite clear that the lion’s share of the continent’s digital economy sits with the youth. Not only do they possess the necessary skills, but they also have tremendous potential and deserve to be given the best possible opportunities to succeed, for if they prosper, so too will their nations.
It is therefore incumbent on us to provide greater coverage on the continent, thereby decreasing costs and driving positive social and economic impact in their lives. Through our investment in connectivity, we aim to create solutions that enhance opportunities and tackle some of the challenges that Africa faces.
Taking a closer look at our workforce, we have a multi-cultural and age-diverse workforce, of which more than 70% are youth, leaning on each other’s expertise and experience to deliver value for the business. We are invested in our people, enhancing their talents through various initiatives and programs to ensure they can provide the digital solutions our customers require. We have further built our succession plan, which includes diverse talents from different backgrounds and different skillsets, with the majority sitting in the youth segment, and we carry out career development plans for these successors.
As the world continues to change at a rapid pace, we have identified that the force and inspiration of our youngest leaders are important to our business. Understanding the challenges faced by our future generation, we are invested in building the talent pipeline of the future. Through the yearly graduate program, we provide a paid work experience to the youth, improving their employability and acting as a catalyst for economic growth and development. In the face of ever-changing technical landscapes, skillsets and cultural evolution, our graduates are supported by HR on their career journey and assigned to a line manager who acts as a mentor, imparting the necessary tools, skills, access, knowledge and opportunities they need to succeed. 25% of our graduates who have been through the graduate program have been placed permanently.