digital inclusion for all in south africa - mtn group...africa’s commodity wealth is enhanced by...

Digital Inclusion for all in South Africa

Karel PienaarCEO (MTN South Africa)

Copyright 2008 © Mobile Telephone Networks. All rights reserved.

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The question is not only how do we light up the African continent...

but how do we continue to lead this space from South Africa?

Broadband Internet users and traffic

Look at the world at night…Also reflective of the reach of broadband connectivity…

more than one billion

people now live here

The amount of internet traffic generated by the African continent is still just a

fragment of global internet traffic… especially compared to the US and Europe


3

Africa’s commodity wealth is enhanced by becoming a key player in the world’s energy markets…

Africa’s share of world commodities Copper production growth (2006−10)

Proved oil reserves

billion barrels (2011)

Africa had 9.5% of world’s crude oil and 8% of the world’s natural gas reserves at the end of 2011

The commodity dividend is creating a platform for wealth

Customer needs are changing fast… and

so are their needs for communication

Consumers move from a world of voice

minutes, texts and BBMs to integrated price

plans, applications, mobile Internet access,

mobile video, content creation and sharing.

African

Growth

Source:

Freemantle, SBSA

Trend 1

Trend 2

Trend 3

Trend 4

Trend 5

Larger, younger and more affluent

population

Fast urbanisation and jobs growth

Leapfrogging through technology and

mobile internet services and apps

New commodity wealth

Fast expanding financial sector


4

The demographic and commodities dividend means job creation

Africa’s labour force will grow by 122 million over the next ten years, and will be the

largest in the world by 2035… overtaking India and China in terms of growth.

Substantial Growth in the Economically Active

Population (Age 15-65)

Africa as a continent has 52 cities

with more than 1.0m residentsAlmost the same number as in Europe

and more than Latin America (McKinsey

Global).


5

Africa has almost 20% of the world population but only about 2-

3% of global broadband subscriptions

Fixed Line Broadband Penetration

(end of 2011)

Mobile Broadband Penetration

(end of 2011)

Source: ITU Broadband Commission Report (The State of Broadband 2012)

Africa 2.7%Africa 0.2%


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Internet User Penetration

21% (SA ranked 109th)

(More like 55%)

Fixed Line Broadband Penetration

1.8% (SA ranked 104th)

Mobile Broadband Penetration

19.8% (SA ranked 47th)

(More like 50% )

From a fixed line perspective SA is sliding back relative to other developing

economies, but the gap between us and nations above us is widening

Our national performance is also reflected by the ITU from a

broadband penetration perspective

Mobile is winning this race because of the fact that these technologies are

designed to achieve the reach and scale needed for success

Copyright 2008 © Mobile Telephone Networks. All rights reserved. 7

69 million

Projected iPad sales for 2012

120 million

Projected Tablet sales in 2012

350 million

Projected PC/laptop sales in 2012

16 million

Total subscribers to largest 25 US newspapers

14 million

Total number of Netflix subscribers

23 million

Total number of Xbox Live subscribers

116 million

Projected iPhone sales in 2012

37 million

Nokia smartphone sales in 2012

600 million

Total smartphone sales globally in Q1 2012

1.0 billion

Projected global smartphone sales in 2014-15.

425 million

Global Gmail users

310 million

Global Yahoo! Mail users

360 million

Global Windows Live Hotmail users

500 million

Active Windows Live Messenger Accounts

500 millionMicrosoft Word Users

What is happening around the ICT industry?

2.5 billion users Internet users globally

1.4billion

Television sets

1billion

Google users

950million

Facebook users

900million

Microsoft users

South Africa has one of the highest uptakes of new services such as Facebook

and Twitter in the world… despite lagging broadband penetration… high demand


Social networking is dominating the Internet discussion

But there is a lot more happening in the mobile space…

• Ongoing shift towards everything mobile

- E-Commerce & M-Commerce

- Digital Services (OTT, Cloud, Apps)

• More and more social interaction via mobile

- Explosion in on-line always connected communities

- Ongoing shift towards always-on relevance of information

• More and more connected wireless devices

- Multiple devices by consumers (phones, laptops, tablets etc)

- Explosion in machine to machine communications

- Leveraging the possibilities of Cloud Services

• Transforming key industries

- Health

- Education

- Advertising

- E-Commerce

- Financial Services

- Content & Entertainment

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• Many new business models are

emerging as a result…

• Investment in these models come

with many unknowns…

• And a need for rapid innovation…


Mobile technology is increasingly helping resolve traditional limitations of

education in two key areas: Access and Personalization.

Emerging m-Education solutions also illustrate the power of mobile technology in addressing

some challenges affecting the quality and effectiveness of education for learners.

Education is taking on a whole new meaning on mobile...

it is becoming Ubiquitous and highly Personalised

Transforming Textbooks

into a Rich Multimedia

Experience

• Virtual class rooms

• Wider geographic reach

• Fewer language barriers

• Real time access

• Customisation

• Collaboration

• Research

Relevant

Content

Structured DeliveryEngagement and

Learning

Formative

EducationSummative

Education

Reach

an

d R

ele

van

ce


The world of money and payments is shifting significantly

Financial services and payments are shifting into the palm of the hand.... onto mobile.

No restricted Operating Hours and Queues. Payments and Banking for everyone!


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Cloud based services will play a key role

• Productivity

• Africa wide scale

• Interoperable mobility

• Total cost of ownership

• Reach as many people as possible

- Cell phones

- Smart phones

- Laptops & Tablets

• Enabling small and larger

businesses

Cloud based services and applications can reach across many frontiers

that makes it impossible to achieve scale today…


Where are we as a industry in SA?

• Mobile data & broadband evolution to date:

• Fixed line services adoption have slowed

down, physical reach remains limited.

• Some early attempts at FTTx feasibility in high

density areas is fast becoming a reality.

• Infrastructure sharing especially with fibre and

passive network infrastructure is a reality.

• Active RAN sharing will also become a reality

• Investment in the order of R200Bn is required

by the Operators

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“The number of Internet users in

South Africa accelerated

dramatically in the past year. This is

due to the impact of both

smartphones and ordinary mobile

phones. As a result, the Internet is

finally arriving in the hands of the

mass market.” Source: Worldwideworx

• 7.7M only have access via their

smartphones

MTN VC Total

Mar-12 Act 11488000 12200000 23688000

Mar-13 fc 13000000 13400000 26400000

Mar-14 fc 14000000 14200000 28200000

0

5000000

10000000

15000000

20000000

25000000

30000000

un

iqu

e u

sers

Reported Monthly Unique Internet Users


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MTN is adapting to meet fast changing customer needs…

Expanding the Network & Infrastructure Layer

Passive Infrastructure Radio NetworkCore Network Backbone Connectivity

Enriching the Traditional Services Layer

Voice DataMessaging VAS

• Passive Infrastructure

• Fibre Infrastructure- Undersea cables

- National long distance

- Landing stations

- Metro fibre

• Multinational Services

• Digital Communication

• Converged Services

- Integrated Price Plans

- Customised Solutions

• Cloud Services

• Data Centres

• Devices

• Content

• Applications

• Accessibility

• Digital Services

En

d t

o E

nd

User

Exp

eri

en

ce

Transforming Industry Verticals

Education FinanceHealth Automation

Carrier to Carrier,

Wholesale and

ISP Services

Wholesale SegmentBusiness SegmentConsumer Segment

Access Network


MTN Bringing the Internet to South Africa and Africa ….

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Tygerburg

Harrington

Great

Westerford

George

East London

Kimberley

Bloemfontein

New

Germany

Berea

Empangeni

Overport

Nelspruit

NDF

Randburg

JSE

Gallo

ManorRosebank

Polokwane

Port

Elizabeth

Pretoria

Leveraging Global and Local Infrastructure for Broadband Internet service delivery

One network serving all initiatives ensuring economy of scale across Urban and Rural areas

Regional Hubs supporting urbanisation for smaller Towns and Rural access


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Data growth is exponential and still accelerating

2012 2013 2014 2015 2016 2017 2018 2019 2020

Tera

byte

s(T

B)

LTE-A

LTE

By 2020 it is estimated

that Fibre, LTE and LTE+

technologies will carry

more than 60% of total

data traffic on the mobile

networks in South Africa.

We are just at the beginning

of the data age explosion

Current technologies alone cannot do

this… and neither can future

technologies… it is the combination that

works.0

1000

2000

3000

4000

5000

6000

2012 2013 2014 2015 2016 2017 2018 2019 2020

Incremental Number of Site Nodes

Incremental Number of Physical Sites

Total Broadband Investment levels

in South Africa for LTE and Fibre to

the Home needs to be in the order

of R200Bn


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Nationally we are at a crossroads on global competitiveness

LTE helps to bring the capacity and cost efficiencies to the high end base.

South Africa has no choice but to move fast on LTE. Nationally we do not have an alternative.

We need this urgently to continue to improve overall speeds to users of all technologies in

order to (remain competitive globally).

Source: Capgemini

One technology alone cannot

address the market or solve

every problem.

These technologies are

stacked together and we need

to combine them

2020 vision is looming

Blended Average R/Mb


SA’s 2020 vision... Broadband for all. The current Broadband

speeds

• Broadband for all

• 100% voice penetration

• 100% Internet access

• SA’s Department of Communications

• Achieve at least 80% penetration on voice and

Internet access

• MTN’s view

• 100% broadband is entirely possible

• LTE is the catalyst but needs to be used in

conjunction with 3G/HSPA and 2G/EDGE

• Has to be done in a way that also drives device

penetration and new services

• This is all about scale

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A broadband Internet access service is a service which

provides access to the Internet with a minimum download

speed of 256 kbps

ISPA Broadband Def – SA 256kbps

Australia ….. 10 to 100 Mbps

European Union …. 30 to 100 Mbps

Australia’s targets specify 100% coverage, with 93% at 100 Mbps and 7% at 12 Mbps

The EU has a dual objective for 2020 of 30 MB for all households & 100 MB for 50% of households

MTN 2020 Vision

MTN’s target is provide access to the

Internet with a minimum download speed

of 100Mbps in Dense Urban and Urban

areas and 5Mbps in Rural areas


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We need to become more effective as an industry… including government

But the gap is widening at an accelerating pace. We need speed in

policy and execution, and we need it fast…

• Despite improved download speeds to around 3.18Mbps in less than 2 years…

• But still falling further behind the global average now at 11.66Mbps…

• We cannot do this better without scale and efficiency

- Sufficient LTE spectrum…

- Effective use of the USO funds

- A number of Options to effectively use the funds in support of the 2020 Vision

- Wayleave approvals

- Environmental approvals

- SOE uncertainty…

- Digital dividend…

• And we need to get a serious discussion going on Public-Private investment…

South Africa is 115th out of 178 countries on download speeds because of delays in decision

making… and we are still dropping down the list (Source: Net-Index)

The gap is

widening


Full Steam Ahead

Thank You

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digital inclusion for all in south africa - mtn group...africa’s commodity wealth is enhanced by...

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