Nigerian operator MTN has pledged to add digital services developed in-house to its digitization portfolio, a move that will help solidify the operator’s value and industry chains, position MTN as an ecosystem architect, and create new revenue streams.
While the Internet of Things and virtual reality have landed in the developed world, operators in emerging markets are struggling to find new ways to grow and generate profits. Caught in the trough of a U-shaped recovery curve, for them the economic and industry outlook remains stubbornly sluggish.
With a penetration rate of less than 20 percent, smartphones have yet to reach the masses in West Africa. Despite the dominance of feature phones and relatively low individual disposable income, users still want the same digital entertainment experience as smart phone users get – a demand that’s tough to deliver on for a number of reasons.
The first major obstacle is that low smartphone penetration makes it difficult to deliver content to over three-quarters of Nigerians. The second is that although the nation has a strong entertainment culture, with Nollywood coming in as the second largest film industry in the world, very little homegrown content is carried by mainstream OTT platforms. And third, only 10 percent of Nigeria’s population of 180 million has a bank account, meaning that content and service providers lack convenient and secure payment and monetization channels. The broken industry chain also means that many artists and content partners are unable to monetize their content, and distribution is poor on traditional sales channels such as CDs, VCDs, and film.
However, the opportunity for operators to provide their own digital services exists. Certainly, being the first mover to enrich people’s communication and entertainment lives will inevitably pay huge dividends both in revenue and branding.
MTN’s 2020 Digital World strategy seeks to do exactly that by becoming the continent’s first digital entertainment brand.