Tencent showed defiance on Wednesday, reporting profit of more than 30 billion yuan ($4.3 billion), for the second quarter of 2020.

The gain of the last three months came amidst intense pressure from the White House. Profit was up 28% compared to the second quarter of 2019. Revenue leaped 29% to 114.9 billion yuan ($16.5 billion).

Tencent’s two apps, WeChat and Weixin with over 1.2 billion monthly active users have become topics of interest to investors recently. Trump has targeted WeChat in his executive order last week, when he issued a 45-days ultimatum to both TikTok and WeChat to get acquired by American companies or get booted out.

CNN reported that during a call with investors, executives addressed the ban saying it doesn’t appear to target Weixin, which is the much bigger app.

“They are two different products. Weixin is a chat [app] to serve the users in the mainland of China, while WeChat is a sister product which serves users outside of the mainland China,” chairman and CEO Ma Huateng said.

WeChat and Weixin are responsible for a large part of Tencent’s revenue, and market analysts are concerned that Trump’s order may target Weixin, but executives say the app is far from it.

“Based on our initial reading and subsequent press reports, the executive order is focused on WeChat in the United States and not our other businesses in the United States,” Tencent chief financial officer Shek Hon Lo said. “We are in the process of seeking further clarification.”

Trump’s order will stop WeChat from operating WeChat Pay in the US, a mobile payment service that has been embraced by many users of the chat app.

Tencent being a conglomerate multinational told investors that the United States is not its revenue base, that only 2% of its global revenue is derived from the US.

While the payment service has become integral part of its services, Tencent depends more on its internet gaming for revenue. With its line of games popular among online gamers, the US has become a top destination for many of them such as PlayerUnknown’s Battlegrounds (PUGB), that ranked 10th in the United States last year because it’s a top choice for online gamers in the country, according to analytics company App Annie.

But with the imminent WeChat ban, investors are worried that there will be significant revenue drop due to the loss of the US market.

But the company said half of its revenue for the second quarter came from Value Added Services and online games. Mobile payment and other financial services such as WeChat pay contributed only about 25% of revenue, while 16% came from ads.

Amidst the concern, the company’s stock has risen 2.5% in New York after it released its growth report on Wednesday. Tencent shares plunged 10% following the news that Wechat will be banned in the United States.

Meanwhile, Facebook and Snapchat are reportedly in talks to buy TikTok’s rival, Dubsmash, according to The Information. This is coming at a time when Microsoft and Twitter are bidding for the acquisition of TikTok.

The Trump administration came hard at the video app with the September 15 deadline. However, Facebook’s sudden move to acquire Dubsmash highlights how competitive short video apps are becoming among big tech companies. Facebook has launched Reels through Instagram as a way to counter TikTok’s popularity, but Microsoft’s potential acquisition of TikTok poses a new threat.

The report said Facebook and Snap approached Dubsmash about a deal worth millions of dollars. But the deal is likely going to stir further antitrust scrutiny for Facebook. The social media giant has been under investigation over monopolistic practices perceived through its acquisition of competitors.

Dubsmash is a video sharing app founded in 2014 in Germany. Users can choose an audio recording or soundbite from movies, shows, music, and the internet and record a video of themselves dubbing over that piece of audio.

With its multilingual capacity of 20 languages, the app has become a social media of interest.

“This book is a worthy read to all aspiring, low-fly and high-flying entrepreneurs, including those envious of the privileges that Dangote Empire has enjoyed. Noteworthy to say, I doubt Mr Aliko Dangote himself understands these privileges as a Conglomerate Tax (reward for helping Government out on high-pains by moving upstream) and not benefits of tribalism, feudalism, and/or Northern Nigeria cabalism.”

The critics like “The Dangote System”. (source of review)

You need to read this book; begin here.

I took time to browse through more than 100 comments on a piece on Tekedia titled “Nigeria Strikes The Perceived Choiceless MultiChoice (DStv, GOTv)”. Broadly, most are toxic. Some were directed at me for ever preaching the free market principle in the midst of an unbounded monopolist from South Africa. But the bulk went to MutiChoice and its brands – DStv and GOtv. Many of the commenters were fanatical: “leave Nigeria, MultiChoice” could be used to summarize the feelings. Of course, some defended my hypothesis of a free market and allowing market forces to work.

That is a big problem for MultiChoice. What is happening here is that MultiChoice is winning their purses and wallets but losing the customers. It is a very dangerous trajectory for any brand, and if the company does not fix it, it has no future as a company in Nigeria. Simply, when MultiChoice came, it turned consumers into customers and then got many into the level of fandom through its European football product. But over time, most of those fans are falling back to customers and even consumers. Yet, because there was no other option, they stayed as consumers, paying, even when they have lost it all with the company selling to them.

My recommendation to MultiChoice is to do reassessment of its business, and see how it could fix this paralysis. It needs to win the hearts of the customers even as it wins the wallets to protect its castle. For all the improving financials, MultiChoice has a problem in Nigeria: it is serving dissatisfied customers and that is not leverageable.

Comment on LinkedIn Feed

MultiChoice’s biggest problem is that it’s the only one, so it’s very easy to throw all the missiles to it.

MTN is not loved more than MultiChoice, the difference is that when you feel you are angry with MTN, you move to Glo, Airtel, or even 9Mobile; and by the time you go round and realise that MTN is not really as terrible as you cast it, you come back and become more humbled consumer, while still murmuring under your breath.

What do you think would happen if MTN were to remain the only telecom service provider in Nigeria? Obviously everything it does would be evil, because there’s no other avenue to check if it’s killing you or extending your life. As long as you are the only entity offering a service that many people need, naturally you will have many haters and detractors, it doesn’t matter how great you serve them. Humans enjoy having options, they never like being reduced to single choice.

Asking MultiChoice to fix the issue is asking it to do the impossible: keep customers happy, while remaining above water. You cannot achieve both, as long as you are the only provider.

In all of these, Nigeria is the problem, but since everyday people don’t know how to fight Nigeria, they normally direct the anger to companies.

Selected Comments…

U dont know what Dstv has done to us in this country. Dstv has push other Companies out of the country. But they dont want any other to come in. The issue with Dstv and the Government is DStv don’t want other digital TV to come and if they must come they should buy the right from them to show some sports. Like what is happening to Star time. If u will recall Italian league was viewed on star time immediately Ronaldo signed for Juventus they collected it back from star time and begin to show it. Is this good for Nigerians. When they go others will come. They want to be the God of sport and other should come in and be subjected to them. That is where the issue is? Forget all this economic story.

This writer must be their PR man.This is Nigeria not South Africa.

This is a rather jaundiced, myopic and parochial view.
Content is data, and data is just as tangible an asset as infrastructure.

If monopolies restrict access to it to the extent that the growth of competitors and of the wider industry is threatened then the role of any diligent regulator should be to decentralise that access.

If DSTV opts to retreat from Nigeria one can only expect that they be heading to a very enjoyable retirement having made ten times more money in Nigeria than they would have made anywhere else in Africa unchallenged for the past 25 years.

Exponential growth in any industry does not come through monopolising the key assets and profiteering from exorbitant access fees.

Rather it comes from opening up access to participants and creating more players in each market layer.

My brother, the problem with the exclusive-rights model is that once DSTV has won the bid if any other player is able to raise money the next month and is willing to invest in the same industry they are completely barred from entry. Everybody is put at the mercy of DSTV. Either you pay what they ask or you go home, even if you have a completely different business model or are targetting a different segment of the market than they are.

Just because you have made the initial investment in the asset does not mean other players must be restricted from access to use that asset. This is parochial thinking.

When regulators break up monopolies the industry and the wider economy is usually better off. Look around you and around the world. It has been proven over the past 30years.

Content is data, and data ought to be shared. That is the type of economy that we need in Nigeria today.

Nigeria Explains The Unification of MultiChoice (DStv, GOtv), NTA, IrokoTV, etc [Video]

These young people will do well. They jointly wrote us for our edition 2, asking for support to attend Tekedia Mini-MBA. There was no way any person could refuse an offer from many students, jointly writing, to have an opportunity to attend your course. We have tracked how they are developing, and they are impressive. Tekedia Institute is proud to support the amazing young people in FutureScope Academy. Last week, the course on AI developed by Microsoft business leader, Wale Olokodana, was opened for a secondary school which asked for access. If your school needs support, let us know. Our programs are delivered by business leaders and they bring practical elements that truly help learners.

Good morning Tekedia,

It has been a wonderful time of learning and innovative mind-blowing exposure to solving identified problems and converting values for means of exchange. Tekedia has been so helpful and worthwhile. With this, FutureScope Academy decided to include two more students, because we want them to have this same learning curve and experience that will help them turn innovative in their quest of being problem solvers in the society.

We are forever indebted to Tekedia for giving our students the  opportunity to enjoy world class learning. Thank you for putting value ahead of money. We believe the favour you granted us to be knowledgeable, informed, “change agents” in the society will come back to lift our great nation up and make Tekedia proud.

FutureScope Academy

Download the full document – Guidelines for Online Hailing Business Operation of Taxi in Lagos State, 2020 (PDF). We received the complete document and are happy to share with the community. From TC Daily, a good summary below:

Come August 20, Guideline for On-Line Hailing Business Operation of Taxi in Lagos will come into effect. It is the Lagos State government’s approach towards regulating the ride-hailing sector in the commercial city and has been the cause of concern since last year when its existence was first hinted at. Both motorcycle and taxi operators have been at regulatory loggerheads with the state government since 2018. In January, the state government announced the ban of motorcycles, including the tech-enabled operators, from major areas in the state to the outrage of users and the operators. There was a peaceful march afterwards to protest the ruling. As was speculated then, the law now mandates operators to acquire a provisional license at N10 million (about US$26,000) per 1,000 vehicles or less; N25 million (US$65,000) for a fleet above 1,000 and renew annually at N5 million and N10 million respectively. The state government is also asking for a 10% service tax on every ride the operators complete (Source: TC Daily)

e-HAILING TAXI OPERATION

4.1       TAXI/OPERATOR’S DOCUMENTATION

1. Service Entity Permit Provisional Licence Application/Renewal

No entity shall operate as a Support Entity in Lagos State without first having obtained a Support Entity Permit from the Licencing Authority.

1. The Service Entity Permit must apply for Operator’s Provisional Licence prior to operation and a payable fee of ?10,000,000.00 (Ten Million Naira only) for 1000 (One Thousand) units of E-hailing
2. The Service Entity Permit must apply for Operator’s Provisional Licence prior to operation and a payable fee of ?25,000,000.00 (Twenty-Five Million Naira only) for 1001 and above (One Thousand and One above) units of e-Hailing

• The Service Entity Permit Provisional Licence is subject to annual renewal with a renewable fee of ?5,000,000.00 (Five Million Naira only) for every 1000 (One Thousand) unit of E-Hailing

1. The Service Entity Permit Provisional Licence is subject to annual renewal with a renewable fee of ?10,000,000.00 (Ten Million Naira only) for every 1001 and above (One Thousand and One above) unit of E-Hailing
2. All Operators of e-Hailing Taxi Services must pay the State Government 10% Service tax on each transaction paid by the passengers to the operators.
3. The Service Entity Permit must commence the renewal process 3 (Three) months before expiration of the existing

• The Service Entity Permit must have a quarterly meeting with the Ministry of Transportation for Operational updates and
• The Service Entity Permit must operator under a particular franchise as no single operator/operation will be

1. On payment of the permit fee, the Licensing Authority shall issue a Support Entity Permit to the
2. All Operators of e-hailing taxi services must give the Ministry access to their database.
3. All Operators of e-hailing taxi services must abide to rules and regulation guiding Lagos State Public Transportation System.

The Lagos’ 10% Service Tax on Uber, Bolt, etc with up to N25 Million License Fee