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On Impressive Half Year Report, MTN Notes Momentum On Ayoba, Its WhatsApp Challenger

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MTN Group is winning markets and territories; H1 2019 was a good one for the company. Here are all the great things happening in this African evolving technology conglomerate:

  • Impressive financial results: “We saw growth of 12% in adjusted headline earnings per share, which is the first time that we have delivered growth in this measure in recent years. Our service revenue grew just below 10% and EBITDA just above 10%, both on a constant currency basis. Our holding company leverage remains stable at 2.3x, well within our guidance range of 2 to 2.5x.”
  • Solid User Growth: “strong subscriber growth of 7,7 million in the first six months of the year to reach a total of 240 million subscribers.  The number of active data users grew by 3,5 million to 82 million and our 30-day active Mobile Money users grew by 2,4 million to 30 million”.
  • Listing in Nigeria and Jumia IPO: “We successfully completed the listing of MTN Nigeria on the Nigerian Stock Exchange and our e-commerce joint venture Jumia listed on the New York Stock Exchange.”
  • Ayoba is growing: ” instant messaging platform, Ayoba, is now live in three of our West African markets and has more than 300 000 active monthly users.”
  • “Super-agent licence in Nigeria”.

MTN needs to offer a 20% discount on airtime to encourage people to forget WhatsApp and use Ayoba! Provided you do not have WhatsApp on your device, you will get 20% bonus anytime you reload. If not, we may be concerned for another 2go. 

WhatsApp has a near-zero marginal cost which means it can be offered free to users. Competing against free is hard. We will see MTN’s game plan: zero-metering (i.e. you can use it even when you have no data) Ayoba is another game plan it can unleash to get over WhatsApp. Yet, WhatsApp continues to find how to grow. It is now in KaiOS feature phones.

KaiOS Technologies  maker of KaiOS, the leading mobile operating system for smart feature phones, and Facebook, the social media platform whose goal is to bring the world closer together, have announced WhatsApp’s availability for download in the KaiStore, on both 512MB and 256MB RAM devices. Further, by Q3 2019, most smart feature phones powered by KaiOS will have WhatsApp preinstalled upon shipment.

“KaiOS has been a critical partner in helping us bring private messaging to smart feature phones around the world. Providing WhatsApp on KaiOS helps bridge the digital gap to connect friends and family in a simple, reliable and secure way,” said Matt Idema, COO of WhatsApp.

The full press release below…

MTN Group has announced an encouraging set of results for the six months ended 30 June 2019 in the context of difficult trading conditions across its major markets.

Commenting on the results, Rob Shuter, MTN Group President and CEO, said: “We had a good first half, reporting solid financial results, good commercial momentum and encouraging strategic progress. We saw growth of 12% in adjusted headline earnings per share, which is the first time that we have delivered growth in this measure in recent years. Our service revenue grew just below 10% and EBITDA just above 10%, both on a constant currency basis. Our holding company leverage remains stable at 2.3x, well within our guidance range of 2 to 2.5x. And, as we grew revenue and carefully managed our investment programme, we saw capex intensity drop further, to 16,9%.

Commercially, we had strong subscriber growth of 7,7 million in the first six months of the year to reach a total of 240 million subscribers.  The number of active data users grew by 3,5 million to 82 million and our 30-day active Mobile Money users grew by 2,4 million to 30 million. Our continued focus on the customer experience has seen us record brand NPSˆ leadership across more than 50% of the portfolio, with 12 markets now leading. That contributed to MTN being named the most valuable South African brand in the Brand Finance South Africa 50 report and the most admired African brand by Brand Africa 100.

During the period we had some landmark events. We successfully completed the listing of MTN Nigeria on the Nigerian Stock Exchange and our e-commerce joint venture Jumia listed on the New York Stock Exchange. Within three months of announcing our asset realisation programme, which is targeting at least R15 billion over the next few years, we delivered R2,1 billion in proceeds.

Our advanced instant messaging platform, Ayoba, is now live in three of our West African markets and has more than 300 000 active monthly users. We are very pleased with the formal approval of our super-agent licence in Nigeria, which clears the way for the launch of phase 1 of our Nigeria fintech business while we await a banking licence.”

Operating environment

In South Africa, the group contended with a weak macroeconomic environment as well as the introduction of new end-user requirements and the repricing of out-of-bundle data rates. In Nigeria, economic activity was muted in the time of presidential elections and prior to the formation of the cabinet. In Iran, the rial weakened sharply after the re-imposition of US sanctions.

Financial performance

Notwithstanding this environment, in constant currency terms, service revenue grew by 9,7% to R67,9 billion and earnings before interest, taxation, depreciation and amortisation (EBITDA) expanded by 10,2% to R31,2 billion. The holding company net debt to EBITDA ratio remained stable at 2.3x, which is well within the group’s guidance range of 2.0 to 2.5x, and capex intensity dropped further to 16.9%, indicating greater efficiency in deploying assets.

Looking ahead, Shuter says: “MTN is well positioned to grow by leveraging our scale and enhancing our competitive position.

In the second half, in South Africa we will focus on the continued turnaround of the enterprise business, the recovery of prepaid and the launch of Mobile Money. In Nigeria, we will focus on the further rollout of 4G coverage, the launch of Ayoba and Music Time! as well as accelerating our fintech ambitions by fully leveraging our extensive distribution network to offer a range of transfer and payment services to our GSM customer base.

Across the rest of the portfolio we have six focus areas. These are: the continued turnaround of our operations in the West and Central Africa region; the resolution of some of the more complicated regulatory situations; the rollout of MusicTime! and Ayoba across the group; the asset realisation programme; launch of our pan-African MTN 4 Good campaign and delivering on our medium-term targets.”

Making Aba Shoe Industry Globally Competitive

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According to Business Day, a newspaper, the Aba leather industry has about 80,000 players operating in different clusters across the town. These players engage in the production of shoes, bags and trunk boxes, producing 48 million pairs of shoes annually at an average price of 2500 naira which gives it a market value of $333 million (120 billion naira). Its global competitors include China which produces 12.6 billion pairs of leather shoes and exports shoes and leather products worth $9.1 billion, and Vietnam which produces 760 million pairs annually with an export value of $6 billion. Indonesia, in third place, produces 660 million pairs with $2.6 billion in shoes exports while Italy produces 205 million shoes with export value of billions of dollars too.

There are different factors responsible for why the Aba shoe industry is not globally competitive. They include:

  • Unavailability of export data on footwear
  • Players in the leather industry not utilizing the internet in marketing and distribution of products
  • High lending rate by Nigerian banks which has made manufacturing not globally competitive
  • Unavailability of the manufacturers to get animal skins locally 
  • Utilization of crude machines in production.

In May 2008, The Common Facility Centre was established in Aba as a partnership between the United Nations Industrial Development Organization(UNIDO), and  the Federal Government of Nigeria, to aid workers in the Leather and Garment sector to exploit external economies through collective effort and sharing common facilities for enhanced processing of their products, and to serve as a Centre of Excellence for capacity building and provision of cutting edge technology for competitiveness enhancement.  About eleven years after it was established, the majority of the Aba shoemakers have refused to utilize the facility as they don’t understand the purpose behind its set up.

The following solutions can solve this friction:

Upgrade of Facilities and Provision of Manpower for the Common Facility Centre: Considering the fact that the centre hasn’t been utilized in a long time, its facilities need to be upgraded in line with modern requirements. Also, efficient manpower that will run it should be recruited.

– Training Aba Manufacturers with Latest Skills and Technologies: Aba shoes and other leather product manufacturers should be trained in skills such as Industrial and Product Design, Additive Manufacturing and usage of modern machines which automate shoe production to enable them produce more faster at the Common Facility Centre.

– Encourage Aba Manufacturers to Utilize its Facility for Manufacturing their Products: Aba manufacturers should use the Common Facility Centre to produce their products at scale for them to be globally competitive.

– Provision of Credit to Aba Manufacturers at Single Digit: The lending rate of 22 percent to 30 percent by banks in Nigeria is an impediment to the competitiveness of the Aba leather industry when its counterparts in China and other countries access funds at less than 10 percent.

– Utilizing E-Commerce Platforms for Marketing and Distribution: The Aba Shoe and other leather industry players need to utilize e-commerce platforms like Jumia and Konga for marketing and sales of their shoes since they are the biggest channels in Nigeria and Africa. Also, Amazon.com should be used for distribution to global consumers.

– Creating of a Blockchain Platform to track the leather product value chain: Blockchain is a secure  ledger shared by all parties in a decentralized network  which records and stores every transaction that occurs in the network.  A Blockchain platform which will track the production, sales and distribution, of all the players in the Aba leather industry will provide data which is tamper-proof and will validate the economic status of the industry.

If we implement these suggestions, we will get Africa’s largest cluster of shoe making working at maximum level besides being globally competitive.

Five Reasons Why Digital Marketing Is Great for Small Businesses

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I hate betting. However, if you put a gun to my head and ask me to place a bet on something or you pull the trigger, I would place a bet on digital marketing. This is because, in the marketing arena, I have observed digital marketing delivering outstanding results that are unthinkable in traditional marketing. 

Nevertheless, lots of small business owners still prefer traditional marketing because it is what they are used to – or because they haven’t heard of digital marketing. My aim for writing this post is to share some of the good news of digital marketing and to prove why I believe it is the best bet. 

Marketing budget

For many medium- and large-size companies, the marketing budget is fat. They don’t mind paying one million Naira for a full-page newspaper ad. Small businesses, however, don’t have that luxury – and this is one of the vital reasons to go digital. 

On social media, most especially on Facebook and Instagram, you can run an ad for as low as ?1000. Digital platforms such as Google My Business and local business directories are free to use and can get you lots of customers. 

Audience targeting 

In traditional marketing and advertising, marketing messages are delivered to everybody, whether the person is interested or not interested in the product and service. Advertisers are helpless and can only pray the target audience comes across the advertisement. 

But in the case of digital marketing, as an advertiser, you can target the people that are likely to buy from you. Google and social media ads are delivered by algorithms that allow advertisers to target people based on their demographics, interests, and behaviours on the internet. 

No wasting of money on marketing to people not interested in your offers. 

Return on investment

If a small business is to survive, every kobo spent on marketing must deliver at least double the money spent. By going digital, the chance of getting a return on investment (ROI) is high, as campaigns are cheaper and the conversion rate is higher. 

Components of digital marketing

Campaigns are measurable

How possible is it to know the number of people that read your fliers? What about the number of people that listen to your ad broadcast on radio? It’s impossible.

However, in the case of digital marketing, it is possible for you to know the number of people that come across your marketing messages. In fact, it is possible to know the number of people that consume your marketing messages to the end and those that stop along the way. 

There are lots of digital marketing tools that give insights into your audience. To mention a few, Google Analytics shows you how people interact with your website; social media management software shows you how people interact with your posts; and email marketing platform lets you know if recipients open your email. 

I doubt if you can know if a recipient reads your letter of introduction delivered by NIPOST, Nigeria’s postal service.

Campaigns are adjustable

This point is related to the last. Through digital marketing, you can measure the results of your marketing campaign on-the-go – and make an adjustment or stop the campaign it isn’t working. In the same vein, If a campaign is succeeding, you can double down on it. 

This is possible because almost all digital marketing platforms allow you to edit and adjusting on-going campaigns. 

As for traditional marketing, on the other hand, campaigns are almost cast in stone. You can do little or nothing to adjust an ongoing campaign. Even a small typographic error in a print publication can’t be corrected: the publication has to be reprinted. 

With the points above, you would agree with me that digital marketing is indeed the best bet if you own small business. Note that the above points don’t mean that you should totally ignore traditional marketing. Your overall marketing strategies should be a mix of both digital and traditional. But digital marketing should be at the centre of your marketing strategies, because of its effectiveness. 

Huawei Unveils HarmonyOS to Replace Android

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Richard Yu, head of Huawei's consumer business, unveils the company's new HarmonyOS operating system during a press conference in Dongguan, Guangdong province on August 9, 2019. - Chinese telecom giant Huawei unveiled its own operating system on August 9, as it faces the threat of losing access to Android systems amid escalating US-China trade tensions. (Photo by FRED DUFOUR / AFP) (Photo credit should read FRED DUFOUR/AFP/Getty Images)

When Huawei got into U.S. bad books, I wrote that U.S. could be hurting Android, Google mobile operating system, which most phone makers in the developing world rely upon to build their cheap phones.

When it comes to emerging markets, cost matters. So far, Chinese phone makers dominate therein. That they use your software and pay the necessary fees should not be taken for granted. If Trump puts heat and they create an alternative one, by ripping Android apart, future phones in Africa will not be powered by Android. Sure, Samsung will continue to have offices in Africa but it has lost market share because of price. Simply, Samsung will not save Android.

Of course, nothing significant changed as Huawei remains banned. Today, Huawei has a mobile OS – HarmonyOS – and now ready to take on Android.  This competitive challenge will happen in phases. Yes, the speculation is over: Android has a real competitor in the developing world. Simply, if other Chinese phone makers like Tecno, Oppo and Mi band together into HarmonyOS, Android may be an endangered species in Africa. I expect them to make that call!

After months of conflicting statements from Huawei executives, the Chinese networking giant on Friday officially unveiled HarmonyOS, the much-anticipated microkernel-based distributed operating system that it has developed to power smartphones, laptops and smart home devices as the company attempts to reduce its reliance on American firms.

[…]

“A modularized HarmonyOS can be nested to adapt flexibly to any device to create a seamless cross-device experience. Developed via the distributed capability kit, it builds the foundation of a shared developer ecosystem,” the company said in a statement, adding that it began to explore developing its own operating system “as early as 10 years ago.”

The company said it intends to continue to use Android moving forward, but HarmonyOS is officially its back-up plan if things go south. “We will prioritize Android for smartphones, but if we can’t use Android, we will be able to install HarmonyOS quickly,” Yu said.

Samsung alone with its fashionista pricing cannot save Android; Chinese brands dominate smartphone business in Africa and can move customers because of cost. How did I know? Check how many people in your neighbourhood who are using iPhone even though we do agree that it has great quality. Largely, quality without consideration of device price will not save Android!

Why Google is Asking Trump to allow Huawei To Keep Using Android

The Mission of Moyosola Iwashokun, Industrial Chemistry Graduate Turned Shoemaker

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They say life will not give you everything you want but everything you want in life has been given.

Unemployment is no longer a new topic. In fact, it is a global topic. It’s the song on everyone’s lips. 

These days, finding a job is down to connection or fortune. It’s no longer like it was back then in the 90s when graduates get jobs immediately after graduation. 

Every year, institutions produced thousands of graduates with no employment opportunities to absorb them. This has led to a major problem in Africa and the world at large. 

How do we tackle unemployment in Africa?

The only effective way unemployment can be tackled is through entrepreneurship. Everyone must embark on entrepreneurship. Graduates should have the mindset of creating jobs and not looking for jobs. That is the only way we can reduce the rate of unemployment drastically.

Moyosola Iwashokun, an ‘Industrial Chemistry’ graduate shared her own taste of unemployment and what led her into full-time entrepreneurship in a very short interview with me.

 Can we get to know?

”My name is Moyosola Iwashokun. I am a graduate of the University of Ilorin where I studied Industrial Chemistry (2012-2016).

 Where are you from?

”I grew up in the slums of Lagos, Nigeria, so I can basically say, I’m from Lagos.”

 How did you develop an interest in shoemaking?

”As a lady with the hijab, I have a love for nice fitting footwear. I would always look at my feet to see if they are well fitted in my shoes. Then I discovered that I actually have an interest in anything that has got to do with shoes.

Can you share a bit more about your shoemaking business?

”The shoemaking story began when I was in University. Although it wasn’t quite easy because I went to a school (University of Ilorin) which was quite fast in running her academic calendar, so balancing my studies and shoe learning training wasn’t rosy but it was definitely worth the stress.”

 Did you ever job hunt after graduation?

”Of course, I did. In 2018, when I had finished serving my country, I tried so hard to secure a job so I could practice my discipline ’Industrial Chemistry’. I wasn’t successful in my job hunt but I was able to think differently. I thought of combining my discipline with shoemaking business since I saw synergy between the two. Although I never got the job I wanted but I was able to land a teaching job.”

 How were you able to cope with your business and the teaching job?

”I was drenched, I had to pull out to face my craft, that is, shoemaking business.” 

What can you say about the business?

”Shoemaking is enthralling to me and making every feet count is my goal.” 

How can we find you whenever we need your shoe?

”My company name is Gbayi_Signaturez.

My phone contact: 08165334993

My IG handle: @gbayi_signaturez”

 Feel free to connect with Moyosola.