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Home Blog Page 7116

ARPU: Airtel Africa Records $3, MTN-Nigeria $4

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Airtel Nigeria

I noted many days ago that Airtel Nigeria has successfully re-engineered its business for profitability through a smart leasing /asset financing strategy where it has moved many assets out of its books. And provided it could find solid partners to handle these heavy infrastructure operations, its balance sheet would continue to look promising. Also, it would have more free cash to plow into customer service and experience. Largely, Airtel customers will experience better service.

Many quarters ago, Airtel was seen as a company that would abandon Nigeria. In the depth of the recession, the company struggled: it had so many underperforming assets. As the nation exited recession, Airtel upgraded its business model. Today, Airtel is leaving the infrastructure business, outsourcing all to partners across Nigeria. Typically, such enables companies to conserve cash. The impact is now visible in the subscriber numbers. Provided Airtel continues to find partners, it would continue to grow at a faster rate than its peers.

Many months ago, many were predicting that Airtel would depart Africa [I did not believe that because Airtel’s home country (India) is the most competitive telecom market in the world with Jio through which Mukesh Ambani, the world’s 19th richest person, has unleashed mayhem on telecom operators with pricing anyone in Africa could only pray for]. So, Airtel Africa is the main hope for Airtel as the Indian operation would likely succumb to Reliance Industries, the owner of Jio.

Yes, Airtel Africa will be here. And the business leaders came with a game plan – sell off those masts, equipments etc and lease them back. Today, that strategy is working: Airtel Africa made a full year profit.

The Declining ARPU

Yet, even though Airtel Africa made a full year profit, challenges lie ahead. Just as I have noted on MTN Nigeria which had seen its ARPU (average revenue per user) dropped from $22 (in 2005) to $4.14 in Q1 2018, Airtel Africa is even doing worse: $3 in 2017. Airtel does not break its African operation by countries; so we do not have Airtel specific Nigerian number. (9Mobile and Glo are private companies; you do not expect to know anything about their financials.)

Overall Africa average revenue per user (ARPU), a key performance metric, fell by 1.8% to $3 on-year, while sequentially it fell by 5.6%.

So, MTN Nigeria is operating at ARPU of $4.14 while Airtel Africa is at $3. These companies are using scale to improve revenue [they have more users], but the challenge on profitability remains strong since the revenue is coming by selling and supporting more services and products which increases cost.

All Together

The present model in telecom operation in Nigeria may not be sustainable. I have suggested that moving towards subscription may be an option to make the telecom operators to become ambivalent to what the subscribers use their solutions for. Yes, once they pay the monthly fee, no one would care what they do provided they remain within the service tier they have paid.

How low can this go before we see mergers? Typically, 4 (big) telecom operators are too much in an emerging country!

Zenvus’ AI-Cameras for Farmers [photos]

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Zenvus camer agriculture

We searched for digital cameras in the world but none gave us the capabilities to process crop vegetation index the way we would have liked cost-competitively. I have wanted a camera that is intelligent, smart and engineered for farmers. So, the only option is to make a digital camera from scratch, building at system level with a mammoth microprocessor at the heart. In the processor, we have implemented some amazing algorithms which can help you detect nutrient deficiency, crop diseases, onset of pests, etc in crops even beyond what any human eye can do. And the most exciting aspect: we got the cost 5x lower.

To make this happen, I returned to my root of computational biology where in the Johns Hopkins University, I mastered how to learn from Nature to create biomorphic and neuromorphic systems. Yes, emulating biology to make systems smarter and better. Our algorithms in this camera are advanced.

Our main customer is from Peru which not only funded it but has dropped some change. I hope to make this available in Africa. Imagine the ability to detect crop diseases weeks before they occur. That is what we are working and we are bringing AI into agriculture, at scale.

Zenvus Agriculture – intelligent systems for farms.

Some photos of systems.

 

 

What We Do

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What we do

In the Advisory Unit of Fasmicro Group, we have served local and global clients on their business needs, delivering superior value with absolute commitment to quality. From World Bank to UN, European Union to African Union, leading African banks to startups, we continue to deliver unparalleled insights to help our clients thrive. I lead this Practice; we focus at board and executive management levels.

These are our services, i.e. what we do (for detailed descriptions, click here).

  1. Phone (Skype, WhatsApp) Conversation
  2. Discovery Innovation Presentation
  3. Discovery Innovation Workshop
  4. Development of Business Roadmap & Strategy: Your business plan is not enough to anchor your business execution. Most times you need a Roadmap Document especially if your business is in a state of flux [changing market, changing model, startup, etc]. To avoid pursuing many windy paths or dead ends, it is always good to have a roadmap. That roadmap encapsulates the path to the vision with pillars and enablers which team members can understand. Read more here.
  5. Open Innovation Event
  6. Advisory Services

We deliver exponential impacts.

Email: tekedia@fasmicro.com

Three Vertices to Success in a Career

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vertices of success

On a piece on how people can build decent companies even when living abroad or investing by the side, in Nigeria, a reader left a fascinating insight on the vertices of success in a career.

One thing I have noticed is that most employers are not willing to train anybody. I understand it involves huge financial implications that may be difficult for a start-up but that is the reality of the Nigeria we have. Others who are willing to train ask for bonds that have difficult working conditions attached. …. I remember one of the things I was told in Barclays during my short period there is that there are three vertices to success in a career, skills, attitude and knowledge. Hire for attitude and a bit of the knowledge, train for skills and pay a decent wage while at it; your staff on average will be loyal to your business because most appreciate that skills’ training that is quite rare to come by.

Here, the reader noted the following as vertices to success:

  • Skills
  • Attitude
  • Knowledge

In that piece, I had noted that one “can build a thriving business in Nigeria even when not physically present in that office. You can live in diaspora and execute a mission back home. And you can be working in a bank and found an IT firm. The key is making sure that people come to work for themselves and their families and not just you. Yes, share the fun and people will connect to execute the mission”. When you examine these three vertices, one thing becomes clear: accumulation of capabilities.

Skills, attitude and knowledge are capabilities which are very critical in career advancements. The capabilities of workers become the summation of the capabilities of firms. Firms need those capabilities to thrive in markets. Only great workers make them happen, and when companies see people with them, they nurture and retain them. That is how success comes in careers.

The Timber from the King’s Forest

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Timber from the King’s Forest
Timber from the King’s Forest

His ancestors had dedicated a Temple around 10th century BC to Yahweh. But Nebuchadnezzar II destroyed it around 587 BC during the siege of Jerusalem, by Babylon. It had taken many years to build that Temple.

He grew up, and rose to become one of the most important men in Persia (in modern Iran): a cupbearer to Artaxerxes, king of Persia, and later, the king made him a governor of Persian Judea. To rebuild Jerusalem wall, the king gave his permission to use timber from the king’s forest. In the imperial Persia, which had conquered Babylon, commanding the territories with military and economic powers, the king’s timber went with the king’s builders and security.  The wall was rebuilt within 52 days despite oppositions from Samaritans, Arabs and Philistines.

Yes, Nehemiah rebuilt the city wall circa 408 BC. That city housed the temple – the very one that stood in Jerusalem during the time of Christ. Later, Roman Generals Titus and Vespasian destroyed it during the siege of AD 67-70.

I am yet to read of any man that understands foreign policy, diplomacy and large project management better than Nehemiah. When Artaxerxes made him governor, he gave him support. Nehemiah worked for  that support. The king provided him with resources. And even though enemies came, during the rebuilding, he was able to execute the mission at a very short time.

Persia was the superpower; Nehemiah had the support of the best military and the strongest economy behind him. He succeeded. Yes, Persia partly funded the rebuilding of the city wall which Babylon (modern Iraq) had destroyed. Power was shifting rapidly: from Babylon to Persia, and Rome. It continues to modern America, from Great Britain!

Nehemiah was brilliant – he understood the challenges in the region with all the battles. He could not have accomplished anything without the authority and support of the king. He mastered the art of diplomacy – the Nehemiah Diplomacy.

Solomon's_Temple_Jerusalem
Solomon’s Jerusalem Temple (source: Wikipedia)

The Nehemiah Diplomacy is a type of diplomacy where a quasi not-free man can ask his master to allow him to go back to rebuild his city, requesting that the master partly funds the project, and provides security. He did not just want timber; he wanted the one from the king’s forest meaning that the king was on absolute support. In imperial Persia, wasting timber from king’s forest was a punishable offence.

So, any project that received timber supplies from the king’s forest was as good as executed. And only the most important projects qualified. As the aides shipped the timber, the guards would follow, making sure that none was wasted. Another set of guards would monitor compliance. Simply, Nehemiah would have failed without the resources and the security offered by the king which helped as he battled the enemies.

If he had used any timber that was different from timber from the king’s forest, he would have failed. Understanding the situation in the region, and asking for the king’s timber was the reason he executed within 52 days. You must have the capabilities to decipher the most important component to have a successful project. And you must make sure you have that component.

Nehemiah teaches us something on project management. One has to plan ahead especially in places like Nigeria. It is very common for companies to win contracts and then abandon them within weeks due to problems from Boko Haram and Niger Delta militants. Nehemiah thought through all phases: resources, security, etc. Within the 52 days it took him to rebuild the wall that took many years to build, he fought minor battles. Getting the support of key business leaders on critical projects are important and planning ahead remains vital. And in all, knowing the critical success factors like a timber from a king’s forest could be catalytic in delivering projects on time.