Connect with us


Broadband Penetration Garners Momentum – Coronation Merchant Bank



Telecommunications - Investors King

The latest data released by the Nigerian Communications Commission (NCC), the industry regulator, show that internet subscriptions stood at 152.7 million in October ’22, representing a marginal decline of -0.05% m/m.

Meanwhile, on a y/y basis, internet subscriptions increased by 8.9%. Based on anecdotal evidence, internet subscription activity has been impacted by weaker spending capacity among consumers, following the upticks in the headline inflation.

MTN accounted for the largest share (42.2%) of internet subscriptions in October ’22. Meanwhile, Globacom, Airtel, and 9Mobile accounted for 27.9%, 26.3%, and 3.4% of total subscriptions respectively. Among the mobile network operators, MTNN, Globacom, and 9Mobile recorded m/m increases in internet subscriptions at 0.7%, 0.3%, and 6.1% respectively.

However, Airtel recorded a decline of -2.4% in total subscriptions.

Based on MTNN’s Q3 ’22 results, service revenue increased by 20.6% y/y. This was due to significant growth in data revenue (49.1% y/y). The increase in data can be largely attributed to a y/y increase in active data subscriptions (+3.7 million). These increases were supported by sustained 4G expansion as well as the conversion of existing subscribers on the 3G network to 4G in a bid to continue driving smartphone penetration.

Furthermore, 5G spectrum licenses increased to three (from two) in December ’22 as Airtel NG emerged the sole bidder in the NCC’s planned auction this year. We recall that the NCC had awarded 5G spectrum licenses to MTN and Mafab Communications in 2021.

We expect to see a positive ripple effect across sectors such as education, agriculture, finance, transportation, commerce, and healthcare. MTNN currently has 5G coverage in seven key cities in Nigeria (the FCT, Lagos, Port Harcourt, Owerri, Ibadan, Kano, and Maiduguri).

According to the NCC, in October ‘22, broadband penetration increased to 45.6%, vs 39.9% recorded in the corresponding period of 2021. We note that the FGN has a target of 90% broadband penetration by 2025. Several existing challenges continue to impact broadband penetration in Nigeria. They include, epileptic power supply, poor or limited ICT infrastructure, data costs and high fees associated with right of way (RoW).

In 2020, the Nigerian governors’ forum resolved that telecom operators should pay a RoW (rights of way) fee of N145 per linear meter of fibre. However, based on local newswires, only Kaduna, Ekiti, Katsina, Plateau, Ekiti, Kwara, Imo and Anambra are implementing the new fee.

The FCT minister recently disclosed a charge of N14.50 per linear meter RoW charges (a 90% reduction from the regular fee) would be considered for telecommunication companies that plan to deploy broadband in green areas across the FCT. This would boost broadband penetration in rural areas as well as significantly reduce operating costs.

It is worth highlighting that many states continue to charge relatively high RoW fees. Industry sources suggest that in states like Benue and Ogun, it costs operators N2,500 and N4,000 per linear meter of fibre respectively in RoW charges. However, in Lagos, the fee ranges between N750-N1500 per linear meter of fibre. The absence of a unified RoW fee across the country continuously stalls the advancement of broadband fibre networks.

The latest national accounts show that the telecommunications segment grew by 10.1% y/y in Q3 ’22 vs 7.7% recorded in Q2 ’22. Furthermore, inflation in the communication segment declined slightly to 11.5% y/y in November ‘22 from 11.8% y/y in November ‘21. However, operating expenses remain considerably high as telecommunication companies continue to struggle with high energy costs, fx illiquidity, vandalism and supply chain disruptions, among others.


Continue Reading


Alibaba Faces Rare Downgrade as PDD Surpasses It in Market Value




Alibaba Group Holding Ltd. received an unusual downgrade from Wall Street on the same day it ceded its position as China’s most valuable e-commerce company to one of its primary competitors.

Morgan Stanley downgraded Alibaba’s American depositary receipts (ADRs) from overweight to equal-weight, concurrently lowering the price target from $110 to $90.

This marks the first downgrade for Alibaba’s US-listed shares since late June, according to Bloomberg data.

Analysts at Morgan Stanley, including Eddy Wang and Gary Yu, expressed concerns about Alibaba’s slower-than-expected turnaround and the uncertainty introduced by the decision to withdraw the spinoff of its cloud business.

In a report dated Thursday, they stated, “brings uncertainty to the value-unlocking from reorganization.”

Simultaneously, Morgan Stanley named PDD Holdings Inc. as its top pick in China’s e-commerce sector, citing its favorable positioning amid the growing trend of consumer price sensitivity.

PDD, an eight-year-old upstart recognized for its successful Temu marketplace, closed Thursday trading in the US with a market capitalization of approximately $196 billion, surpassing Alibaba’s value for the first time.

PDD has experienced a remarkable 80% surge in value this year, while Alibaba has faced a 15% decline in US trading.

Although Alibaba has been a dominant force in China’s online shopping landscape for over a decade, PDD has managed to attract customers with competitive pricing and expand its reach globally.

Morgan Stanley’s move to downgrade Alibaba and elevate PDD underscores the shifting dynamics within China’s e-commerce sector.

Despite this downgrade, brokers remain predominantly bullish on Alibaba, with 44 buy ratings and eight hold recommendations for its ADRs. In comparison, PDD has 52 buy ratings and three holds.

Continue Reading


Bolt Expels Over 5,000 Drivers in Kenya to Enhance Safety Measures



Estonian ride-hailing giant Bolt has taken decisive action in Kenya by removing more than 5,000 drivers from its platform over the past six months.

This move comes as part of Bolt’s commitment to bolstering safety and ensuring compliance among its driver partners.

The company, operating in over 15 towns and cities in Kenya, has earmarked KES 20 million ($130,000) for investments in safety-related practices.

The decision to expel drivers follows recent safety concerns raised by the National Transport and Safety Authority (NTSA).

Bolt faced scrutiny and was asked to outline its strategy for addressing safety issues, including instances of physical assault on passengers and unauthorized sale of driver accounts.

The NTSA’s directive was a prerequisite for Bolt’s annual license renewal.

Linda Ndungu, Bolt Kenya’s Country Manager, emphasized the company’s commitment to user trust and safety.

Ndungu stated, “We understand the trust our users place in us, and we are taking proactive steps to ensure their well-being during every ride.”

To enhance safety measures, Bolt is implementing internal measures such as random driver selfie checks, providing training for both riders and drivers, and enforcing strict compliance with swift consequences for violations.

Bolt has also introduced improved reporting tools to facilitate the reporting of safety concerns.

Bolt’s move is a response to recent driver dissatisfaction, attributed in part to commission rates exceeding the government’s recommended 18%, including booking fees.

The company aims to address these challenges and reinforce its commitment to safety and compliance within its platform.

Continue Reading


Fintech Company, Grey, Unveils New Look to Support its Global Expansion Strategy



Grey Finance

Grey, a leading cross-border fintech company, has embarked on a significant global brand rebranding initiative, revealing a fresh logo and website design.

This strategic move aligns with the company’s dynamic plans to expand its footprint in the global market.

The company’s transformation was unveiled on its social media platforms on Monday, November 27, 2023. Grey aims to leverage this fresh identity to reach a broader audience and solidify its international presence. The updated brand assets visually represent Grey’s commitment to innovation, excellence, and global connectivity.

The rebranding initiative follows closely on the heels of Grey celebrating a milestone achievement of surpassing 500,000 users. The company’s rapid growth and expanding user base have spurred this bold step towards rebranding, symbolizing success and underlining its dedication to remaining at the forefront of global fintech innovation. Furthermore, the previous logo was not usable in some foreign markets due to trademark conflicts with another company.

Idee ObongThe CEO and founder of Grey, shared insights into the rationale behind the rebranding, stating, “As we chart our course toward serving a global audience, we recognized the need for trademarks and related processes. We identified similarities with existing marks during this evaluation, prompting a deliberate rebrand. The new logo and website signify our forward trajectory, emphasizing global connectivity and our commitment to creating a more interconnected world. Our focus remains on being people-centric and cultivating a lasting community.”

Grey’s brand evolution is occurring at a crucial juncture for the fintech industry, which is positioned for significant opportunities despite recent economic uncertainties. The fintech sector has faced challenges in the past year; notwithstanding, Grey has rapidly scaled, adeptly responding to the heightened demand for its services.

The company has also established key partnerships across both B2B and B2C sectors across Africa over the past months, solidifying its reputation as a trusted and reliable cross-border payments company.

Femi AghedoCo-founder of Grey, emphasized the strategic timing of the brand evolution, stating, “The timing simply felt right to evolve our brand. Our growth and evolution as a business needed to be reflected tangibly. We are dedicated to ongoing innovation, adapting our services to meet the dynamic needs of our customers. Our core mission is to provide seamless and secure cross-border payment solutions, empowering businesses and individuals in the global economy. We eagerly anticipate the future of fintech and the opportunities it presents for us to impact the industry positively.”

Furthermore, customers can expect a more innovative and interconnected user experience when engaging on their platforms. As Grey ventures into this exciting new chapter, the team remains committed to providing cutting-edge and secure cross-border payment solutions, fostering global connectivity, and contributing to the evolving landscape of the fintech industry.

Continue Reading