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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.


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Microsoft Integrates OpenAI’s GPT-4 Language Model Into Bing



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American multinational tech company Microsoft has integrated OpenAI’s GPT-4 model into its online search engine Bing to enhance users’ experience.

At a press event held yesterday in Redmond, Washington, Microsoft announced the introduction of the AI feature to provide users with a Chat-GPT-like experience.

With this update introduced to Bing, the tech giant search engine will now allow users to Chat with it to get more detailed answers to search queries.

Present at the event was OpenAI CEO and ChatGPT maker Sam Altman who confirmed that Microsoft is making use of its GPT technology to power some of its new Software, which is quite similar to OpenAI’s ChatGPT.

Microsoft which also launched a new version of its Edge browser with some AI features built into it, revealed that it will roll out for desktops in a limited review, which implies that users will only get a limited number of queries to search during the initial period.

The tech giant further revealed that a waitlist will be made available for the full version, which will subsequently be rolled out to millions of people in the coming weeks. The company also disclosed plans to launch a mobile version of Bing.

The new Bing now features the option to start a chat in its toolbar, which then brings users to a ChatGPT-like conversational experience.

It is interesting to note that while OpenAI’s ChatGPT bot was trained on data that only covers 2021, Bing’s version is far more up-to-date and can handle queries related to far more recent events (think today, not 2021).

Reports reveal that Microsoft hopes for a more conversational search experience in which a bot provides contextual replies based on search queries.

Microsoft stressed that it is using a new version of GPT that is able to provide more relevant answers, and provide up-to-date results, while providing a safer user experience.

Investors King understands that with the introduction of AI feature into Bing, Microsoft seeks to dominate the web search.

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Flutterwave Receives PSP, Payments Facilitator Licenses in Egypt




Nigeria’s leading fintech giant, Flutterwave has received two licenses in Egypt as it moves to deepen payments in Africa and connect the continent to the rest of the world.

The company, in a short note from its Chief Executive Officer (CEO) and Co-founder, Olugbenga GB Agboola, announced that Egypt Government had approved the Payment Services Provider license and Payments Facilitator license for its operations in the North African nation.

He said “I’m so proud to announce that we (Flutterwave) have accomplished a major milestone in our journey as we obtained our Payment Services Provider and Payments Facilitator licenses in Egypt 🇪🇬.

“Our vision is to connect all major parts of Africa through payments and further connect Africa to the world and this new license is yet another step in that direction.

“Truly, this is big news for our customers, partners, investors, and other stakeholders.

“I am excited to see how this new license helps us provide first-class payment services and seamlessly connect businesses to their customers in Egypt 🇪🇬.”

Founded in 2016 with the aim of making it easier for people in Africa to pay and get paid, both locally and globally. Flutterwave’s main products is its payment gateway, which enables businesses to accept payments from customers through a variety of channels, including debit and credit cards, bank transfers, Paypal and mobile money. The payment gateway is secure and reliable, with 24/7 support and dispute resolution services.

Another important product offered by Flutterwave is its Rave platform, which enables businesses to send and receive payments, as well as manage their finances, in a single place. Rave integrates with popular e-commerce platforms and offers a range of features, including invoicing, recurring payments, and currency conversion.

Flutterwave also provides individuals with financial services through its Barter platform. Barter allows users to make payments, transfer money, and pay bills from their mobile devices. The platform is easy to use and supports multiple currencies, making it ideal for people who travel frequently or who need to send money to friends and family abroad.

In addition to its core products, Flutterwave has a range of partnerships and integrations with companies and organizations that provide complementary services, such as e-commerce platforms, payment processors, and financial institutions. This helps to create a seamless experience for users, as well as providing businesses with a range of options to choose from when setting up their payment systems.

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All You Need to Know About Google’s AI Chatbot “Bard”



A logo is pictured at Google's European Engineering Center in Zurich

Bard is Google’s soon-to-be-launched AI search assistant that will work in the background of search queries to provide in-depth information on users’ results.

Bard was rolled out by the tech giant earlier this month, in response to OpenAI Chatbot ChatGPT which is currently the rave of the moment, that has amassed over 1 million users daily.

Bard is reported to be Google’s first shot at ChatGPT as it seeks to compete with the chatbot, as well as possibly displace it.

What Powers Bard?

Bard is powered by a language model to enable it to converse with humans efficiently. The Chatbot uses a language model for dialogue applications (LaMDA) as its model.

LaMDA is a type of Large Language Model (LLM), which are software algorithms trained on huge amounts of data, usually measured in terabytes.

Although they are most well known as the software that powers chatbots, LLMs can also be used to do things such as scanning scientific databases to learn about the structure of medicines.

How Does Bard Work?

Google CEO Sundar Pichai in a blog post, disclosed that Bard draws information from the web to provide fresh and high-quality responses. Like ChatGPT, Google’s Bard will initially only answer text prompts with its written replies.

He further disclosed that the AI chatbot can be an outlet for creativity and a launchpad for curiosity, which will help users to explain different discoveries or get in-depth knowledge about certain information.

The company further added that Bard will also let users do things like “plan a friend’s baby shower”, “compare two Oscar-nominated movies, or “get lunch ideas based on what’s in your fridge”.

When Will Bard be Released?

Google has revealed that Bard will be rolled out in the coming weeks, which will come on a lightweight model version of LaMDA, noting that this will enable it to scale the chatbot to more people as the much smaller model requires significantly less computing power.

Google will open up the conversation technology to trusted testers ahead of making it more widely available to the public.

The tech giant further disclosed that the initial launch of Bard will be in a testing phase, as it seeks to combine its external feedback with its internal testing, noting that this was necessary as chatbots have shown a propensity for negative traits that include everything from bias to powering cyberattacks.

Google has assured users that soon they will see AI-powered features in search that will distill complex information and multiple perspectives in easy-to-digest formats, to enable them to learn more from the web, Investors King understands.

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