MTN Heads For The Cloud

MTN Business , a division of South Africa-based MTN Group , has launched a pilot project for its cloud computing service in six countries in Africa, according to a statement on December 6 2012. The prospect for corporate IT solutions in Africa has improved significantly over the past three years owing to a combination of industry - specific and macroeconomic factors. This development creates valuable service diversification opportunities for leading telecoms operators in the region looking to offset the impact of slow revenue growth from traditional services .

Positive Outlook
Real GDP Growth, Y-o-Y, Of Selected African Countries

MTN is launching the Cloud Service Brokerage (CBS) model in six key markets - Cameroon, Côte d'Ivoire, Ghana, Nigeria, Uganda and South Africa. This model centralises access to various services in the cloud ecosystem with a broker acting as a single point of contact for customers by aggregating, integrating and implementing cloud services from multiple providers. MTN's CBS service is believed to be the first in Africa, giving it a first mover advantage into a potentially lucrative market. We expect the operator to leverage off its existing network infrastructure, including direct access to its WACS submarine system, to offer this service. Meanwhile, as an integrator, MTN will be less concerned about competing directly with individual cloud providers springing up across the region.

The MTN cloud computing service will target small and medium-sized enterprises (SMEs) in the region. We have a positive outlook for this strategy considering the rapid evolution of SMEs in the region in terms of growing business activities and the adoption of ICT solutions to improve cost and production efficiencies. Furthermore, SMEs are less likely to afford huge investments in IT infrastructure compared to large corporations, making them more open to low-cost alternatives such as cloud computing. MTN has selected a number of SMEs in the six countries for the pilot, which will run until the end of January 2013. Participating firms will gain access to centralised services on the platform, including Microsoft Office Desktop, Mozypro, Dialcom, McAfee, Averiware, Microsoft Sharepoint and Microsoft Dynamics CRM.

Cloud computing is one of two main emerging corporate solutions provided by telecoms network operators in Africa. The other is machine-to-machine (M2M) services. MTN Business has expanded into both areas, although it faces stiff competition from rival Vodacom Business, the corporate solutions unit of Vodacom Group, in the M2M market. BMI notes that MTN and Vodacom appear to have taken the lead among major service providers in the region in the corporate solutions market.

BMI notes that there are still significant growth potentials in the consumer market, particularly the data segment. However, we argue that the corporate market offers better prospects for long-term revenue growth. This view is supported by the rising demand for corporate ICT solutions by large and small companies in the region owing to a combination of increase in economic activities, availability of advanced broadband networks and infrastructure, such as submarine and terrestrial fibre-optic networks, and the growing convergence and mobility of IT and telecoms services. Furthermore, the corporate segment is less likely to experience the kind of price erosion that blighted the consumer market for most of the last three years. We will closely monitor the response of other major operators, including Airtel, Orange and Etisalat, to the corporate solutions trend.

This article is tagged to:
Sector: Telecommunications
Geography: Africa, Cote d`Ivoire, Cameroon, Ghana, Nigeria, Uganda, South Africa

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