The mobile phone customers are migrating to digital services.
While voice revenues are under threat and data produces low margins and requires higher levels of capital investment.
These shifts will or are already changing the mobile phone industry, and also offer mobile phone companies economic opportunities.
Many mobile phone operators bosses are recognizing that there are, and will continue to be, financial reasons to pay attention to these shifts.
One company that is aware it needs to replace formerly lucrative voice revenues with digital content and service revenues is MTN, Africa and Middle East largest mobile phone operator.
The South African-based company is already focusing its strategy on building future revenues by getting into digital services.
“We see significant opportunity to grow subscribers and voice revenue as we also execute on the large mobile data opportunity,” Rob Shuter, MTN CEO, said on Thursday after the company rewarded shareholders as earnings soar.
“We are also extending our BRIGHT strategy to build MTN into a digital operator with a major focus on the fintech, digital, enterprise and wholesale business areas.”
Shuter added that key focus areas for 2019 are the launch of our MTN’s music streaming and instant messaging applications and extending MTN mobile money from 14 to 18 countries through launches in Nigeria, Afghanistan and Sudan.
In South Africa, the company is also planning to relaunch mobile money.
“We will launch our mobile money offering in the coming months. This, together with new media offerings, is expected to drive growth in digital revenue,” the company informed investors on Thursday.
Fintech includes Mobile Money (MoMo), insurance, airtime lending and e-commerce.
In the year to end-December 2018, MTN reported a 46.8% rise in Fintech revenue to R7.8 billion.
By year-end, MTN had 27 million active mobile money users in 14 markets.
“Both the liberalisation of the mobile financial services market in Nigeria (through the offering of Payment Services Bank (PSB) licences) and the launch of mobile money in South Africa are expected to support an acceleration in our MoMo business in the next few years,” the company said.
What also exciting is that MTN has already built itself a $100 million gaming business.
Everyone in the telecoms industry knows that the way people are using their mobile phone services has changed significantly over the past several years. Every year more and more people move from simple voice/SMS services to digital services such as the popular mobile money in Africa, e-commerce, digital music, etc.
This change pushes the mobile phone industry to adopt new business model(s) and become digital service providers.
So far, MTN seems to be winning the battle for the consumer in the digital space across Africa.