Omdia View: September 2024

In the Middle East and Africa, some key highlights during September 2024 were the partnership between MTN and ZTE to introduce Africa's first 5G ultra-range maritime offshore coverage in coastal towns in South Africa, and MTN Group launching a commercial 5G network in Congo-Brazzaville.

Meanwhile, Vodacom South Africa launched low-cost 4G cloud-based phones aimed at improving smartphone penetration and data uptake, and in Kenya, Safaricom introduced a standing order feature on the M-Pesa mobile money service.

In the Middle East, Ooredoo Group announced a ten-year hybrid financing deal with Qatar National Bank (QNB), Doha Bank and Masraf Al Rayan to support its data center and artificial intelligence (AI) business.

Here are Omdia's top telecom highlights for September 2024 across the Middle East and Africa.

MTN and ZTE claim first 5G marine network in Africa 

— by Thecla Mbongue, Omdia research manager for the Middle East and Africa.

On September 19, 2024, MTN and ZTE announced Africa's first 5G ultra-range maritime offshore coverage in the coastal town of Mossel Bay in the Western Cape province of South Africa.

The implementation of an ultra-range 5G network will enable high-speed, reliable Internet access in previously hard-to-reach maritime areas, bringing connectivity to the region's waters, delivering more than 210 Mbit/s throughput at 22km from the shore.

The network is expected to revolutionize maritime connectivity, enhance tourism and significantly boost the economic prospects of local fishermen.

By launching this 5G maritime network in South Africa, MTN wants to strengthen its position as a leader in digital transformation and open new horizons for economic growth and technological advancement across the continent.

The deployment of 5G ultra-maritime coverage will support innovative applications such as real-time vessel tracking, advanced navigation systems and remote monitoring, contributing to safer and more efficient maritime operations.

In South Africa, MTN's 5G network covered 44% of the South African population in the third quarter of 2024, up from 25% in 2023.

Until this new launch, MTN and other African telcos focused initially on fixed wireless access (FWA) broadband in their 5G strategy.

MTN Congo-Brazzaville pioneers 5G in Central Africa

— by Thecla Mbongue, Omdia research manager for the Middle East and Africa.

On October 7, 2024, MTN launched 5G in Congo-Brazzaville. This is the first 5G network in Central Africa as other operators are still running trials in the Democratic Republic of the Congo (DRC) and Gabon.

Until then, MTN had been providing mobile and fixed wireless broadband over 4G, competing against Airtel's similar 4G offerings as well as fiber broadband from Congo Telecom and Canalbox.

Both fiber networks offer unlimited broadband services at monthly fees starting from XAF15,000 (US$25).

On MTN's network, monthly fees start from XAF10,000 ($16) for a 20GB data allowance and XAF45,000 ($75) for an unlimited allowance. Airtel doesn't provide unlimited access and the cheapest FWA broadband package is priced from XAF15,000 ($25) for a 40GB data allowance.

The launch will help MTN reinforce its broadband offering with faster speeds and better quality of service (QoS) for some applications, notably in the enterprise segment.

However, Omdia forecasts that 5G usage will only represent 25% of the country's telecom subscriptions by 2029 due to the relatively high cost of devices and limited coverage.

Vodacom South Africa sells low-cost 4G cloud-based phones

— by Thecla Mbongue, Omdia research manager for the Middle East and Africa.

On September 17, 2024, Vodacom South Africa introduced a cloud-based phone to reduce the cost of smartphone access in the country and to accelerate the migration of customers from legacy networks to modern 4G networks.

The new cloud-based phone combines cloud computing and a range of features typically associated with entry smartphones at a more affordable price.

Popular applications such as YouTube, TikTok and Facebook come as standard with the cloud-based phone, all accessed via the cloud, giving users a "smartphone lite" experience.

The device will retail at R249 ($14). According to Davide Tacchino, managing executive for terminals at Vodacom South Africa, many South Africans still rely on 2G and 3G networks.

Vodacom's new cloud-based phone. (Source: Vodacom)

The lite smartphones benefit those that traditionally cannot afford traditional smartphones. The cloud phone will also help customers not familiar with the touchscreen experience to transition smoothly to the data and application world.

According to Omdia, 4G is the dominant mobile technology in South Africa. The technology represented 51% of the 125 mobile subscriptions in the second quarter of 2024, followed by 3G with 45%. 5G and 2G subscriptions shared 2% of the subscriptions each.

In June 2024, the South African government pushed back the deadline to shut down 2G networks from 2025 to 2027.

The new entry-level 4G cloud-based feature phones will help accelerate the migration of the small segment of the population that still cannot afford smartphones.

Safaricom introduces a standing order feature for M-Pesa users

— by Danson Njue, Omdia senior research analyst, Middle East and Africa.

On September 20, 2024, Safaricom launched M-Pesa Ratiba, a feature that enables users to set up standing orders on their M-Pesa mobile money wallets to support seamless and automatic payments of recurring transactions and bills.

According to Safaricom, the new feature enables daily, weekly, monthly or yearly automatic fund transfers through a simple and seamless setup process while incurring zero penalties for cancelled or failed standing orders due to insufficient funds.

Through the new service, Safaricom aims to enhance financial inclusion in the country while advancing the cash-lite economy.

In addition, the telco believes the new service will play a key role in driving subscription services while unlocking new opportunities in media and entertainment, software and technology, health and wellness, education and e-commerce.

M-Pesa Ratiba is accessible via USSD or the M-Pesa super-app, a lifestyle app launched in 2021, which has more than 80 mini-apps offering products and services in payments, savings and loans.

Ooredoo secures $545.7M financing deal to drive data center and AI expansion

— by Walaa Ibrahim, Omdia senior research analyst, Middle East and North Africa.

Ooredoo Group announced a QAR2 billion ($549 million) financing agreement aimed at accelerating the growth of its data center and AI business.

The ten-year hybrid financing deal was signed with Qatar National Bank (QNB), Doha Bank and Masraf Al Rayan.

According to Ooredoo, this marks the largest transaction of its kind in Qatar's technology sector, both in terms of value and tenure.

The funds from the deal will be used to carve out Ooredoo's existing data center assets and expand the company's capacity while modernizing infrastructure.

This expansion comes as demand for AI, cloud services and hyperconnectivity continues to rise across the Middle East and North Africa (MENA) region.

Ooredoo currently operates 26 active data centers in Qatar, Kuwait, Oman, Iraq and Tunisia.

With partnerships with key hyperscalers, Ooredoo offers a range of cloud-based services, including software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS).

Earlier this year, Ooredoo announced a collaboration with Nvidia to leverage its advanced computing platforms.

By upgrading its data centers, Ooredoo aims to strengthen its leadership in providing digital infrastructure to hyperscalers, enterprises and governments across the region.

Ooredoo's strategic plan includes expanding its data center capacity to over 120 megawatts, supported by a planned $1 billion investment in the medium to long term.

You can find Omdia's full Middle East & Africa News Digest here.

For more information about Omdia's consulting capabilities, contact them directly at [email protected] or reach out to the Omdia analysts by emailing [email protected].

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