Business

End of the gilded age

Telcos will need to reinvent themselves to remain profitable.

01 November 2024

Speak to any mobile operator, and they’ll tell you they’re trying to transform themselves from a telco to a techco. The phrase has been around for at least the last five years, but other than using more technology in their businesses, it’s not entirely clear what it actually means. There will be talk of optimising cost structures, or improving the digital experience in pursuit of a better customer experience; there may be some kind of automation brought to bear, as well as getting better insights from their data. It may also mean adopting cloud services, and, at least nowadays, rolling out some kind of GenAI capability. Then again, it’s not like they have a choice. With declining voice revenues, sprawling software development and IT estates, and more OTT players, the golden years of the telco are behind them, and most are seeing declining revenues. Still, they need to keep investing in their networks, and local telcos spent around R25 billion last year, according to PwC.

MTN is Africa’s biggest telco, with over 280 million customers in 17 markets, and it, too, is cleaving to the telco-to-techco mantra, both in its group strategy and among its software developers. In its half-year interim results at the end of June, it reported a 20.8% decline in service revenue to R85.3 billion and a 41.2% decrease in ebitda to R29 billion. One growth area is in Mobile Money (MoMo), which saw a 9% increase in customers. To get a sense of how this is changing the nuts and bolts of the organisation, I spoke to Ashley Bruyns, a seasoned software engineer who’s spent more than two decades developing and building telco systems, mainly for Vodacom, but now for MTN as a senior manager in its Software Solutions department.

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