The race for low Earth orbit (LEO) satellites is gaining speed, and the technology is here to stay and must be embraced.
This is according to MTN Group president and CEO Ralph Mupita, who hosted an editors' roundtable meeting yesterday to provide insight into the mobile operator’s developments and prospects.
Mupita's comments come as satellites are increasingly being seen as an essential element of Africa's future communication infrastructure.
Amazon's first big batch of Project Kuiper broadband satellites will take flight today, as United Launch Alliance is set to loft the first 27 satellites of the more than 3 200 planned for the constellation.
MTN rival Vodacom recently told ITWeb that it is readying to connect Africans using Amazon’s Project Kuiper satellites.
Satellite networks are being positioned as crucial for enhancing connectivity in Africa, providing access to information, education, health and other key services.
“Our approach to LEO satellites is that they are here to stay and they need to be embraced as part of an ecosystem of technologies that keeps people and businesses always on,” commented Mupita.
“We are embracing these LEO satellites. It’s a space that is growing and the space is currently dominated by Starlink. I think Starlink has 6 400 satellites up there. OneWeb is the next biggest with 648. They are like a 10th the size of Starlink. The Chinese are beginning to build their own.
“So, there is actually a bit of an arms race to build real satellites for back-boarding and direct-to-device communication.”
To signal its entrance in the race, the telco’s South African subsidiary and Lynk Global recently announced Africa’s “first” satellite-to-mobile call.
MTN SA and Lynk Global last month successfully completed a technical trial of the satellite-to-mobile device phone call.
US-based Lynk Global is an LEO satellite firm that provides satellite-direct-to-device solutions.
Nigeria ownership
Meanwhile, the MTN Group is moving on with plans to increase local ownership of its Nigerian unit, including a potential 11% sell-down (76% to 65% ownership).
Nigeria is the group’s main source of revenue, accounting for 40% of total earnings, and the business has been boosting its local holdings. Last year, in the March quarter, it raised its local shareholder base to 139 000 retail investors.
Mupita announced yesterday that the firm intends to further reduce its shareholding in Nigeria.
“The only localisation we have as MTN Group is we have potentially a sell-down in Nigeria at some point in time, approximately 11%. This is something we have said long ago that over time we would want more Nigerians owning the company and we are prepared to sell down to 65%. We are at around 76%,” he commented.
“We said that will only happen at a time when the company has resolved its negative equity position, is paying dividends and we think we will be able to sell-down.”
During the briefing, Mupita highlighted MTN is anticipating a V-shaped recovery in Nigeria’s service revenue.
He pointed to the positive narrative surrounding Nigeria, backed by structural reforms, such as fuel subsidies, which were removed across Nigeria. The naira stabilised over the past four to five months, Nigeria’s central bank reserves built up to nearly 14 billion naira, and dollar availability improved at the willing buyer/willing seller level.
Furthermore, Mupita highlighted the company’s robust underlying performance, despite macro-economic challenges, with a significant improvement in the second half compared to the first half of the financial year.
Mupita emphasised MTN’s Vision 2025 strategy, which focuses on data growth and financial inclusion, alongside successful portfolio optimisation marked by exits from select markets.
“The first point we raised within our results [the 2024 annual financial results reported on 17 March] was that the underlying performance of the company has been very strong. We have had some micro headwinds in H1 and those were moderate in H2, and therefore you saw a financial profile much stronger in H2 versus H1.”
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