MOBILE TELECOMMUNICATION NETWORK (MTN) INTERNALISATION

By
Yahaya Marufdeen Opeyemi
Introduction
Multinational enterprises and small and medium scale enterprises are making international
enviroment more complex today; many are adopting different forms of strategies aimed at serving
global markets. Mobile telephone network (MTN) is a multi-national telecommunications group
offering voice and data communications products and services to individuals and businesses.
In 1994, MTN formerly called M-Cell; the parent company was incorporated as a South Africa
company and owned 25% of MTN Holdings (Mtn Group, 2019). MTN is being known as a
company born out of democracy with headquarters in Johannesburg, Gauteng because this was
the year in which the country democratically elected Nelson Mandela as president; the year in
which apartheid was officially ended in the country. Between the years 1995-1996, MTN
Holdings underwent internal restructuring as it continued to provide mobile phone access to its
customers in South Africa. M-Cell converted to a public limited liability company and MTN
Holdings bought up the service provider M-Tell.

International expansion in the telecommunication industry has been dominated by Western

protagonists. The past decade has seen the leading players from developed European markets –
Vodafone, Orange, Telefonica, Deutsche Telekom, TIM, and Telenor – take their domestic
experiences and operations and replicate them in neighbouring countries, before heading even
further afield (Ruiz Vazquez, 2009). MTN in this case can be categorizing as born global
company which began internationalization activities vision rapidly without preceding longterm
domestic.

The company browfield and greenfield investment method have position them in countries of
fast-growing, youthful populations that are forecast to grow by another 50 million over the next
few years. Presently, the company subcribers have reach 233 millions, as they now offer voice,
data and digital services to retail customers in the 22 countries in which they have telecoms
operations licenses. Also the company offer enterprise solutions to corporate and public-sector
customers in a total of 24 countries (MTN integrated report, 2018).
Disscussions

Internationalization of MTN

MTN begin it internationalization journey in year 1997, as the company adopted acquisition,
licenses, joint ventures, and partnership methods to position themselves in many markets. The
company started expanding into other Africa market, as it acquired licenses in Uganda, Rwanda
and Swaziland.

M-Cell also increased its stake in MTN Holdings to 72%. In 2000, MTN acquired a national
GSM license in Cameroon while M-Cell acquired the remaining shareholding in MTN Holdings
from Transnet. To continue with the internalization process, the company acquired National
GSM 900 and GSM 1800 licenses in Nigeria to launched operations in August 2001. M-Cell
acquired CITEC, a tier-one internet service provider (renamed MTN Network Solutions in May
2002) to increase the range of data service provided to corporate customers (Maketa lutete,
2009).

In 2002, M-Cell was renamed MTN Group Limited to reinforce African presence and awareness
of the brand. MTN celebrate its 10 years of operation recording 10 million subscribers, and in
2018 this figure was increased to more than 200 million subcribers. Also, in 2005 MTN’s total
investment reaches GBP630 million as it opened office in Iran in April that year with the
acquisition of 49 percent of the company Irancell now referred to as MTN Irancell (Shasika,
2008).

The company vision is to be the leader in telecommunications in emerging markets. This was its
main motivation in recent partners with Kaios technologies, chian and some other important
agreement in order to improve their position in international telecommunication market. Also, in
order to fulfill its vision has an expansion strategy that includes the acquisition of thriving firms
in the telecoms industry of countries in which it has permission to operate in. This is precisely
the method it used to enter and gain market share in Ghana with its acquisition of Investcom
limited which owned Scancom, the operators of Areeba – a thriving mobile operator in the
country. The former “CEO Phuthuma Nhleko said its future expansion would probably take the
form of mergers and acquisitions owing to the limited number of licenses on offer (Creamer T.
2008).
Another driver of MTN’s expansion strategy is “fairly” unique product. In its entirety, 3G
network is not specific to MTN but prior to 2009 in emerging market mobile operators, it was
not very common. As at 2009, India, the world’s IT powerhouse had no 3G network. MTN has
this technology and is leveraging it to deploy it to its countries of operation in Africa and the
Middle-East.

Another factor that has also played a role in MTN’s meteoric expansion is saturated domestic
market. The South African mobile market in which it operated in was getting saturated and as
such, expansion was the only way to go. With mobile penetration in South Africa hitting 44.5
million in 2009 (cellular-news, 21 January 2009), MTN had no option but to go international.

MARKETING STRATEGY

MTN’s marketing strategy derives from its corporate vision to be the leading
telecommunications provider in the emerging markets.

 Branding and innovations: Its approach to branding is a monolithic brand architecture

strategy. MTN aims to continue offering added value through its services and products.
MTN’s strategy is consumer focused and product led. The company is continually
developing new products and services which utilize the latest technology.
 Sponsoring programs: The company strategy also involves participating actively in
sponsoring programs and events that its customers are most passionate about. In Africa
and parts of the Middle East where it operates, people are really passionate about football
and music. Therefore the company established a music show (project fame) and was the
title sponsor of the 2006 and 2008 Africa Cup of Nations; and in 2010 sponsored and got
the exclusive rights to mobile content for Africa and the Middle East as well as global
marketing right of the 2010 FIFA World Cup – the highest laurel and tournament in
world football.
 Corporate social responsibilities: Apart from sponsoring programs, the company also
sponsors several sustainability initiatives in countries it operates through the MTN
Foundations, this Corporate Social Responsibility (CSR) or Corporate Social Investments
(CSI) is aimed at improving the living conditions and wellbeing. This lead to the
establishment of MTN Foundation in 2011. The CSR framework initiatives of the
company revolve around Health, Education and Culture.
MTN Bright Stategy

MTN BRIGHT operational strategy was introduced in 2017 to focus on building sustainable
business across the country of operation and planning ahead for more market penetration.
This strategy creates value across six capitals, which includes;

 Best Customer Experience: focuses on improving in constructive relation with

customers and trade partner and regulations
 Return and Efficiency: objective to improve market capitalisation and medium term
guidance to investors on the company financial performance
 Ignite Coommercial Performance: focuses on improving strong team, investment in
employees training, manually beneficial partner ecosystem and joint ventures
 Growth through Data and Digital: ensuring a leading africa brand by making sure
affordable data are available to people in order to improve active internet users
 Heart and Minds: the company also plans to improve engagement with employees,
ethics awareness among employees and business partners
 Technology Excellence: the main services of the firm depend on technology, thereforfe
strategy to improve in technological development by implementing radio infrastructure,
transmission; smart capex tool efficient was established.

Therefore, MTN set out adequate guidelines to achieve these strategies and review annually
as published the MTN Group annual intgrated report.

Swot Analysis

STRENGTHS WEAKNESSES
 Strong brand with largest market share  Major setback in Nigeria market with
in 15 countries Nigeria communication commission
 Strong subcribers base with more than imposing penalty
230 millions  Currency fluanction in the major
 Comprehensive range of innovaties markets
product and services
 First mover advantage in some
countries

OPPORTUNITIES THREATS
 Digitilization to drive growth of  Power shortage across africa affecting
telecommunication player telecommunication infrastructue
  Huge potential in iranian markets after  Political developments and unrest
sanctions removal across middle east and north Africa
region
 Inadequate infrastructure facilities in
major markets
Source: MTN Integrated report, (2017)

MTN Nigeria

Nigeria as the most populous country in Africa has always been an important market for
companies targeting Africa market. The country economy is very dynamic and diversified;
presently the country is the highest subcriber to MTN services and revenue generation. However,
MTN just like any other Africa companies’ target Nigeria market which failed them twice. The
first attempt was when the company tries to acquire CDAM operator intercellular license, which
was unsuccessful and the second attempt was acquisition of license in with integrated mobil
services (IMS) as a joint venture. This cost the company USD 300,000 for 55/45% stake
(Maketa, 2009). But this also turned out unsuccesful due to change in government system from
military system to civilian system of government that led to the revoked of all telecoms licenses.

Unlike other telecommunications companies presently as at then, including vodafone, MTN tried
to penetrate Nigeria market the third time with by establishing the following strategic plans:

 Environmental scanning: To penetrate a market it is important to focus on the

environment factors, in the case of MTN in Nigeria the head of business unit of the
company open a small office prior to establishment in order to study the market and
gather adequate research on the past failure.

 Political consideration: to establish themselves in the market and with past failure due
to political constrait for their establishment. MTN therefore, decided to invite partners for
investment base on who is politically influence partner but not a politician and also
association with different regime of government.
 Financial and capacity building : the company also established a strategy in order to
improve their finacial capability to access capital to invest, infrastructure and property

Finally, MTN acquire it own license of operation rather than focusing on the initial plans of
acquition or joint ventures.
Conclusion

the internalization journey of MTN have been face major contraints, which includess the
presence in the Eastern European and South American markets of more established and
prominent global mobile operators. Owing to the scale of presence in the emerging markets of
Eastern Erope of large telecom companies as Vodafone, Mobitel, T-Mobile etc. and in South
America of Telcel, Telefonica etc. the company MTN is restricted from advancing into these
markets in line with its vision for emerging markets. As a result, the best opportunities for MTN
then remain the Asian markets as the African market saturates. However, with the afirca martket
the company has also being restraints with the ability to secure adequate finance, local
competitions, political instability, backbone infrastructures, low per capita income in most
developing countries and slow liberalisation of telecom markets (Ruiz Vazquez, 2009).

Therefore, it is important for the company to focus more on digitalisaiton for sales and services,
keep pricng competitive and develop additional capabilities, functionality and competencies to
further improve enterpricse busincess offerings and services for maintainance and further
expansion in the international market.

References
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Maketa lutete, (2009): MTN Entry Strategy in Nigeria. Journal of Business and Management.
MTN Group. About Us. Available: https://www.mtn.com/who-we-are/about-us/history/
Accessed: 29/03/2019
MTN Group Limited, (2019). Integrated Report for the year ended 31 December 2018.
Available: https://www.mtn.com/wp-content/uploads/2019/03/MTN-AR-2019_LORES.pdf
Accessed: 29/03/2019.
Ruiz Vazquez, Juan (2009): Analysis of Market of Entry Strategies of European Wireless
Operators into Underseved Markets.
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Multinational A Case Study Of South Africa’s Mtn Group
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