Gone are the days of easy money and megadeals in the telecoms space. Mobile phone firms that will thrive in the future are those that are diversifying their revenue streams.
Here at home, MTN, an SA-based telco, is now looking to make headway in Africa’s new “metaverse” — a buzzword that will be heard and used a lot more in years to come.
The metaverse is a term that can be traced back to Neal Stephenson’s dystopian cyberpunk novel Snow Crash. The metaverse in Snow Crash is a three-dimensional (3D) virtual reality (VR) space accessed through personal terminals and VR goggles.
The opportunities presented by interactive, digital worlds seem limitless, argues investment firm JPMorgan in its report "Opportunities in the Metaverse". “The metaverse will likely infiltrate every sector in some way in the coming years, with the market opportunity estimated at over $1-trillion in yearly revenues,” says the report.
The bank contends that business leaders and boardrooms around the world are now asking themselves, “What is my metaverse strategy? What am I supposed to be doing in the metaverse? What is the metaverse anyway?”
The metaverse is a seamless convergence of our physical and digital lives, creating a unified, virtual community where we can work, play, relax, transact and socialise.
The metaverse is still early in its evolution, and there is no singular, all-encompassing definition to which people can turn, explains JPMorgan.
MTN has made moves to be an early participant in the continent’s metaverse. This week it became the first African telco to enter the metaverse marketplace. It purchased land in Africarare, the first virtual reality metaverse in Africa.
“This is an exciting moment for us as we lead businesses on the continent to enter the metaverse marketplace,” says MTN group executive for marketing Bernice Samuels.
"This is exactly what our Ambition 2025 strategy is premised on ... leveraging trends that amplify consumers’ digital experiences and engagement. We have always been at the forefront of technological and digital changes, and we remain alive to the exciting opportunities the metaverse presents for us and our customers.’’
Through its presence in the metaverse, MTN intends to attract more customers through a series of experiences merged with consumer passion points, like gaming and music.
MTN can also follow its global peers such as South Korea’s top telco, SK Telecom, which launched a metaverse virtual environment in July 2021.
SK Telecom’s metaverse platform, ifland, quickly gained traction and attracted more users. In February the company revealed during its earnings presentation that ifland had more than 1.1-million active monthly users.
What is more exciting is that ifland draws excellent attention from diverse businesses and organisations, receiving more than 1,500 requests for partnerships.
MTN’s pursuit of a metaverse marketplace may be ambitious, but it has proven potential for growth.
JPMorgan argues that supply and demand dynamics are driving more people into the meta-economy.
“This, in turn, will necessitate the development of new skills and generate new opportunities to make money.”
However, a few things need to happen in Africa for MTN to succeed in the metaverse.
MTN boss Ralph Mupita and his team must quickly fast-track their plans to demerge their fibre business and bring in third-party investors.
MTN needs to appoint a new boss of its fibre business, which already has a network of 85,000km across Africa. To develop further, this business has to raise $500m (R7.6bn) to expand into an open-access network across the continent.
Investment in fibre is necessary because the metaverse space will require the speed and capabilities of the faster network to optimise immersive experiences. A bigger fibre network will enable MTN to lower broadband prices and attract more people to the metaverse.
Furthermore, MTN will need to find a creative way similar to the smartphone device subsidies to ensure that ordinary people can afford to be active buyers of non-fungible tokens (NFTs), VR, and augmented reality (AR) equipment.
At the same time, MTN should also continue investing in super-fast 5G, which will allow African consumers to use VR/AR headsets in the metaverse.
The metaverse will enable MTN to recoup its investment in 5G much faster. Presently, revenue from 5G is limited to sales of data packages.
In telecommunications, first-mover advantage is often significant.
No doubt MTN rivals — Vodacom and Airtel Africa — will join the metaverse race.
It is early days, but MTN hopes to be at the forefront of the profound changes promised by the metaverse. Finally, for MTN to succeed in the metaverse, it should create platforms that deal with real-Africa problems.
MTN has the potential to make the metaverse a true evolution of a universal digital platform. It must heed the call by JPMorgan that “the components of the metaverse continue to evolve very quickly”.
"It is difficult to base a business strategy on such a dynamic space, characterised by explosive growth and the continuous innovation of new entrants.
“However, the costs and risks of engaging early and consistently to build internal intellectual property, develop hypotheses about future business models, and identify ecosystem partners and collaborators are relatively low.
"The asymmetrical risk of being left behind is worth the incremental investment needed to get started and to explore this new digital landscape for yourself.”
• Lourie is a former correspondent for Thomson Reuters, Business Report, Fin24 and Finweek magazine. He is also the founder and editor of techfinancials.co.za
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