MTN Unveils WhatsApp Competitor That Works Even Without Data

MTN gets into the game and could be in for something bigger than powering calls and data: instant messaging. Yes, the African mobile giant plans to introduce instant messaging [IM], capturing the best of WhatsApp and WeChat in all the countries where it does business, beginning on trials in West Africa.  This is a very fascinating vision for the company. It has recognized that the future of selling data and voice is not necessarily bright with satellite competitors and ICT utilities like Google and Facebook surrounding Africa. (I do think this IM may work only for MTN customers since the company is only launching in countries it currently operates.)

MTN Group has announced it will launch an instant messaging (IM) service akin to China’s WeChat and Facebook’s WhatsApp as it seeks to expand revenue from digital services and mobile money.

With the IM platform, which will form part of the group’s mobile money initiatives, MTN wants to build what group CEO Rob Shuter calls the “WeChat of Africa”. WeChat, developed by Naspers affiliate Tencent, is by far the largest IM app in China and offers a wide range of in-app services from chat to payments.

This is the key deal why MTN has a real chance in this instant messaging business: it has the infrastructure and can make people do instant messaging even when they have no data by fusing SMS and IM. WhatsApp cannot do that today – you must have data  before you can do WhatsApp or WeChat but MTNChat [a name I just gave it] will work even when you do not have data [MTN will surely bill the SMS implying that it re-allocates funds from voice to enable data-solution to work]. MTN sees this investment as part of its future: “We are extending our Bright strategy to build MTN into a digital operator with a major focus on the fintech, digital, enterprise and wholesale business areas,” MTN Group CEO Rob Shuter said in a statement.

MTN’s Duality Element

This vision is huge and MTN needs to run it with the construct of duality element. Yes, it can give out data to help people use MTNChat to ensure MTNChat grows. As that happens, it will take market share from WhatsApp. Amazon loses money on ecommerce, crippling physical retailers which in turn go online only to sign-up for Amazon Web Services which remains very profitable. Alibaba makes listing on Alibaba.com easy but makes money via Alipay which is the default payment on Alibaba. So, let MTNChat have that interface with the voice and data business in MTN while using MTNChat to create new sources of growth revenue. This is a great double play opportunity.

For Samsung, provided Apple continues to place orders for chips, it would be fine irrespective of what happens in its mobile phone business where Samsung has been lagging: “Samsung posted lower-than-expected sales of its flagship Galaxy 9 smartphones”. But having the Galaxy series ensures that Samsung does not have to secure external orders before innovating in the chip business.

Yes, provided the chip business has an internal customer (the mobile device unit, the oasis in my strategy), Samsung will continue to commit resources as the oasis has removed most of the risks in investing billions of dollars to build new factories in the chip business. Yes, the mobile device unit (the oasis) makes the chip business better by being a “reliable customer”, irrespective of whatever happens externally. That is the heart of the one oasis and the center of Double Play Strategy in business.

All Together

The future of telcos in Africa cannot be selling voice and data credits. What MTN plans to do here is what is needed to keep this industry competitive as ICT utilities through the OTT solutions distort revenue models. As noted in the earnings call, MTN is seeing huge numbers even as it targets “double-digit growth in service revenue”.

It increased its subscriber base by 16 million to 233 million customers across 21 markets in Africa and the Middle East. The number of active data users increased by 10 million to 79 million and the active mobile money subscriber base rose to 27 million.

My only recommendation to MTN is one thing: add stablecoin features on MTNChat so that you can use it for remittance and many other things in respective local economies. Yes, with stablecoins, the cryptocurrency becomes pegged to the local currency removing the uncertainty we see in Bitcoin and Ethereum. Possibly, with this solution, we can hit that product no fintech or bank has ever built in Africa: a location-, currency-agnostic intra-African payment and remittance system.

The Digital Product No Fintech Or Bank Is Building in Africa [Video]

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