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Telecommunication Sector Performance Review for 2017/18 March 2019 Economics & Sector Research Department Tel: 222 666 email: [email protected] www.cran.na

Telecommunication Sector Performance Review for 2017/18 ... · Telecommunication Sector Performance Review 2017/2018 Introduction The Telecommunication Sector Performance Review assesses

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Page 1: Telecommunication Sector Performance Review for 2017/18 ... · Telecommunication Sector Performance Review 2017/2018 Introduction The Telecommunication Sector Performance Review assesses

Telecommunication Sector Performance Review for 2017/18

March 2019

Economics & Sector Research Department Tel: 222 666 email: [email protected] www.cran.na

Page 2: Telecommunication Sector Performance Review for 2017/18 ... · Telecommunication Sector Performance Review 2017/2018 Introduction The Telecommunication Sector Performance Review assesses

Table of Contents

Introduction 1Trends 1Financial Performance of the Telecommunication Sector 4

Mobile Telecommunications Limited (MTC) 7Telecom Namibia Limited (Company) 9Conclusion 11

Mobile Telecommunication KPIs 12MTC - KPIs 12TN Mobile - KPIs 17Mobile Traffic 17International Traffic 18Mobile Network Infrastructure 19Mobile Price Benchmarking 20

Wired Services 24Subscribers 24Landlines Revenues 25ADSL 26Leased Lines 26Fibre to the Home 27International connectivity 27

Consumer complaints 28Conclusion 28References 28

Page 3: Telecommunication Sector Performance Review for 2017/18 ... · Telecommunication Sector Performance Review 2017/2018 Introduction The Telecommunication Sector Performance Review assesses

Telecommunication Sector Performance Review 2017/2018

Introduction

The Telecommunication Sector Performance Review assesses developments in the telecommunication sectors for 2017 and some 2018 data were added. The review takes into account the financial health and performance of Namibian operators; consumer price developments in the telecommunications sector; changes in the competitive landscape; and general trends for 2017 and 2018.

Trends

A number of organisations such as GSMA, Ericsson and others make annual predictions on worldwide trends in ICT and specifically telecommunications. It seems that all are in agreement that the issues for 2018 would be OTTs and value-added services, 5G, and cyber security. Operators have argued that OTTs have diminished voice and SMS revenues and warned that the resulting decline of overall revenues leads to lower investment in network infrastructure, substandard quality of service, lower tax revenues and lower licensing revenues. A paper by Esselaar and Stork (2018) indicates that most operators across Africa have experienced revenue growth due to an OTT-induced increase in data revenues that outpaces potential decreases in voice and SMS revenues. Projections indicate that 2018 was set to be another pivotal year for over-the-top (OTT) service growth, fuelled by streaming of video and public demand for more non-linear media consumption.

Figure 1: Number of Whatsapp messages sent worldwide per day (Source: Statista)1

https://www.statista.com/chart/13762/whatsapp-messages-sent-per-day/1

"1

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CRAN ICT Sector Performance Review 2017/2018

On MTC’s network, about 98% of Instant Messaging (IM) was done by utilising WhatsApp as can be seen in Figure 2 below.

Figure 2: Total Data Traffic of top IM Application Aug - Nov 2018 (Source: MTC)

Growth is driven both by the rising number of smartphone subscriptions and increasing average data volume per subscription, fuelled primarily by more viewing of video content at increasingly higher resolutions. In Q2 of 2018, mobile data traffic grew by around 52 percent year-on-year and 9 percent quarter-on-quarter. There are however large differences in traffic levels between markets, regions and operators.

Figure 3: Trends towards “Access” only business models (source: Esselaar & Stork 2018)

The largest operators are moving beyond their traditional telco businesses (mobile and fixed) to explore new revenue streams in a fast-changing competitive landscape. While this strategic play has different flavours, timelines and scales, the predominant drivers are the convergence of

1%

98%

Whatsapp IMWeiXin IMQQ IMSkype IMIOS PushMessageHangouts IMTelegram Messenger IMBadooTinderViber IMOutside Top 10

2000 2005 2010 2015 2020

100%40%30%20%

60%

70%

80%

100%

Voice + SMS Data

"2

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Telecommunication Sector Performance Review 2017/2018

telecoms and media, the rise of IoT and the evolution of the wider digital ecosystem. It is expected that mobile operators will eventually become “access” providers, distinguishing their products simply by speed and quality of service, and competing with other forms of access, such as Public WiFi and connectivity in places of work, study and home.

As OTTs become the dominant form of communication, billing and marketing functions are rapidly simplified - one MB of data is easier to bill, as opposed to voice, data and SMS billing, which is dependent on destination and time of day.

Operating costs can be lessened, by reducing both the number of retail locations and commissions to agents, since there would only be one product to sell, namely data. A significant number of mobile operators will have transitioned to the Access + OTT by 2020. Traditional telecommunications companies who are unwilling or unable to change their business over the near future would be left behind or pushed out of the market.

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CRAN ICT Sector Performance Review 2017/2018

Financial Performance of the Telecommunication Sector

Namibia has only two national telecommunications operators who are now entirely owned by the state, the same as before opening the market in 2006. CRAN approved the transfer of all shares to the state in the beginning of 2018. While smaller operators gained market share in terms of assets and revenues, the sector remains highly concentrated with MTC and Telecom Namibia controlling 91% of the assets and 88% of the revenues in the market.

�Figure 4: Assets as market shares for the financial years ending in 2013- 2017 (company)

While smaller licensees have increased their share in assets and revenues the high market concentration raises the concern of insufficient competition with higher consumer prices and lower quality of service as a result. This is particular because MTC is dominant for mobile telephony and Telecom Namibia for fixed-lines and national data connectivity.

The smaller licensees mainly resell Telecom Namibia’s services and thus are only competing with Telecom Namibia on retail level, not on wholesale level. MTC shows for the first time since 2013 a higher market share in assets than Telecom. This is mainly due to their investment in towers to roll-out their services on a national level with their 081Every1 campaign.

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

8.8%7.1%4.6%2.8%2.4%

48.2%40.5%39.2%40.3%37.6%

43.0%52.4%56.2%56.9%60.0%

Telecom Namibia MTC Others

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Telecommunication Sector Performance Review 2017/2018

�Figure 5: Assets in N$ million for the financial years ending in 2013- 2017 (company)

While Telecom Namibia and MTC dominate the industry, some of the other licensees have gained market share in terms of revenue.

�Figure 6: Revenues as market shares for the financial years ending in 2013- 2017 (company)

Figure 5 shows a slight drop in asset value in Namibia’s ICT sector in 2015 and 2017. There has been a significant drop in the asset value of TN due to the CDMA assets that were sold to ZTE Corporation of China.

Revenues increased significantly over the past five years (Figure 7), while the revenue of Telecom Namibia decreased in relation to other operators since 2013 as indicated in Figure 6.

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

427345219132118

2,3301,9671,8491,9201,822

2,0812,5462,6512,7102,875

Telecom Namibia MTC Others

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

12.1%11.9%11.0%8.9%8.7%

54.3%53.3%54.6%55.2%54.4%

33.6%34.8%34.4%35.9%36.9%

Telecom Namibia MTC Others

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CRAN ICT Sector Performance Review 2017/2018

�Figure 7: Revenues in N$ million (company)

The asset turnover for smaller licensees has been higher the past four years than for MTC and Telecom Namibia, which is not surprising since they mostly resell services based on Telecom Namibia’s assets. However, as the asset base increases, mostly due to investment in fiber networks, the asset turnover is converging (Figure 8)

Figure 8: Asset turnover- revenues as share of asset value (company)

While revenues and assets are mostly controlled by Telecom and MTC, it is MTC that is responsible for the bulk of net profits in the ICT sector, 91% in 2017. This is a decline from 97% in the previous year.

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

542521454

318309

2,4322,3242,2512,0821,932

1,5031,5181,4201,3531,310

Telecom Namibia MTC Others

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

1.261.51

2.07

2.552.29

1.041.181.22

1.081.01

0.720.600.540.500.46

Telecom Namibia MTC Others

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Telecommunication Sector Performance Review 2017/2018

Figure 9: MTC’s share of total net profits- losses excluded (company)

Competition has declined in 2017 and the first half of 2018 due to the uncertainty about MTC ’s ownership and management after the transfer from Africatel Holdings B.V to Samba Luxco S.A.R.L. In 2018 all shares were transferred from Samba to NPTH and therefore MTC is now 100% state-owned. Both MTC and Telecom Namibia are now fully owned and managed by the state through NPTH.

In terms of investment, Paratus and MTN are the only serious contenders for growth with a share of 7.4% and 6.4% of total additions to property plant and equipment in the Financial Year 2017.

Mobile Telecommunications Limited (MTC)

MTC’s revenues increased consistently and it yielded phenomenal EBITDA margins of above 50% in the last seven years, with 57.9% in 2017. MTC’s shareholders benefitted from a return on equity of N$0.47 per N$1 invested in 2017.

The shareholders’ equity more than doubled from N$646 million to N$1,507 million, despite high dividend payments. Dividends paid by MTC increased from million N$110 to million N$489 during the past ten years, an increase in payout of more than four times. Most of the after-tax profits were disbursed as dividends in the past seven years and exceeded company profits in 2011 and 2015.

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

91.2%97.3%95.0%97.1%98.0%

Table 1: Addition to Property, Plant & Equipment 2016 2017

N$ million % N$ Million %

MTC 184.4 60.4% 203.7 85.2%

TN Group 69.1 22.6% 0.0 0.0%

Paratus 46.3 15.2% 17.7 7.4%

MTN 3.3 1.1% 15.4 6.4%

Bidvest 1.2 0.4% 2.2 0.9%

SALT 1.1 0.4% 0.0 0.0%

Total 305.4 100.0% 238.97 100.0%

Source: Annual reports

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CRAN ICT Sector Performance Review 2017/2018

Additions to property, plant and equipment dropped in the financial years ending in 2014 and 2

2015 significantly and rose again in 2016 and 2017 due to the investment in the 081Every1 campaign with the aim of a 100% population coverage. This resulted in a lesser dividend paid to the shareholder in 2017.

Due to MTC’s factual mobile monopoly, a concern is that the next growth wave, mobile broadband, may be missed or delayed. At the end of 2018, 3G population coverage stood at almost 82% while 4G stood at a mere 37% .

Table 2: MTC’s KPIs Company 2011 2012 2013 2014 2015 2016 2017

RevenueN$ million 1,453 1,617 1,832 2,082 2,251 2,324 2,422

YoY growth 11.3% 13.3% 13.7% 8.1% 3.2% 4.2%

Shareholders’ equityN$ million 1,121 1132 1,173 1,212 1,186 1,284 1,507

YoY growth 1.0% 3.6% 3.3% -2.2% 8.3% 17.4%

Taxation N$ million 160 167 248 241 231 272 325

Net profit after taxN$ million 319 353 425 505 491 579 711

YoY growth 10.7% 20.3% 18.9% -2.7% 17.9% 22.7%

DepreciationN$ million 174.9 207.7 205.5 231.4 231.9 198.2 170.5

% of revenues 12.0% 12.8% 11.2% 11.1% 10.3% 8.5% 7.0%

Total assetsN$ million 1,696 1,711 1,822 1,920 1,849 1,967 2,330

YoY growth 0.9% 6.5% 5.4% -3.7% 6.4% 18.5%

Total liabilities (N$ million) 575 579 649 704 663 682 823

Asset Turnover 0.86 0.95 1.01 1.08 1.22 1.18 1.04

Financial leverage 0.51 0.51 0.55 0.58 0.56 0.53 0.55

DividendsN$ million 364 341 384 462 522 481 489

% of after tax profit 114% 97% 90% 91% 106% 83% 69%

Return on equity 28% 31% 36% 42% 41% 45% 47%

Profit margin 22% 22% 23% 24% 22% 25% 29%

EBITDA 775 860 1,007 1,138 1,178 1,305 1,403

EBITDA margin 53.2% 53.2% 55.0% 54.7% 52.4% 56.2% 57.9%

Active SIM cards in 1000 1,855 2,043 2,380 2,574 2,443 2,422 2,489

Full-time staff 407 421 461 488 517 518 534

Monthly ARPU in N$ (calculated not reported) 65 66 64 67 77 80 81

Source: MTC annual reports, 2011-17

Table 3: MTC’s CAPEX 2011 2012 2013 2014 2015 2016 2017

Net profit after tax N$ million 319 353 425 505 491 579 711

Addition to Property, Plant & Equipment

N$ million 127 208 222 161 109 184 204

YoY growth 63.5% 7.1% -27.5% -32.5% 69.3% 10.6%

% of after tax profit 40% 59% 52% 32% 22% 32% 29%

Table 3: MTC’s CAPEX

Investment from a regulatory perspective refers to additions to property plant and equipment, in particular additions to telecommunications 2

equipment. Capital expenditure reported in glossy annual reports by mobile operators often include marketing expenses for customer and acquisition expenditure, neither of which increases network quality.

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Telecommunication Sector Performance Review 2017/2018

While EBITDA margins still increase, revenue growth has slowed down. Revenues grew by 4.2% in 2017, while net profit grew by 29%. MTC is being run as a cash cow and not an innovative expanding business any longer. The increase in revenue is mainly due to a 7% increase in subscription prices for MTC approved by the CRAN in the beginning on 2017.

Telecom Namibia Limited (Company)

Telecom Namibia (TN) has not managed to continue the growth in revenues experienced in 2016 and revenue declined in 2017. TN, however, experienced the first positive return on equity and a net profit in five years. At the same time liabilities and assets decreased, effectively shrinking TN. Table 4 displays the addition to Property, Plant & Equipment for TN Group. It declined in 2014, 2015 and 2016 and nothing was invested in 2017.

TN may be able to realise profits again if it can gain efficiency and focus on growing revenue streams; wholesale prearranged connectivity in the form of leased lines, ADSL, FTTx and metro ethernet.

Addition to Network Equipment

N$ million 102 179 101 109 91 148 164

% of after tax profit 32% 51% 24% 21% 19% 26% 23%

Source: MTC annual reports, 2011-17

2011 2012 2013 2014 2015 2016 2017Table 3: MTC’s CAPEX

Table 4: Telecom Namibia’s annual report data (company) 2011 2012 2013 2014 2015 2016 2017

RevenueN$ million 1,143 1,223 1,310 1,353 1,420 1,518 1,503YoY growth 7.0% 7.1% 3.3% 5.0% 6.9% -1.0%

Taxation N$ million 40 27 -18 102 66 19 -6Net profit/loss after tax N$ million 50.6 56.6 -87.5 -555.6 -83.9 -41.2 6.9

Total assetsN$ million 2,566 2,629 2,875 2,710 2,651 2,539 2,085YoY growth 2.4% 9.4% -5.8% -2.2% -4.2% -17.9%

Total liabilitiesN$ million 1,374 1,376 1,744 2,134 1,759 1,688 1,245YoY growth 0.2% 26.7% 2.0% -17.5% -4.0% -26.2%

Gearing 53.5% 52.4% 60.6% 78.7% 66.4% 66.5% 59.7%

Shareholders’ EquityN$ million 1,192 1,252 1,132 576 892 851 840YoY growth 5.1% -9.7% -49.1% 54.9% -4.6% -1.3%

Dividend N$ million 0 0 0 0 0 0 0Asset Turnover 0.45 0.47 0.46 0.50 0.54 0.60 0.72Return on Equity 4.2% 4.5% -7.7% -96.5% -9.4% -4.8% 0.8%Financial Leverage 1.2 1.1 1.5 3.7 2.0 2.0 1.5Profit Margin 4.4% 4.6% -6.7% -41.1% -5.9% -2.7% 0.5%Source: Annual reports, 2011-17

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CRAN ICT Sector Performance Review 2017/2018

TN Group shareholders equity increased to N$ 815 million in 2017.

TN also reports on segment profits. This reveals that the profit margins are the highest for fixed voice and interconnection revenues with 88%. Fixed-voice remains a cash cow for TN followed by data services.

The segment profits mask, however, the main problem that TN faces in becoming a profitable operator, namely excessive administrative expenses, which make up more than half of the

Table 5: Telecom Namibia’s annual report data for Group 2011 2012 2013 2014 2015 2016 2017

RevenueN$ million 1143 1,223 1,312 1,378 1,431 1,532 1,518

YoY growth 7.0% 7.3% 5.0% 3.8% 7.1% -0.9%

Net profit/loss after tax N$ million -87 57 -168 -205 -54 -26 247

Total assetsN$ million 1992 1,593 2,370 2,514 2,435 2,309 2,081

YoY growth -20.1% 48.8% 6.1% -3.1% -5.2% -9.9%

Total liabilitiesN$ million 1374 1376 1,896 2,246 1,823 1,724 1,266

YoY growth 0.2% 37.8% 18.4% -18.8% -5.4% -26.6%

Gearing 69.0% 86.4% 80.0% 89.3% 74.9% 74.7% 60.8%

Shareholders’ EquityN$ million 618 216 474 268 612 585 815

YoY growth -65.0% 119.0% -43.3% 128.0% -4.4% 39.3%

Return on Equity -14.2% 26.1% -35.4% -76.5% -8.8% -4.5% 30.3%

Financial Leverage 2.2 6.4 4.0 8.4 3.0 2.9 1.6

Profit Margin -7.7% 4.6% -12.8% -14.9% -3.7% -1.7% 16.3%

Addition to Property, Plant & Equipment: All

N$ million 173.2 235.1 445.4 332.4 137.3 125.3 0.0

YoY growth 35.7% 89.4% -25.4% -58.7% -8.8% -100.0%

Source: Annual reports, 2010-17

Table 6: Telecom Namibia’s Group Revenue Segmentation 2011 2012 2013 2014 2015 2016 2017

Mobile N$ million 44.6 69.2 160.4 170.5 108.3 105.5

Fixed voice revenues incl. interconnection revenues

N$ million 536 516.4 437.1 418.5 407.4 399.1 348.0YoY growth -3.7% -15.4% -4.3% -2.6% -2.1% -12.8%

Data and IP services revenuesN$ million 452 541.7 637.9 652.1 705.0 875.9 905.3YoY growth 19.8% 17.8% 2.2% 8.1% 24.2% 3.4%

Source: Annual reports, 2011-17

Table 7: Telecom Namibia’s Group Revenue and profit segmentation for 2017

Segment revenue N$ million

Segment Profit N$ million

Profit as share of revenues

Mobile 105.5 65.5 62.1%Fixed voice revenues incl. interconnection revenues 348.0 306.5 88.1%Data and IP services revenues 905.3 712.8 78.7%Source: Annual report, 2017/18

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Telecommunication Sector Performance Review 2017/2018

revenues. If this is not contained TN will never be able to compete effectively against other operators in the Namibian market.

Figure 10: `TN’s administrative expenses in million N$ (company)

Conclusion

Namibia’s telecommunication sector is dominated by state-owned enterprises MTC and Telecom Namibia. All other licensees contribute just 12% of turnover and mostly resell services of Telecom Namibia and MTC. Telecom Namibia’s financial performance has shown some improvements in various areas. Telecom Namibia’s mobile operation failed to pose serious competition to MTC. MTC’s increased investment levels coupled with high ROEs and TN’s lack of investment indicate that TN is not likely to be a strong competitor in the near future. Namibia is back at the pre-2006 state of the affairs with all national operators being fully owned and managed by the state.

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

791.9734.3748.8849.7

680.7638.9642.6

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CRAN ICT Sector Performance Review 2017/2018

Mobile Telecommunication KPIs

The number of active SIM cards continue to increase and stood at 2.76 million in December 2018, a slight increased of 3%. Postpaid subscribers declined marginally but mobile broadband increased dramatically with almost 59%. This can likely be attributed to more affordable smartphones becoming available and MTC upgrading its 3G network.

MTC - KPIs

Prices are top-level indicators that reflect the competitive environment most effectively. They need to be interpreted in conjunction with others KPIs such as Average Revenue Per User (ARPU), Minutes of Use (MOU) and subscriber numbers. Implied prices are calculated by taking the monthly average revenue per user (ARPU) and dividing it by the monthly average minutes of use per user (MOU). Analysing implied prices provides a picture on price developments independent of advertised prices and product choices of users. They are not actual prices per minute since voice ARPUs may include non-voice items such as handsets, termination rate revenues and revenue for SMS. The trend is as important as the effective price value.

The average cost of prepaid minutes dropped to below 15 cents in 2018. MTC’s implied price for postpaid products is higher, and increased in 2017 to above N$ 0.90. However, the prices decreased in 2018 significantly. The reason for the high postpaid effective price might be the inclusion of handsets in the voice ARPU figures. They can either be directly or indirectly priced into the monthly subscription amount. Prepaid ARPU’s are thus a better indicator of implied per minute prices.

Any operator wishing to compete with MTC in Namibia would need to build a business model around an effective price of N$0.13.

Table 8: Mobile subscriber numbers in 1000s

2013 Dec

2014 Dec

2015 Dec

2016 Dec

2017 Dec

2018 Dec

Active SIM cards (‘000)

Postpaid 152 168 180 191 195 193Prepaid 2,308 2,503 2,370 2,469 2,485 2,566Total 2,539 2,671 2,550 2,660 2,680 2,759Change 5.2% -4.5% 4.3% 0.8% 3.0%

Mobile Broadband (‘000)

Dongle / Routers 67 70 37 31 36 127Mobile Phone 721 732 1,406 1,580 1,377 2,114Total 788 802 1,443 1,611 1,413 2,241Change 1.8% 80.0% 11.6% -12.3% 58.6%

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Telecommunication Sector Performance Review 2017/2018

Figure 11: MTC’s implied prices (voice APRU divided by MOU)

Reasons for a user keeping their postpaid number includes getting the handset financed and convenience of not running out of airtime and having to recharge. Companies also increasingly rely on mobile phones for in-house communication instead of using a fixed-line PABX, creating a solid block of customers that would not change to prepaid if they had the choice.

Jan-

Mar

201

4

Apr-J

un 2

014

Jul-S

ep 2

014

Oct

-Dec

201

4

Jan

- Mar

201

5

Apr -

Jun

201

5

Jul-S

ep 2

015

Oct

-Dec

201

5

Jan

- Mar

201

6

Apr -

Jun

201

6

Jul-S

ep 2

016

Oct

-Dec

201

6

Jan

- Mar

201

7

Apr -

Jun

201

7

Jul-S

ep 2

017

Oct

-Dec

201

7

Jan

- Mar

201

8

Apr -

Jun

201

8

Jul -

Sep

t 201

8

Oct

- D

ec 2

018

0.90 0.900.82 0.84 0.88 0.87 0.90 0.92 0.91 0.89

0.94 0.91 0.88 0.87 0.850.92

0.670.74

0.640.70

0.26 0.29 0.290.24

0.17 0.20 0.18 0.18 0.18 0.17 0.17 0.16 0.16 0.16 0.16 0.16 0.15 0.13 0.13 0.13

Prepaid Postpaid

Table 11: MTC-s prepaid and postpaid subscribers

Prepaid Postpaid Total

Active SIM cards YoY Active SIM cards YoY Active SIM cards YoY

Jul-Sept 2012 1,922,147 120,448 2,042,595Oct-Dec 2012 2,024,498 5.3% 122,335 1.6% 2,146,833 5.1%Jan-Mar 2013 2,065,259 2.0% 123,210 0.7% 2,188,469 1.9%Apr-Jun 2013 2,074,708 0.5% 125,581 1.9% 2,200,289 0.5%Jul-Sep 2013 2,141,481 3.2% 128,020 1.9% 2,269,501 3.1%Oct-Dec 2013 2,248,022 5.0% 132,260 3.3% 2,380,282 4.9%Jan-Mar 2014 2,273,881 1.2% 136,197 3.0% 2,410,078 1.3%Apr-Jun 2014 2,275,159 0.1% 139,122 2.1% 2,414,281 0.2%Jul-Sep 2014 2,328,969 2.4% 143,124 2.9% 2,472,093 2.4%Oct-Dec 2014 2,427,042 4.2% 146,852 2.6% 2,573,894 4.1%Jan - Mar 2015 2,457,172 1.2% 148,062 0.8% 2,605,234 1.2%Apr - Jun 2015 2,423,471 -1.4% 149,860 1.2% 2,573,331 -1.2%Jul-Sep 2015 2,226,874 -8.1% 150,659 0.5% 2,377,533 -7.6%Oct-Dec 2015 2,290,458 2.9% 152,182 1.0% 2,442,640 2.7%Jan - Mar 2016 2,287,573 -0.1% 153,524 0.9% 2,441,097 -0.1%Apr - Jun 2016 2,250,188 -1.6% 156,673 2.1% 2,406,861 -1.4%Jul-Sep 2016 2,395,162 6.4% 157,865 0.8% 2,553,027 6.1%

Table 11: MTC-s prepaid and postpaid subscribers

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MTC is currently competing against itself: postpaid versus prepaid. With postpaid customers typically being locked in for 24 months postpaid customers are less price sensitive. Nonetheless, MTC’s postpaid customers started to decline since the fourth quarter 2017. This could be due to the recession or to better offerings by MTC for prepaid customers but, possibly also due to lack of state of the art smartphones as part of MTCs postpaid offerings. While MTC was still competing with Leo both operators were keen to offer the latest devices as a strategy to win new postpaid customers. Since MTC and TN are both owned by the state there is less need to compete on latest devices on offer any longer for either MTC or TN. This will gradually make the prepaid market more interesting where consumers buy the latest devices cash.

Figure 12: MTC Voice ARPU

Two trends may affect the postpaid ARPU in opposite ways. The replacement of feature phones by smart-phones leads to an increase in postpaid ARPUs, while the declining smart-phone prices lead to a decrease.

Postpaid monthly average minutes of use (MOU) declined since 2012 until the first quarter of 2014, where it started to increase again and then remained on a fairly constant level. Prepaid

Oct-Dec 2016 2,469,351 3.1% 159,110 0.8% 2,628,461 3.0%Jan - Mar 2017 2,302,648 -6.8% 159,478 0.2% 2,462,126 -6.3%Apr - Jun 2017 2,262,361 -1.7% 160,490 0.6% 2,422,851 -1.6%Jul-Sep 2017 2,293,210 1.4% 160,787 0.2% 2,453,997 1.3%Oct-Dec 2017 2,328,801 1.6% 160,509 -0.2% 2,489,310 1.4%Jan - Mar 2018 2,529,897 8.6% 160,434 -0.0% 2,690,331 8.1%Apr - Jun 2018 2,505,756 -1.0% 160,409 -0.0% 2,666,165 -0.9%Jul - Sept 2018 2,530,779 0.0% 161,193 0.5% 2,691,972 0.1%Oct - Dec 2018 2,565,976 2.4% 158,894 -0.9% 2,724,870 2.2%

Prepaid Postpaid Total

Active SIM cards YoY Active SIM cards YoY Active SIM cards YoYTable 11: MTC-s prepaid and postpaid subscribers

Jan-

Mar

201

3

Apr-J

un 2

013

Jul-S

ep 2

013

Oct

-Dec

201

3

Jan-

Mar

201

4

Apr-J

un 2

014

Jul-S

ep 2

014

Oct

-Dec

201

4

Jan

- Mar

201

5

Apr -

Jun

201

5

Jul-S

ep 2

015

Oct

-Dec

201

5

Jan

- Mar

201

6

Apr -

Jun

201

6

Jul-S

ep 2

016

Oct

-Dec

201

6

Jan

- Mar

201

7

Apr -

Jun

201

7

Jul-S

ep 2

017

Oct

-Dec

201

7

Jan

- Mar

201

8

Apr -

Jun

201

8

Jul -

Sep

t 201

8

Oct

- D

ec 2

018

252524272930302831313030323128273231292832

322929

110109111110154145145149157157156161165167156165159157169170175281281279

Postpaid Prepaid

"14

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MOU on the other hand, continues to rise, due to the bundling products of the Aweh family and surpassed postpaid mid-2016.

Figure 13: MTC MOU

Other trends that influence ARPUs and MOUs are a shift to Over The Top (OTT) services, a 3

postpaid/prepaid substitution and new postpaid product design.

• When new postpaid products offer more bundled minutes than before at the same monthly subscription level then this will reduce the out-of-bundle calling.

• Most contract (postpaid) subscribers use smart-phones and feature phones that support OTT use such as WhatsApp, Facebook, Skype, etc. Out-of bundle calling may be reduced and replaced by OTTs.

• Postpaid/prepaid substitution may not necessarily be a SIM card swap but a usage substitution. A contract subscriber may use a prepaid SIM card alongside the contract for out-of-bundle use or cheap data connectivity. It may be a combination of all three that explains these trends.

Mobile versus data revenues

Data revenues, as percent share of voice revenues, continue to increase. At the end of 2018 data revenues exceeded voice revenues. It seems that the upgrading of the MTC network from 2G to 3G/4G is showing results. 3G coverage in 2018 covers 82% of the population but 4G coverage is still at a low 37% compared to about 80% in South Africa.

Mon

thly

min

utes

of u

se p

er su

bscr

iber

0

55

110

165

220

Jan-

Mar

201

3

Apr-J

un 2

013

Jul-S

ep 2

013

Oct

-Dec

201

3

Jan-

Mar

201

4

Apr-J

un 2

014

Jul-S

ep 2

014

Oct

-Dec

201

4

Jan

- Mar

201

5

Apr -

Jun

201

5

Jul-S

ep 2

015

Oct

-Dec

201

5

Jan

- Mar

201

6

Apr -

Jun

201

6

Jul-S

ep 2

016

Oct

-Dec

201

6

Jan

- Mar

201

7

Apr -

Jun

201

7

Jul-S

ep 2

017

Oct

-Dec

201

7

Jan

- Mar

201

8

Apr -

Jun

201

8

Jul -

Sep

t 201

8

Oct

- D

ec 2

018

Prepaid Postpaid

Over-the-top series are provided by third parties and may include text messaging, voice calls and media content. WhatsApp, Facebook, 3

Skype, Viper, Talkray, FaceTime are examples for OTT services. "15

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Figure 14: MTC Data revenues as share of voice revenues

Subscribers

While active mobile broadband subscribers grew since 2012, the number of subscribers using dedicated dongles dropped considerably in the first half of 2015 and continues to fall. This is the result of a shift in access patterns away from computers and laptops and towards smart-phones and tablets. The recent investments by MTC in 3G upgrade is reflected in fast broadband subscriber growth towards the end of 2018.

Jan-

Mar

201

3

Apr-J

un 2

013

Jul-S

ep 2

013

Oct

-Dec

201

3

Jan-

Mar

201

4

Apr-J

un 2

014

Jul-S

ep 2

014

Oct

-Dec

201

4

Jan

- Mar

201

5

Apr -

Jun

201

5

Oct

-Dec

201

5

Jan

- Mar

201

6

Apr -

Jun

201

6

Jul-S

ep 2

016

Oct

-Dec

201

6

Jan

- Mar

201

7

Apr -

Jun

201

7

Jul-S

ep 2

017

Oct

-Dec

201

7

Jan

- Mar

201

8

Apr -

Jun

201

8

Jul -

Sep

t 201

8

Oct

- D

ec 2

018

123%

103%103%

79%63%64%65%66%62%58%58%56%53%52%50%

28%25%26%25%22%18%16%16%

Table 12: MTC Data Subscribers

Jan - Jun

2014

Jul -Dec

2014

Jan - Jun

2015

Jul -Dec

2015

Jan - Jun

2016

Jul -Dec

2016

Jan - Jun

2017

Jul -Dec

2017

Jan - Jun

2018

Jul - Dec

2018

Standard mobile-broadband subscriptions (on mobile phones) (‘000)

692 732 809 1,406 1,488 1,611 1,607 1,413 1,452 1,638

Dedicated mobile-broadband subscriptions (dongles)

65,830 69,945 48,101 37,432 33,303 31,251 31,384 35,656 35,795 31,902

All mobile-broadband subscriptions (‘000) 758 802 857 1,444 1,455 1,580 1,576 1,377 1,839 2,114

Change 5.8% 6.8% 68.5% 0.8% 8.6% -0.3% -12.6% 33.5% 14.9%

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TN Mobile - KPIs

For TN to compete with MTC it needs to invest in the network infrastructure, which is currently unlikely to happen due to falling mobile and fixed-line ARPUs. The monthly ARPU for mobile subscribers dropped from N$ 141.5 per month in 2016 to only N$ 47 in 2017.

The fixed-line ARPU is also declining, yet at a slower pace. TN will be loosing its retail revenues over time if this trend prevails and would be naturally transitioning to a wholesale company.

Mobile Traffic

MTC has a factual monopoly when it comes to outgoing traffic calls made and SMS sent. MTC ’s market share continues to be above 99% for SMS but voice has gone down to about 96% in 2018.

Figure 15: MTC’s market share of total outgoing mobile voice

Table 13: Telecom Namibia’s Group Revenue Segmentation 2015 2016 2017

Mobile

N$ million 170.5 108.3 105.5Subscribers 100,429 159,913 187,238Monthly ARPU 141.5 56.4 47.0

Fixed voice revenues incl. interconnection revenues

N$ million 407.4 399.1 348.0Subscribers 198,800 200,502 191,947Monthly ARPU 170.8 165.9 151.1

Source: Annual reports, 2015-17

Jan

- Jun

201

4

Jul -

Dec

201

4

Jan

- Jun

201

5

Jul -

Dec

201

5

Jan

- Jun

201

6

Jul -

Dec

201

6

Jan

- Mar

201

7

Apr -

Jun

201

7

Jul -

Sep

t 201

7

Oct

- D

ec 2

017

Jan

- Mar

201

8

Apr -

Jun

201

8

Jul -

Sep

t 201

8

Oct

- D

ec 2

018

95.8%95.7%97.4%96.1%96.2%98.6%96.7%96.7%99.2%99.2%99.2%99.0%98.6%98.2%

"17

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Figure 16: MTC’s market share of outgoing SMS

MTC’s outgoing traffic is mostly on-net and only 0.8% of minutes dialled by MTC customers were to TN Mobile subscribers in the second half of 2018.

This is despite off-net price caps, which safeguard that calls to other networks cost the same as calls within the own network. TN Mobile’s traffic is the inverse of that from MTC, mostly off-net, 83% or more in 2018, as one would expect for an operator with low subscriber numbers.

International Traffic

International traffic continues to decline with the increased option of mobile broadband Over The Top (OTT) services such as Facebook, Skype and WhatsApp. This is confirming the trends laid out in the Trend section.

Jan

- Jun

201

4

Jul -

Dec

201

4

Jan

- Jun

201

5

Jul -

Dec

201

5

Jan

- Jun

201

6

Jul -

Dec

201

6

Jan

- Mar

201

7

Apr -

Jun

201

7

Jul -

Sep

t 201

7

Oct

- D

ec 2

017

Jan

- Mar

201

8

Apr -

Jun

201

8

Jul -

Sep

t 201

8

Oct

- D

ec 2

018

99.9%99.9%99.9%99.9%99.9%99.9%99.9%99.9%99.9%99.9%99.9%99.9%99.9%99.9%

Table 14: Distribution of outgoing traffic by

operator

Jan- Jun 2015

Jul - Dec 2015

Jan- Jun 2016

Jul - Dec 2016

Jan - Jun 2017

Jul - Dec 2017

Jan - Jun 2018

Jul - Dec 2018

MTC

On net 97.6% 97.7% 97.8% 97.8% 97.8% 97.8% 97.7% 97.7%

Off-net mobile 0.3% 0.3% 0.3% 0.4% 0.4% 0.6% 0.7% 0.8%

Off-net fixed-line 1.5% 1.4% 1.5% 1.4% 1.4% 1.3% 1.3% 1.2%

International 0.6% 0.5% 0.5% 0.4% 0.4% 0.3% 0.3% 0.3%

TN Mobile

On net 5.3% 6.0% 5.5% 5.7% 5.8% 5.7% 5.7% 5.1%

Off-net mobile 75.5% 75.9% 77.1% 76.2% 76.0% 79.5% 83.1% 83.5%

Off-net fixed-line 13.1% 16.9% 17.3% 17.8% 15.3% 12.2% 9.5% 7.1%

International 6.0% 1.3% 0.1% 0.3% 3.0% 2.6% 1.8% 4.3%

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Figure 17 : Fixed and mobile International incoming and outgoing minutes in million

Mobile Network Infrastructure

Telecom Namibia only has a fifth of the base stations (BTS) that MTC has installed. This poses a severe limitation for customer acquisition in the absence of a national roaming agreement.

In terms of data connectivity, Telecom Namibia is at an advantage, due to its national fiber network and multiple international gateways.

Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018

13.3 13.015.0

16.918.9

15.813.2

11.6 11.1

4.8 4.9 4.0 4.0

29.2 29.8 29.727.7 27.7

25.7 25.123.6 23.6 22.7

19.817.2

21.0

Incoming Outgoing

Table 15: Mobile’s Infrastructure Dec 2012

Dec 2013

Dec 2014

Dec 2015

Dec 2016

Dec 2017

Dec 2018

Total international down link bandwidth in Gbit/s

MTC 1.5 2.6 5.1 3.7 5.2 15.3 15.3Telecom Namibia 4.1 10.3 8.2 17.0 28 50.5 88.0

Number of base stations (Mobile )

MTC 1042 1088 1110 1246 1310 1475 1491Telecom Namibia 266 278 320 269 274 277 278

"19

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Mobile Price Benchmarking

The reduced competition in the mobile sector due to both mobile operators being 100% owned by the State led to Namibia slipping in the African price benchmarking. It led to Namibia falling further behind in terms of affordability. While Namibia was amongst the 10 cheapest countries for mobile broadband data in Africa at the beginning of 2015, it is now in the lower third of the field. Forty four (44) African countries were cheaper for 1GB per month of prepaid data use at the end of 2018. Namibia ranks 24th among African countries in terms of cheapest voice and SMS product in a country in Q4 2018.

Namibia’s rank is better for low usage such as 100MB per month (Rank 22) and for higher usage such as 5GB (Rank 24). The latter due to the Jiva and Aweh product ranges that bundle 5GB per month on monthly basis.

Figure 18 displays the prices for 1GB prepaid usage per a month in Q4 2018 The cheapest product in Namibia cost USD10.3 compared to Mozambique’s USD 1.5 and Zambia’s USD 1.8.

Table 16: African rank for cheapest product available in Namibia (Source: Research ICT Solutions)

Prepaid Mobile broadband OECD basket: 30 calls and 100 SMS100 MB 500 MB 1GB 2GB 5GB 10GB 20GB

2015_Q1 8 8 7 8 5 5 5 16

2015_Q2 9 9 7 9 5 5 5 17

2015_Q3 10 13 10 10 8 8 8 17

2015_Q4 8 16 14 10 10 10 10 14

2016_Q1 8 16 14 8 4 6 6 15

2016_Q2 11 20 18 11 4 7 7 16

2016_Q3 15 21 19 15 11 13 14 15

2016_Q4 13 20 19 16 13 14 14 18

2017_Q1 15 24 23 18 14 15 16 18

2017_Q2 20 25 24 20 13 14 16 17

2017_Q3 18 25 23 21 13 14 16 19

2017_Q4 19 29 25 20 14 15 17 17

2018_Q1 20 37 31 26 19 23 25 25

2018_Q2 20 37 29 25 18 22 25 23

2018_Q3 19 36 29 27 20 21 23 22

2018_Q4 22 42 45 38 24 30 35 24

Note Only national mobile operators are considered for the ranking

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Figure 18: Cost of cheapest prepaid mobile product for 1GB prepaid per month basket in US$ in Q4 2018 (Source: Research ICT Solutions)

EgyptSudan

MozambiqueTunisia

ZambiaGhanaGuinea

RwandaBurundi

KenyaUgandaNigeria

TanzaniaMadagascar

CameroonNiger

SenegalCote d'Ivoire

EthiopiaCongo Brazzaville

LesothoAlgeriaMalawi

MauritiusLiberia

GambiaAngola

Cape VerdeBenin

MoroccoSouth Sudan

MauritaniaComoros

South AfricaGabon

MaliBurkina FasoSierra Leone

ZimbabweTogo

D.R CongoBotswana

Central African RepublicSao Tome and Principe

NamibiaSwaziland

LibyaChad

Guinea-BissauSeychelles

Somalia 15.0013.93

12.6812.18

11.2210.4010.33

9.479.20

8.848.57

7.837.29

7.177.026.966.966.92

6.085.555.53

5.285.225.175.175.085.004.884.86

4.203.70

3.563.563.513.483.483.48

2.862.802.742.68

2.422.372.242.22

2.051.801.72

1.470.77

0.56

"21

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As a result of the high prices Namibians use less data per month even compared to citizens of much less affluent countries such as Ghana, Benin, Zambia, Rwanda, Ivory Cost, Sudan and Liberia. Figure 19 Compares the average use of MB per active data user of MTN to those of Namibia.

�Figure 19: Average MB use per month per active mobile broadband subscriber in 2018

Figure 20 displays the cheapest prices of TN Mobile and MTC for the 30 calls and 100 SMSs OECD basket in Namibian Dollar. MTC’s prices slightly increased in Q2 2017, but MTC remains the cheapest operator for voice and SMS.

Figure 20: Cost of cheapest prepaid mobile product for OECD 30 calls and 100 SMSs per month basket by operators in N$ (Source: Research ICT Solutions)

Figure 21 displays the cheapest products from TN Mobile and MTC for the 1GB mobile broadband basket. The increase in the 1GB basket in Q4 2018 for MTC is due to the increase in the minimum recharge amount from N$ 17 to N$ 25 for its Aweh O Yeah product.

MTN Liberia

MTN Sudan

MTN Benin

MTN Ghana

MTN Rwanda

MTN South Africa

MTN Ivory Coast

MTN Zambia

Namibia

MTN Nigeria 1,177

1,276

1,2941,351

1,382

1,597

1,8191,825

1,839

1,927

40

53

65

78

90

2015

_Q1

2015

_Q2

2015

_Q3

2015

_Q4

2016

_Q1

2016

_Q2

2016

_Q3

2016

_Q4

2017

_Q1

2017

_Q2

2017

_Q3

2017

_Q4

2018

_Q1

2018

_Q2

2018

_Q3

2018

_Q4

2019

_Q1

MTC TN Mobile

"22

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�Figure 21: Cost of cheapest prepaid mobile product for 1GB prepaid per month basket by operators

in N$ (Source: Research ICT Solutions)

It is not that prices have increased massively in Namibia but that other countries, with more effective competition, have become cheaper. While Namibia used to be one of the cheapest countries in Africa, when the privately-owned Leo was in competition with MTC, Namibia now falls further behind in the all state-owned NPTH set-up.

40

105

170

235

30020

15_Q

1

2015

_Q2

2015

_Q3

2015

_Q4

2016

_Q1

2016

_Q2

2016

_Q3

2016

_Q4

2017

_Q1

2017

_Q2

2017

_Q3

2017

_Q4

2018

_Q1

2018

_Q2

2018

_Q3

2018

_Q4

2019

_Q1

MTC TN

"23

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Wired Services

Wired services include end-user voice and data services such as landlines, fibre to the home, and xDSL.

Subscribers

Fixed-line subscriptions showed a significant decrease, caused by a drop in businesses connections, which can be partially attributed the prevailing recession. The Namibian economy has been declining since 2017 with a decline 0.2% in 2017 and a decline 1.9% in real GDP recorded in 2018. (Bank of Namibia, Quarterly Bulletin June 2019) Fixed-lines are a cash cow (see profit segmentation) and TN does not seem to have invested anything in 2017 to widen the customer base. Residential fixed-line subscription still increased, which can partially be a re-classification of a business line into residential line since ADSL subscription did not grow in 2018.

The next major investment would be to convert all existing voice lines into data lines. Currently, this is a gradual process, reflected in the continuous increase of ADSL subscriptions. There was an increase in the customer base for higher speed broadband which can be attributed to TN’s upgrade of speed without any additional cost to the customer approved in 2017. Fibre to the home is still a marginal service in Namibia.

Table 9: Fixed -line subscribers 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec Dec 2018

BusinessNumber 99,107 121,871 119,975 121,517 123,530 90,050Change 23.0% -1.6% 1.3% 1.7% -27.1%

ResidentialNumber 84,425 60,722 62,532 66,336 69,213 79,759Change -28.1% 3.0% 6.1% 4.3% 15.2%

TotalNumber 183,532 182,593 182,507 187,853 192,743 169,809Change -0.5% -0.0% 2.9% 2.6% -11.9%

Table 10: Other subscribers 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec

ADSL

10 Mbps and above 57 84 224 416 535 1,1172 to 10 Mbps 4,014 5,087 6,307 8,706 31,489 31,586below 2Mbps 29,776 36,041 39,660 44,259 21,950 21,311Total 33,847 41,213 46,192 53,381 54,524 54,014Total YoY growth 27.3% 21.8% 12.1% 15.6% 2.1% -0.9%

Fibre to the home 11 11 158 252 498MetroNet (ethernet) 5 5 32 57 591 496Leased lines 10,189 10,875 8,462 9,874 7,621 6,489Other wireless 90 123 53 14 364 268Satellite / VSAT 266 319 354 354 542 701VoIP 7 66 127 3,286 3,233 3,750

"24

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Fixed VoIP services are showing some growth as more and more companies are switching to VOIP services and more operators offering these services.

Landlines Revenues

Telecom Namibia, as Namibia’s only national fixed-line operator, faces declining voice revenues, which is a global trend due to wider use of mobile phones and the use of VoIP applications such as Skype WhatsApp and Facetime. Fixed-to-mobile and voice-to-data substitutions happen at the residential and business level. While fixed-lines are not necessarily cut by businesses, business communication traffic has been shifted to mobile and VoIP. This is an international trend also reflected in Namibia.

�Figure 22: Telecom Namibia’s fixed voice revenues in N$ million

Data revenues are on the increase overall and exceed voice revenues since 2012. Telecom Namibia earned more than twice as much with data than with fixed voice in 2017.

Jan-

Mar

201

6

Apr-J

un 2

016

Jul-S

ep 2

016

Oct

-Dec

201

6

Jan-

Mar

201

7

Apr-J

un 2

017

Jul-S

ep 2

017

Oct

-Dec

201

7

Jan

- Mar

201

8

Apr -

Jun

201

8

Jul -

Sep

t 201

8

Oct

- De

c 20

18

14151514141715

2117181819

323533343337343637413739

262627272728282828292828

Fixed-line rental Voice (domestic) Voice (International)

"25

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�Figure 23: Telecom Namibia voice vs data revenues in N$ million (source annual reports)

ADSL

Revenue from ADSL subscriptions has remained fairly constant over the past 2 years while high-end ADSL connections declined in Q4 2018, most likely due to the FTTh uptake.

Telecom Namibia has upgraded all its lower speed connections to 2Mbps lines to provide faster speed at flat access prices. This was done to prepare for the proposed broadband policy currently being developed by the Government.

Leased Lines

Telecom Namibia is the only licensee with an extensive national fibre network. This network can be used to provide leased line services or other forms of national backhauling. All other licensees mainly rely on its fibre network to varying extent and some resellers rely entirely on it. 4

At the retail level, Paratus has higher leased line revenues than Telecom Namibia and MTN is about on par.

2009 2010 2011 2012 2013 2014 2015 2016 2017

348.0399.1407.4418.5437.1516.4536.0639.4765.2

905.3875.9705.0652.1637.9541.7452.0417.0297.0

Data and IP services Fixed Voice

Table 17: ADSL subscriptions and revenues

2017 2018

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Subscribers

below 2 Mbps 47,144 47,144 48,602 21,950 22,362 25,674 24,571 21,311

2 to 10 Mbps 9,586 9,586 10,136 31,489 22,362 29,099 31,512 31,586

10 Mbps a+ 459 459 535 1,085 879 1,315 1,435 1,117

Total 57,189 57,189 59,273 54,524 45,603 56,088 57,518 54,014

Revenue N$ million 67.2 68.3 66.9 68.6 68.2 69.5 65.6 66.5

Paratus completed a fibre route to connect WACS to Botswana via Windhoek. The Trans-Kalahari Fibre went live in 4

2018."26

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�Figure 24: Leased line revenues in N$ million

Effective resellers provide more of an opportunity than a threat to Telecom Namibia. A wholesale only strategy may prove to be more profitable than competing in the retail market for leased lines for Telecom Namibia. Another option could be to separate the wholesale business entirely from the retail business, as separate business units within the same group. It reduces regulatory burden and promises more efficiency for retail and wholesale operations. The wholesale company could be run based on open access principles thus fulfilling its public mandate as a 100% state-owned enterprise.

Fibre to the Home

Paratus, TN and MTC have all started rolling out fibre to the home services (FTTh) in Windhoek and in the coastal towns. Fibre to the Home (FTTh) is mainly offered to newly built estates, where fibre is laid instead of copper lines. However, uptake is very slow. All operators combined reported less than 500 FTTh connections in Q4 2018.

International connectivity

In Namibia, international bandwidth capacity was increased from 13.8 Gbps in 2013 to 454.5 Gbps in 2018.

Jan

- Mar

201

6

Apr -

Jun

201

6

Jul-S

ep 2

016

Oct

-Dec

201

6

Jan

- Mar

201

7

Apr -

Jun

201

7

Jul -

Sep

t 201

7

Oct

- De

c 20

17

Jan

- Mar

201

8

Apr -

Jun

201

8

Jul -

Sep

t 201

8

Oct

- De

c 20

18

3.12.82.7

3.13.13.32.6

2.72.93.02.43.1

23.018.317.720.620.2

21.519.618.6

18.517.617.416.7

32.631.430.429.830.529.426.830.8

25.326.326.421.9

23.527.324.827.727.031.033.135.836.834.138.039.5

TN Paratus MTN Others

Table 18: FTTh subscriptions and revenues

2016 2017 2018

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Subcribers 122 122 158 158 216 216 250 252 335 380 433 498

Revenue N$ million 1.30 1.56 2.36 2.32 2.58 2.88 3.31 3.93 4.30 4.70 5.38 4.93

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CRAN ICT Sector Performance Review 2017/2018

Consumer complaints

The total number of complaints received by licensees in 2018 decreased from 37,380 to 24,365, showing the same trend with the cases that were referred to CRAN for not being resolved decreasing from 39 to 27.

Conclusion

The aim of safeguarding fair competition is to afford all Namibians access to broadband. In order to facilitate ICT sector driven economic growth and job creation broadband access and use needs to be extended geographically and in terms of quality and applications. The integration of mobile broadband in the lives of Namibians facilitates access to information and co-ordination of economic activity, and as a results leads to economic growth and job creation.

Speed and quality of service of end user connectivity are the key product differentiators nationally and internationally. Substantial investments are required to extend broadband coverage and improve on speed and quality of service.

Namibia lost it’s leading role in Africa due to state-driven consolidation and complacency of shareholders. New efforts from policy makers and legislators are required to attract private investment and help Namibia to regain its leading role, not for the sake of leading but for social inclusion and economic growth.

References

Christian, P. (2017). TeleGeography Blog, Jan 26, 2017, goo.gl/TtxYBO.

Deloitte (2016). The rise of the data exclusive, https://www2.deloitte.com/global/en/pages/technology-media-and-telecommunications/articles/tmt-pred16-telecomm-rise-of-data-exclusive.html.

Ericsson (2017). Ericsson Mobility Report, https://www.ericsson.com/assets/local/mobility-report/documents/2017/ericsson-mobility-report-june-2017.pd.

Steve Esselaar, Christoph Stork, June 2018, https://www.researchgate.net/publication/325987796_OTT_APPLICATIONS_DRIVING_DATA_REVENUE_GROWTH

Table 18: Consumer complaints received 2017 2018

Share of complaints received

Other licensees 0.0% 0.4%

Telecom Namibia Limited 16.6% 54.8%

Paratus Telecommunications (Pty) Ltd 38.7% 34.9%

Mobile Telecommunications Limited 44.7% 9.9%

Total received 37,380 24,365

Number of complaints not resolved after 14 days, which were subsequently submitted to CRAN 39 27

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