MTN to launch new services in Cyprus, aims for 20% market share

Private mobile phone operator MTN launched a new corporate image Wednesday, taking over the three-year-old business of Areeba and announcing that it plans to expand into new fields of communications services.

MTN Cyprus CEO Bassel Jamaleddine told reporters at a press launch of the “Y’ello” branding campaign that “our role in Cyprus is telecoms in general.”

He said that with new services such as IPTV looming around the corner, MTN is also talking to other alternative service providers in Cyprus.

“We used the first three years to concentrate only on mobile telephony. Now we are looking at other services as well,” Jamaleddine said in response to questions about involvement in Internet services, WiMax and fixed telephony.

“Either we start new services from scratch or we partner with an existing provider. We are discussing different solutions with alternative providers,” he said.

MTN is expected to introduce upgrades to existing products in early October including the Pay Monthly, Pay-as-you-talk and business services.

“We have increased our geographical coverage by more than 25% and we are developing a new loyalty programme that will be offered to every subscriber,” Jamaleddine added.

He said that MTN’s market share stood at about 16% and hoped to close the year at 16.5%. However, the target is for an ambitious increase to 20% in 2008, representing an increase from the current 125,000 subscribers to about 190,000-200,000 by the end of next year.

“It was never a risk to invest in a market like Cyprus where economic growth is tremendous. The environment was too monopolistic in the beginning and we had a lot of hopes because of EU accession and anticipation of liberalization,” Jamaleddine said, adding that “things will be easier in the future.”

He said that the regulatory framework still needed some work.

“The last European Commission report [on telecoms] said that the government had much to do to improve and the situation in 2007 is no different. Now, there is a Commission team that is compiling the next report to be issued in February 2008, where we hope certain issues will be highlighted.”

MTN’s main concern is the problem it continues to face on the issue of new antennas and the absence of full and fair competition, Jamaleddine said.

Looking at international operations MTN Cyprus, and Areeba before that, has built up a network of roaming agreements with 228 operators worldwide and in the case of Europe it boasts full 2G coverage.

“By the end of September we expect to have 100% GPRS coverage thanks to our international gateway in Monaco, which is also being utilized by other MTN Group companies.”

Jamaleddine did not hide his delight at the fact that the Johannesbourg-based MTN Group became a global sponsor of the 2010 FIFA World Cup to be held in South Africa, which opens up “a tremendous potential” for MTN’s MobileTV service in Cyprus. At present the menu includes CNN and local content from Antenna and Sigma, but more is expected to be added, while the company clinched a sponsorship deal with local football champs Apoel.

Nozipho January Bardill, speaking on behalf of MTN Group President and CEO Phutuma Nhleko, said that social corporate responsibility is also a significant aspect of MTN operations in all 21 countries of presence.

“We invest and provide community services in the fields of education, health, culture and sports and 1% of our profits after tax is injected into the local funds that support the various programmes,” she said.

As regards the expansion of the MTN network, Bardill said that MTN’s philosophy has been to invest in emerging markets, “which is why Nigeria is our biggest market. We also look for other opportunities.”

The Cyprus operations, part of the Middle East and North Africa cluster, contributed some CYP 16 mln (EUR 27.3 mln) to Group earnings in 2006, while MTN as a whole reported a staggering first half revenue of CYP 2.11 bln (EUR 3.6 bln) this year with 48 mln subscribers. The MENA cluster includes Syria, Iran, Afghanistan, Sudan and Yemen.

Areeba entered the Cypriot market in July 2004 six months after winning an eleven-round auction at CYP 12.75 mln (EUR 21,36 mln) to become the second mobile phone operator on the island, following the state monopoly Cytamobile-Vodafone. It was the first to introduce the 3G network on the island and currently operates an integrated 3G/2.5G network. With a market share of 16% it is on target to reach the 25% minimum penetration rate as set by the licensing authority.

Areeba was a wholly owned subsidiary of Investcom LLC Luxemburg of Lebanese interests, which in May 2006 was taken over by the South Africa-based MTN Group for USD 5.526 bln, expanding the MTN network from 11 countries to 21.

The MTN Group was established in 1994 and is currently listed on the JSE Securities Exchange.