MTN, Airtel’s $400 Million Bet: A Play for Nigeria’s Startup Infrastructure
MTN and Airtel, two of Africa’s largest telecommunications companies, are making a significant investment in the Nigerian tech landscape. They are injecting close to $400 million (₦613.81 billion) to broaden their services beyond traditional voice and data offerings. This ambitious move is designed to provide core infrastructure for startups, focusing on cloud computing and artificial intelligence services, in an attempt to capture a larger share of the burgeoning tech market.
Challenging the Tech Giants and Local Players
The primary aim of this substantial investment is to position MTN and Airtel as the preferred providers for Nigerian startups. Their strategy involves competing head-on with established global players like Amazon Web Services (AWS), Google Cloud, and Microsoft Azure. The telcos are adopting several key strategies, including naira-denominated pricing, offering high-performance AI compute capabilities, and implementing accelerator programs to attract and support startups. According to Lynda Saint-Nwafor, MTN’s chief enterprise business officer, there is a distinction between simply billing in naira and being genuinely priced in naira. This approach aims to retain millions of dollars in tech spending within Nigeria, curbing capital flight overseas. However, MTN and Airtel’s move also puts them in direct competition with growing local providers such as Nobus Cloud and Layer3. These local players have gained momentum, especially after the significant devaluation of the naira in 2023. The key difference is that unlike the telcos, these smaller providers do not own their infrastructure and instead utilize open-source platforms such as OpenStack. MTN and Airtel believe their ownership of the complete infrastructure stack gives them a significant pricing and competitive advantage.
The strategic move by MTN and Airtel signals an interesting shift in the African tech scene, as telecom giants try to gain significant footing in the infrastructure services market.
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