Jay-Z’s Tidal in partnership with MTN in bid to enter Africa’s market

(Reuters) – Telecom firm MTN Uganda is betting on a new music streaming product to boost revenue and counter declining voice call sales, its chief marketing officer said in an interview.

The carrier, a subsidiary of Johannesburg-listed MTN Group, is the largest in the East African country where it has a subscriber base of more than 10 million and competes chiefly with Bharti Airtel.

But last year its revenue per user stood at US$2.2, down from US$3.4 three years earlier, amid competition from Over the Top (OTT) call and chat services offered by American giants such as Google and Facebook.

“It’s a do or die,” Chief Marketing Officer Olivier Prentout told reporters, describing the necessity to explore for new, unconventional sources of revenue and added that other partnerships may follow in sectors such as health and education.

“There was a time when the telcos could own everything. The voice, it was us. SMS, it was us. But with the internet coming suddenly there’s a lot of OTTs that are coming and playing in the sphere of the telecoms.”

MTN’s revenue from voice call business in 2017 declined 8.7 percent from the previous year while in contrast data sales jumped 23 percent in the same period.

Launched this week, the streaming service, jointly offered with Jay-Z’s TIDAL platform, will compete in a market dominated by the likes of Spotify and Apple Music.

Payments will be made via Mobile Money, a cell phone-borne payments service widely used in East Africa which will eliminate the need for electronic bank cards that most users in Uganda don’t have. And data costs will be included in the subscription.

The number of internet users in Uganda has been growing rapidly and now stands at about 19 million out of a population of 40 million. The country’s youth-heavy demographics means appetite for music is plentiful.