Millicom says digital services can nearly double revenue by 2017

Millicom says digital services can nearly double revenue by 2017

25 SEP 2014

Millicom, a Luxemburg-headquartered telecoms group with mobile operations in Africa and Latin America, repeated its goal of generating $9 billion in sales by 2017 – spurred on by digital growth – which is a dramatic hike from the $5.2 billion turnover posted in 2013.

The group is counting on increased sales of mobile data, broadband, pay-TV and mobile banking as it continues its transformation into a “digital lifestyle company”.

Millicom appears to be moving in the right direction. In a performance update the company highlighted that overall revenue (in local currency) is growing at an annual rate of 9 per cent. Mobile is moving forwards by 6 per cent, cable 16 per cent, and mobile financial services up by 41 per cent.

The company says 23 per cent of its users now use mobile data services compared with 17 per cent a year ago.

We began to convert the company into a digital lifestyle provider last year and now, with talented global and local teams, we are committed to the rapid implementation of this plan,” said Hans-Holger Albrecht (pictured), Millicom’s chief executive. “Millicom’s growth and transformation is well on track.”

A projected EBITDA margin of 35 per cent in 2017, however, is slightly lower than previously expected. “The lower EBITDA-margin businesses are growing a bit faster than anticipated,” said Millicom’s CEO, quoted by Reuters, referencing cable and digital services.

The acquisition in Colombia of cable and fixed line operator UNE, which currently has a EBITDA margin of 27 per cent, will also be a drag on profit margins in the near term, said Albrecht.

Coinciding with its performance update, Millicom unveiled two new digital music initiatives in Africa. One is Tigo Music, which is set to launch across Millicom’s African operations, starting in Ghana, in Q4. Bundled as part of prepaid data plans, the service will offer unlimited music streaming with instant access to a library of more than 30 million songs. Tigo is Millicom’s mobile brand.

The other initiative is Africa Music Rights (AMR), a new venture in partnership with Africori (an online music licensing platform) to fund, acquire and manage music rights.

IT News Africa reported that Millicom will fund the overwhelming majority of AMR, which will serve the whole African continent (where 70 per cent of music consumed is locally produced). AMR will invest in rights directly from artists, writers, micro-labels and others.

Key areas for AMR growth, according to the report, include South Africa, Nigeria and Kenya, as well as Millicom’s six Tigo markets.

Author

Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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