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ISSUE NO 56 ON THE MONEY

VALUE OF NIGERIAN MOBILE LICENCES QUESTIONED

At least one of Nigeria’s four mobile licences carries a potential for long-term negative returns, according to a new report by Pyramid Research. Owing to a high licence fee of $285m and capital expenditure levels likely to top $1bn, operators face an uphill battle in establishing profitable ventures, even though total market revenue is estimated to rise to almost $2bn by the end of 2005.

"This is a leader-only market," said Guy Zibi, Manager of Africa/Middle East at Pyramid Research. "There simply will not be enough revenue to go around over the next few years to support the cost base of all four proposed licences in the Nigerian market""While we expect the market to grow rapidly, we also anticipate that difficulties in establishing cellular networks and the need to compensate for a deficient or non-existent supporting infrastructure will complicate service offering over the initial years of the ventures."

Analysing communications markets in four other African countries (Cameroon, Cote-dIvoire, Ghana and Senegal), Pyramids report argues that West African communications markets are still far from their saturation points, and recommends that mobile carriers start focusing more on the fundamentals of revenue generation, rather than market share at all costs.

"Carriers such as Cameroons CAMTEL and Nigerias NITEL are truly in a danger zone, because they have to restructure their operations at the same time they face stiff competition in some of their most lucrative markets," said Zibi. "Should they fail to restructure rapidly and adequately, they may not even be in business over the long term."In the internet market, the report analyses the difficulties of the Internet in penetrating markets in the region, and anticipates that models focused on public access centres and fixed wireless broadband stand more chances of becoming successful in the local environment.

(source: Pyramid Research via DigAfrica)

ORACLE SA REALIGNMENT WITH UK DIVISION HERALDS INVESTMENT?

Oracle SA is realigning its South African operations with its UK division. The process could result in greater investment from Oracle.

(source: http://www.itweb.co.za/sections/business/2001/0104201124.asp)

MEDIA24 HEADS FOR LISTING IN NEXT THREE YEARS

The name change of Nasmedia to Media24 at the end of last year is the first of several steps towards a proposed listing of the company within the next three years, according to Media24 MD Salie de Swardt.

(source: http://www.boot.co.za/news/apr01/24media19.asp )

NETACTIVE SELLS TELEFLORIST SA

JSE-listed managed internet service provider, NetActive, has sold the floral relay service, Teleflorist SA back to its original owner, Dave Weir Smith, for the amount it invested into the business of approximately R2 million in cash.

(source: http://www.boot.co.za/news/apr01/netactive18.asp )

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