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WEEKLY PUBLICATION DEADLINE: 12 pm GMT Sunday. ISSUE NO 431 Cheaper international fibre prices in 2009 will put the squeeze on national backbone pricesAfrica’s operators say they cost their national backbone prices based on distance. The basis is that the further you want your traffic carried, the more it costs. However, this logic will soon be challenged by new, cheaper international bandwidth costs. If it costs more to send traffic from Johannesburg to Cape Town or from Lagos to Abuja than it does from any of these places to Europe, then national arbitrage will have well and truly arrived. Russell Southwood looks at what is likely to happen. Currently SAT3 prices vary from US$1,300-8,200 per mbps per month. Volume prices in South Africa fit into the bottom end of this range. Prices have recently come down in Angola to the lower end of this range, leaving Cameroon and Gabon as the high price pirates on the route. SEACOM and TEAMS are both saying that their cables will start operating in Kenya by Q2, 2009 and are offering prices that will probably translate into US$500-1,000 if operators pass along the savings made. On the west coast, Main One looks like being the first competitor cable to land in Q2, 2010 and will offer prices that will probably translate into prices for customers in the same range as on the east coast. And this where the problem begins for operators. About half of Africa’s operators are offering the same bandwidth (usually up to 500 kms) for US$2,000 or more. Only a very few are below US$1,000 and some are as high as US$4,000. These prices do not take into account a series of add-ons like access charges that actually take the global prices higher. The intelligent customers might at this point be asking themselves: why are operators able to go half way round the globe for the same price they’re charging me for going from the capital city to another city? One telco in the southern African region with a monopoly gateway gets 65% of its revenues from international traffic. The impact of lower rates will rob even competitive incumbents of significant parts of their revenue. No wonder the Zambian Communications Minister (see Telecoms News below) is trying to retain Zamtel’s monopoly gateway status because the company is already loss-making with that financial advantage. But the bad news cannot be held at bay… For the operators, pressure from customers on national backbone will become irresistible because on the basis of distance charging things will not make sense. So what can the forward-looking incumbent do? * They need to invest in IP networks where according to Huawei and Nokia Siemens Network speakers at last week’s CRASA event (Migration Towards All-IP) IP core networks are 30-50% cheaper in CAPEX terms and 30% in OPEX terms. As vendors, they would say that, wouldn’t they? But these figures seem to accord with those of operators we’ve spoken to who have made all or part of this transition. Companies with all IP networks (like South Africa’s Neotel) or who have made a real beginning with this transition possess a potent advantage over those who will have to replace their core network over the next five years. * Most incumbents are very over-staffed and the political pressure to avoid redundancies has been too great for them to avoid this core issue. Not only do they have too many staff but they have too few with the IP skills required in the future. None have any strategy for addressing this “elephant in the room”. For many IP and analogue reside in separate departments and the former is small and not influential in corporate strategy. One possible solution? Outsource the core network functions in the way that a small number of mobile carriers (for example Kasapa in Ghana) already have. You can insert focused management and higher levels of skills and control your cost levels. But for Government-owned incumbents this will require decisiveness and a clear understanding that your asset will slip through your hands if you don’t. Bankrupt companies don’t employ people for long. For customers the prospects are more cheery. Infrastructure competition will in the medium term begin to deliver real savings if they are savvy and more demanding. There are two reasons: * Vertically integrated mobile operators want to get into the business of providing core network. All of those we have spoken to – both those planning and those already doing it – agree that there are savings to be made in the 30-50% range. Countries as diverse as South Africa, Nigeria, Kenya and Ghana already have several core network (or infrastructure) providers. Some claim even higher savings as much depends on how protected the monopoly provider is. The challenge for customers is to point out the national arbitrage and demand better value. • The second factor that favours customers is the arrival of alternative infrastructure providers. Power utilities already posses fibre over transmission pylons and adding more is considerably cheaper than trenching the same capacity. Over half a dozen power utilities have been either licensed directly to sell the capacity or given permission to tender to licence-holders. One of the more recent ones was Escom in Malawi which will in the not too distant future have fibre links to Mozambique. Where this has not happened, incumbents are trying to argue that this alternative capacity should be in their hands but they are probably fighting a losing battle. In order to speed up competition in the core network at the national level, operators’s customers will have to ask two questions: what is your new international fibre costing you and how much of that saving are you passing on to me? And why is it cheaper to get my traffic to Europe than it is to transfer it around the country I live in? Best to start asking now as the excuses are bound to convoluted and lengthy.
Millicom takes Senegalese Government to International Arbitration over licence disputeMillicom International Cellular S.A. (Millicom) MIC last week announced that its subsidiaries Millicom International Operations, B.V. (MIO B.V.) and Sentel GSM S.A (Sentel), have instituted arbitration proceedings with the International Center for the Settlement of Investment Disputes (ICSID) against the Republic of Senegal under provisions of Sentel’s license and international law. MIO B.V. and Sentel seek compensation for the purported expropriation of the Senegal license and monetary damages for breach of the license. Also last week, the Republic of Senegal instituted court proceedings in Senegal against Millicom and Sentel. In that proceeding, the government alleges that it has cancelled Sentel’s license and seeks damages against Sentel and Millicom under various arguments. Millicom believes that the action filed by the Republic of Senegal is baseless and ignores the agreement between Sentel and the Republic of Senegal to submit any dispute concerning the license to an international arbitration forum. Millicom’s commitment to its business in Senegal remains strong and MIO B.V. and Sentel intend to vigorously pursue all available remedies in the matter before the international arbitration forum. (Source: Business Wire) Gambia’s Government ends its relationship with Gamtel owner, SpectrumGambia’s Office of the President issued a statement saying that it was ending its “partnership” with the current owner of the country’s incumbent Gamtel. The release states that the decision was taken "due to fundamental breaches of the provisions of the partnership agreement between the government of The Gambia and Spectrum International Holdings." The release blames this on the company’s management of the company: "This was further exacerbated by the underperformance of Gamtel/Gamcel and the deterioration of the country's telecommunication infrastructure under their watch." The release concludes by assuring each and every Gambian that the government will “never tolerate investors that try to exploit The Gambia”. And who was it who selected Spectrum to run the company? The President himself without any transparent process of selection. (Source: The Daily Observer) Telecom Namibia seeks the introduction of heavy penalties for Cable ThievesTelecom Namibia has spent over N$6 million for the replacement of copper cables plundered by thieves this year alone. And to make matters worse, the problem seems to be growing out of proportion. Managing Director of Telecom, Frans Ndoroma, last week called a press conference where he pleaded with the public to report anyone engaging in such disruptive activities. Two weeks ago, five places were vandalised and copper wires stolen. Operational expenditure to restore services and estimated outbound revenue loss stood at N$700,000. "We are deeply worried by the deliberate and determined cycle of theft, vandalism and sabotage is creating an environment of a rapidly deteriorating service quality," said Ndoroma. The company has also proposed an amendment to Section 73 of the Information Communication Bill. "Telecom Namibia wants to see that a future Information Communication Act declaring the receipt/purchase of recovered copper from stolen cables a crime and introduces heavy penalties for the offenders," he said. According to Ndoroma, the copper wire theft does not only severely affect the delivery of sustainable information and communications technology services to customers but also damages other businesses. Telecom says it will offer N$20,000 to anyone who would leak information leading to the persecution of the perpetrators. Since January this year, thieves have stolen cables at 21 different places (towns) with the recent incidences reported two weeks ago in Windhoek. "In many high-theft areas, copper cables are repeatedly stolen, sometimes within days and sometimes hours, after replacements or repairs," said Ndoroma. In an effort to curb the problem, Telecom is rolling out wireless systems although the exercise is expensive. Ndoroma says, "Whoever is doing this knows where the cables are laid and how the cables run. We do not suspect it is theft only. It is more premeditated sabotage of telecommunication services." He also referred to the need for involving the scrap metal industry, which is said to be creating a market for the thieves. "We have to involve the scrap metal industry so that they stop buying stolen materials and call police when suspicious," said Ndoroma. Zamtel’s workers strike ends but company operating at a lossZamtel’s striking workers who have been demanding higher wages are drifting back to work after a three week strike. Communication and Transport Minister Dora Siliya said the company was unable to meet the wage demand because the company was loss-making. Zamtel public relations manager, Charles Kachikoti said that some workers had reported for work while others were "still away". Kachikoti said management expected that all the workers would report for duties last week so that the company could start operating at full capacity. National Union of Communication Workers (NUCW) general secretary, Clement Kasonde said in a separate interview that the workers had started reporting for duties, although not all of them were working. "Some of them are working. We resolved at the weekend that all workers should resume work on Monday and we hope that by tomorrow (last week) things will normalise," he said. Communication and Transport Minister, Dora Siliya on Monday called on all the workers to resume duties, as the strike was illegal. She said Zamtel had no capacity to increase salaries because it was operating at a loss. In Kitwe, the workers yesterday resumed work following stern warning from Siliya for them to call off the strike. Some workers were sent suspension letters and were not permitted to enter Zamtel premises by senior managers who mounted a road block at the gate together with the State police. NUCW branch chairperson for engineering Ebyshy Chinkoyo, who is one of those suspended, confirmed in Kitwe that the workers got back to their offices in the morning. "Yes, I can confirm that the workers are back in their offices but those that were served with suspension letters were turned back at the gate," Mr Chinkoyo said. But ZCTU acting secretary general, Ian Mkandawire said in a statement in Kitwe: "While the ZCTU appreciates the financial difficulties Zamtel is facing, threatening striking workers with dismissals is not the best way of resolving the impasse. (Source: The Times of Zambia) In brief:- In another month or so, Kenya’s fourth mobile service provider, Econet, will unveil its services, hoping to attract consumers to its network. The company has finally managed to reach deals with its competitors in what could be a landmark move for the industry on the infrastructure-sharing front. Through the deals, Econet will be able to combine its financial resources with existing infrastructure to quickly roll out a network in Nairobi and Mombasa when it launches its new mobile brand in a month’s time. - Tunisia’s daily, Le Quotidien, is reporting that the government will launch an international tender to award a fixed line telephone licence next year, as part of a drive to boost foreign investment and accelerate growth. As it stands, state-controlled Tunisie Telecom (TT) holds a monopoly on the provision of fixed line services. - Telecommunication services in oil-rich Equatorial Guinea are going from bad to worse, the government complains. Coverage is being limited, telephone calls suddenly are interrupted and other services offered by Guinea Ecuatorial de Telecomunicaciones (Getesa) are failing. According to official sources in the capital Malabo, Equatorial Guinea's Deputy Technology and Telecommunications Minister Carmelo Martín Modu earlier this week had a meeting with the leaders of the country's monopoly telecom provider Getesa. The Deputy Minister had called for the meeting to discuss "the poor quality and worsening service" the company is offering its customers. - Telecom Namibia looks set to be given a mobile licence but the quid pro quo is that the country’s mobile operators get their own international gateways. Telecoms, Rates, Offers and Coverage (briefs)- At the end of September Senegal was home to 5.01 million mobile users, thanks to the net addition of 289,000 new users in the third quarter, a cellular penetration rate of 47.35%. France Telecom unit Orange Senegal ended the period with 3.188 million customers, up from 3.042 million at 30 June, to lead Millicom International Cellular (MIC’s) local unit Sentel GSM (Tigo), with 1.822 million (up from 1.679 million). - South Africa’s mobile operator MTN and Research In Motion have announced that the BlackBerry Bold smartphone is now available from MTN dealers in South Africa. The smartphone supports tri-band HSDPA high-speed networks around the world and comes with integrated GPS and Wi-Fi, as well as a rich set of communications and multimedia capabilities. - Zimbabwe’s largest wireless operator by subscribers Econet Wireless has announced that, due to the shortcomings of its existing post-paid billing platform, it is migrating subscribers on its Business Partna contract package to a pre-paid platform, reports sundaymail.co.zw. Econet spokesman Ranga Mberi said Business Partna customers will be moved to the pre-paid system with effect from today (10 November). According to Mr Mberi, ‘This measure will be temporary, as the company is working to install a brand new, state of the art billing and customer relationship management [CRM] system.
NigCom-Sat is Faulty, Not Missing, Says Federal GovernmentNothing seems to go right for Africa’s aspiring satellite players. First, there were problems with Rascom and now NigComSat has been “parked up due to loss of energy.” Briefing State House Correspondents after the weekly Federal Executive Council (FEC) meeting chaired by President Umaru Musa Yar'Adua, in Abuja last week, the Minister of State for Science and Technology, Dr. Alhassan Zaku, said the satellite actually developed a technical fault that resulted in the inability of the operational batteries to be charged by the solar panels. ThisDay reported that the N40 billion satellite had developed technical problems and gone missing from the orbit. Zaku said the fault was detected by the Nigerian and Chinese engineers stationed in Abuja and China at about 4.00 am on Tuesday. He said although the manufacturer was contacted immediately, repairs could not be carried, hence the decision to park it in order not to cause damage to other satellites. The minister said if repairs could not be effected on the satellite, a new one would be built and launched, adding that the cost would be born by NigComSat's insurance company. Zaku assured customers of NigComSat that their loads would be migrated to another transponder at no extra cost. According to him, "At about 4am yesterday (Tuesday), our engineers who are manning the ground station here in Abuja, noticed that the satellite in the orbit was not being recharged. "Usually, this is suppose to happen via solar energy. Usually, when it is not being recharged, it losses energy very fast. So when they noticed, they quickly reported to the managing director. About the same time, the station in China, of course the satellite was built and launched in China, noticed and also called to communicate what they have noticed but assured that they were working to see what they could do. Immediately they summoned their engineers including the president of the company that built the satellite and they tried to see what they could do about the power being lost. "When they found that it was becoming a bit difficult for them to manage, they contacted us to ask what they should do since it is our own. At around 9am, I met with the MD and we looked at the options and decided that the best thing to do was to park it like you park a car. "Because if it is not parked there will be no energy left to move it but because there was still some energy left, we decided to move it aside and park it in a safe place. Because if it is not done, it will lose all the energy and become like a lose canon which will keep rolling about and hitting other satellites in orbit. And of course almost all satellites are carrying loads that are paid for and once you make that damage you are liable. So we decided that they should park it while repairs continue. "However, we have also told them that in the event that it cannot be repaired, our insurance companies have to replace it. It is insured, so it will be replaced. Either they give us another one which is already in orbit or they built another one. "Meanwhile, all the customers whose payload we are carrying have been assured that we will migrate whatever we are carrying for them - TV, radio - into another transponder so they need not fear at all. Of course they are not going to pay anything. The cost will be born by our own satellite because they paid for it and in fact the last amount they paid for it has not even be taken to the treasury, of course they pay in instalments quarterly. So the last money they paid has not even been banked yet. We are still trying to collect all, so we will just take that money and pay for another transponder for them to use now until ours is repaired or replaced." (Source: This Day) Telkom South Africa buys MWEBSouth African fixed line telephone group Telkom has agreed to buy all of MWEB Africa and a 75% stake in MWEB Namibia from Naspers for R610m, it was announced on Monday. These shareholdings will be acquired from Multichoice Africa Limited and MIH Holdings Limited respectively, which are members of the Naspers Limited Group. MWEB Africa is an Internet services provider in Sub-Saharan Africa (excluding South Africa) and also provides network access services in some countries. Although its operations are largely focused on corporate customers, MWEB Africa's predominantly satellite-based Internet access offerings allow the company to reach a wide range of customers, many of whom are not reached by traditional fixed-line infrastructures. The MWEB Africa group has operations in Namibia, Nigeria, Kenya, Tanzania, Uganda and Zimbabwe, an agency arrangement in Botswana and distributors in 26 Sub-Saharan African countries. The successful conclusion of the agreements being entered into is subject to conditions precedent, including regulatory approvals being obtained in certain African jurisdictions. The transaction forms part of Telkom's stated strategy of expanding into Africa through acquisitions of mobile companies and IT companies following the deal to sell part of its stake in Vodacom and spin off the rest to shareholders last week. South African media and entertainment firm Naspers is no longer selling its local Internet service provider Mweb South Africa. "Given economic conditions globally and the contraction in credit markets, shareholders are also advised that Naspers has terminated the auction process for the disposal of Mweb South Africa," it said in statement to the JSE. Difficulties in rolling out fibre network will be overcome, says Angolan OfficialThe minister of Telecommunication and Information Technologies, José Carvalho da Rocha last week stressed the importance of working with other state institutions to overcome the obstacles experienced by Angola Telecom in rolling out its national fibre network. Speaking to the press at the end of an assessment visit to Angola Telecom in Luanda, the Minister said he considered it essential to work in partnership with the Road Institute of Angola (INEA) and the National Inter-sectoral Commission of Demining and Humanitarian Assistance (CNIDAH), in order to solve the issues. According to José Carvalho da Rocha, the Ministry will study the most appropriate mechanisms to overcome the difficulties found on the routes where the optical fibre lines will be trenched. Some routes pass through uncleared mine fields that will need to be cleared before work can begin. (Source: Angola Press Agency) In brief:- Following the a cable cut on SAT3 in the middle of last month, Nitel says it has begun fixing the damaged cable. - In Rwanda, New Artel which recently benefited from government's Frw1.5b universal access fund to provide telecommunication services in rural areas has reported to have connected 94 Mbps of Internet bandwidth across 130 operating sites in rural areas. - Reports reach us that Mauritius’ Nomad is still experiencing QoS issues and that Mauritius Telecom is expected to roll-out an NGN network before too long.
Stones instead of PCs to collect Sierra Leone health dataA new health data system has been introduced to rural parts of Sierra Leone, where lack of electricity and widespread illiteracy has prevented authorities and UN agencies from collecting reliable data about infant mortality and other health indicators. The method: Counting stones. The euro 35 million project was initiated by the Department of Informatics at the University of Oslo, Norway, which has 14 years of experience of developing sophisticated health information systems for a number of countries in Africa. As a system was to be designed for Sierra Leone, however, the country's extremely poor infrastructure at first seemed an overwhelming challenge. Sierra Leone remains one of the world's poorest countries after having been ravaged by civil wars. While democratic institutions are in place and economic development is finally being notable, the country's infrastructure remains collapsed. There is no nationwide electric power grid, and most of the country has no electricity supply at all. The necessary power is supplied by diesel-driven generators. The war also interrupted education, leaving Sierra Leone with one of the world's highest illiteracy rates. Child mortality is high, and many mothers die in childbirth. And also the local traditional midwives, who are charged with registering these events, are often illiterate. Therefore, "registration is often chaotic, with many local adaptations. Collected information frequently overlaps. We intervene to standardise the systems so we can get comparable health data from all parts of the country," says Jørn Braa, Associate Professor at the Oslo Department of Informatics. Innovative solutions were therefore needed to improve data collection in rural Sierra Leone. The engineers worked out a simple system that required neither electricity nor literacy - by counting stones. In the municipality of Tombodu, in the eastern part of the country, the village-based traditional midwives register births, children who die immediately after birth, stillbirths and illness or death of the mother by placing small stones in a box with five compartments. Every month the box is taken to the health centre where the stones are counted and the resulting figures included in the health centre's monthly report to the district authorities. The data are entered into a regional database, which is part of the national system. "The point is to make a standardised system for collecting health data from all parts of the country. This will give local and national authorities, as well as the World Health Organisation (WHO) in Geneva an overview of the health situation and other data that will help them decide where to take remedial action," Braa explained. In order to provide vaccinations for rural children, authorities require statistics on local public health, such as the incidence of measles, tetanus, diphtheria and tuberculosis, the number of children, and the number of those who have already been vaccinated. Only then will it be possible to implement an effective vaccination programme. "Sometimes we see that only half the children in a particular region have been vaccinated. Without reliable figures it is impossible to assess the job, plan for improvements and draw up an appropriate budget," Braa pointed out. To date, in cooperation with several African universities, the Oslo Department of Informatics has established similar health information systems in a number of African countries – such as Zanzibar and Botswana. "Our goal is to produce a system that will survive political turmoil. In this context, the department has the role of bridge-builder in Africa," says Professor Morten Dæhlen, Head of the Department. The project is currently the fourth largest research project at the department. Euro 11.5 million have already been spent, some of which has been aid funding from the Norwegian development aid agency Norad. Over the next ten years, the department plans to spend more than euro 23 million on related projects in Africa, hoping to "contribute directly to the strengthening of the health information systems and health services more generally in Africa." All programming is done using open-source code. The software is free and available to everyone. "Using open-source code is a key point. However, the commercial actors are not very happy about us. They resent idealistic projects that encroach on their turf. We represent an annoying type of competition. They want to have the market to themselves," Professor Morten Dæhlen says. (Source: African Future) Be Computer Literate Or Forfeit Promotion , says Nigerian Head of Secondary School EducationFrom the next academic year all principals, their deputies and zonal directors of the Akwa Ibom state Secondary Education Board who cannot show evidence of being computer literate will forfeit his or her promotion. Giving the warning in Uyo, while addressing principals of public secondary schools and zonal directors, the executive chairman of the State Secondary School Education Board, Obong Ime Isine, stated that in a constantly shrinking world, the power of information and communication technology cannot be over-emphasized hence the need for all public schools administrators to use the computer. Obong Isine, who was accompanied by all the board members, permanent secretary as well as directors from the board headquarters, said that since the blind cannot lead the blind, it was imperative for principals and vice principals to be computer literate. "In fact, they have been given up to the end of this academic session to get used to computer otherwise they will lose their normal promotion". The SSEB boss, however, assured the principals that while the state government would continue to pursue the policy of providing computer for schools, the board will equally facilitate the provision of Lap Tops for them. (Source: Leadership) “Africa needs open source vernacular software”, says PHEAThe time had now come for Africa to produce open software in its major local languages to make ICT accessible to all. John Schoneboon, ICT project associate at the Partnership for Higher Education in Africa, said it would help push Africa forward on the information technology highway. "It is interesting that things are moving forward and it could be a good idea for Africa to have open source software in vernacular language," he told. The ICT specialist said such software would make e-learning a possibility in the continent. “Access to information plays a vital tool in the development agenda,” he noted alongside the ongoing sixth international open access conference being held in Lilongwe, Malawi. Schoneboom said the continent also lack the capacity to effectively roll out ICT services to all its communities. Monopoly is the main cause of Africa’s setback in Information and Communication Technology, he added. He said the biggest problem about monopoly would continue to exist if governments continue to exert strong regulatory restrictions on ICT service provider licenses. The Information and Communication Association of Malawi with support from the Open Society Initiative of Southern Africa (OSISA), Ubuntu Net and other local companies organized the conference which ends on Friday. (Source: Africa News) In Brief:- The National University of Rwanda (NUR) has signed a memorandum of understanding with the Rwanda Information and Technology Authority (RITA) to increase ICT access in rural areas. - A computer manufacturing company, Omatek Ventures Plcs in collaboration with the Lagos State Government and the Association of Senior Civil Servants of Nigeria (Lagos branch) have launched the computer for all public servants in the state under the company's e-Xpress initiative. The computer for all public servants is an initiative under the Omatek E-xpress scheme that provides a flexible computer acquisition and convenient payment plan for public servants in Lagos State. The launch also coincided with the Omatek EDU-Launch and unveiling of the Omatek 8 inch smartbook specially positioned for the education sector. - In Algeria, a new version of "Ousratic, a computer per household" initiative is under preparation, said Post and information and communication technologies (ICT) Minister Hamid Bessalah. The Minister reckons that "We are thinking of how to set the new version of 'Ousratic, the previous method brought outcomes but we must do better."
Safaricom shrugs off price war in Kenya to grow half year profitsKenya’s most profitable company Safaricom last week released its first financial results since listing showing a widening subscriber base and increased sales but an earnings growth that had barely survived a vicious pricing competition in the market. The mobile phone company was counting on data and value added services to earn more from each customer in future, said the chief executive, Michael Joseph, as he revealed that the company’s half-year pre-tax earnings grew by just two per cent — amounting to a significant decline in real terms. Joseph said other efforts to shore up Safaricom’s income will include launching new products, establishing more retail outlets, cutting operational costs and expanding into the rural areas. The announcement of the half-year results saw the company’s share price drop by 9.30 per cent to an average of Sh3.90 at the Nairobi bourse. The results showed that the ARPU had dropped by 24.3 per cent to Sh503 and pre-tax profits had increased by 2.2 per cent to Sh8.9 billion. These disappointments came despite the group achieving a 20.4 per cent increase in sales and adding four million subscribers to its numbers. Expectations of an improved half-year performance had triggered a mini-rally of the share at the stock market, raising the price by about 39 per cent in one week. However, Joseph said the company would not be pushed into making knee-jerk reactions to each of its competitors’ moves, adding that Safaricom had to strike a fine balance between maintaining growth of its bottom line and reducing call charges to lock in and win new subscribers. “We will not strive to match every of our competitors’ moves. The temptation is to go out and compete but we have to take care of our bottom line,” he said. Analysts at African Alliance Investment Bank said the results did not match the general investor expectations, and hence the nosedive in the share price. “The results were below investors’ expectations and show that there is little chance that company will exceed last year’s earnings per share of 35 cents,” said researchers at African Alliance. The comparative pre-tax profit figure of Sh8.9 billion excluded two large “one-off” gains in the comparative period between March and September last year, which when included show a 14.8 per cent drop in Safaricom’s pre-tax profits. The two “one-off” items include interest charges receivable from Telkom Kenya amounting to Sh1.2 billion and an unrealised foreign currency gain of Sh553 million arising from a revaluation of a dollar denominated loan advanced to Safaricom by its foreign shareholder, Vodafone. The company’s after-tax profits also dropped by a similar margin to Sh6.2 billion from Sh7.2 billion in the first half of last year. Safaricom’s chief investor relations officer and former company chief financial officer, Mr Les Baillie, defended the decision to exclude the two items from this year’s comparative profit figures. “The CMA regulations dictate that we must report our financial numbers in accordance with International Accounting Standards. Accordingly the notice that will appear in tomorrow’s papers will show a decline in post tax profit of 14.7 per cent,” he said. “From an investor perspective it is important for us to point out the two large one-off gains in the previous half year,” said Baillie. Joseph attributed the drop in average revenue per user (ARPU) from Sh665 to Sh503 to high inflation that had eaten into subscribers spending power and ongoing recruitment of mainly rural subscribers with relatively lower disposable income. Subscriber numbers have risen from 7.9m to 11.9m “It reflects the marginal effect of additional subscribers with lower spending profiles as the network is rolled out to rural areas,” said Joseph. During the period under review, SMS and data revenues increased by 76.1 per cent in the six months to Sh3.7 billion, while revenues from call charges went up by 17.1 per cent to Sh29.7 billion. The subscriber base increased by 50.3 per cent in the half year period to just under 12 million subscribers, giving Safaricom a strong market leadership with 81 per cent of the total subscriber base. Total revenues increased by 20.4 per cent to Sh34.5 billion, driving up the earnings before interest, taxes, depreciation and amortisation (ebitda) by 15.6 per cent to Sh15 billion. “The top line growth we have reported has been quite exceptional, bearing in mind that any percentage increase is based upon a very large starting number, in this case the Sh28.65 billion turnover in the previous first half,” said Baillie. (Source: Business Daily) Telecom Egypt says net income up 35% year-on-yearTelecom Egypt has announced its consolidated financial results for the full year ending 31 December, 2007. Commenting on the company’s results for the full year 2007, Akil Beshir, Chairman and CEO of Telecom Egypt, said: "As a company, we are very proud of our continued profitability, and the ability to increase profits in a changing market should not be underestimated. Our EBITDA margin remains robust and within management expectations in the low to mid fifties. In 2007, our Net Profit after Tax reached EGP 2.5 billion an increase of 4.4% compared to 2006, largely driven by the growth we have seen in internet and data and wholesale revenues. Ensuring profitability is sustained remains a key priority for TE and we remain committed to keeping a close eye on costs. “2007 was a year of focused growth in our subscriber base. The fourth quarter was particularly strong in terms of net additions, resulting from the market’s positive response to our promotional activities. In addition, our Internet and data services subsidiary – TE Data – now has a market share of 52 percent and an ADSL subscriber base of over 220 thousand subscribers. Simultaneously we have benefited from our stake in Vodafone Egypt, which contributed over one billion Egyptian Pounds to group bottom line throughout 2007. “Meanwhile, our revenue mix has continued to evolve with wholesale revenues now accounting for 35% of total sales, while retail revenues account for the remaining 65%. The growth in wholesale revenues was 22% year-on-year with the main driver for this double digit growth is the increase in demand for our infrastructure by other operators in the domestic market. We continue to see our extensive infrastructure as our key asset and we intend to capitalize on it to capture the growing demand for telecommunication services in the domestic market. “An important part of driving future revenues is looking for new opportunities and initiatives, such as our submarine cable project, TE North, which is due for completion in the second half of 2009. Taking advantage of the boom in Internet traffic from Asia to Europe and vice versa, this submarine cable capitalizes on our existing national infrastructure and will enable Telecom Egypt to generate further wholesale revenues by selling capacity to other operators. We have already signed agreements with three companies, totaling USD 126 million, and we expect to announce more throughout 2008.” South Africa’s Didata Profit Beats Market EstimatesStrategies to survive the continuing economic turmoil have been spelled out by Dimension Data (Didata) as the technology company admits it is bound to suffer as its customers reel from the financial crisis. Didata has survived tough times of its own creation in the past, when its over-exuberant growth backfired. Now its managers had the experience to cope with the crisis, CEO Brett Dawson said last week:"Our intention is to emerge stronger and more competitive once the world clears this economic downturn," he said. Dawson presented positive results for the year to September last week, showing revenue up 19.5% from $3,7bn to $4,5bn, and operating profit up 39% from $123m to $182m. The operating margin inched up from 3.5% to 4%, on track for a goal of 5% by 2011. Earnings per share touched $0,077 and it declared a dividend of $0.017. The figures beat market expectations as analysts had forecast 18% revenue growth to $4,46bn and operating profits of $178m. Didata's results have strengthened steadily every period since a comprehensive turnaround strategy was implemented a few years ago. Dawson said he was "absolutely delighted" with the results, but that there was always room for improvement. The company operates in a variety of IT areas, and IT services rather than simply selling equipment now accounts for almost 80% of its business. Dawson refused to give any clear guidance for the months ahead, saying he was being deliberately evasive. "We are not immune to the current conditions. Of course we will be affected to some degree," he said. "Our business has become more robust over the last few years. We are stronger and better positioned to fight and to win." The company was watching its order pipeline and running costs very carefully, but was still investing heavily to grow its services in some very attractive markets such as video conferencing and network security. If a division was not doing well it would adopt more conservative spending, followed by a performance improvement plan to help match the dollars it was generating to the dollars it should be achieving. "We will be adjusting our cost base wherever its required," Dawson said. Overall, Didata would continue its geographic expansion, improve operating efficiencies, invest in staff to keep attrition rates low, and chase the most appropriate opportunities. (Source: Business Day) Tunisian Start-Up Signs Five Billion Dollar Contract in MadagascarAccording to the daily Le Quotidien, BFI, a Tunisian start- up, specialized in computer solutions for the banking sector, has recently signed a 5 billion dollar contract with the Madagascan government. The contract which involves the setting up of software applications for Madagascan banks, will allow the Tunisian start-up to consolidate its position on the African market, as well as reinforcing its competitiveness in terms of banking and financial solutions. The project will enable Madagascan banks to exchange compensation values electronically and securely, thus gaining significant time insofar as the exchange of inter bank data is concerned. Created in 1994, BFI is a leader in Tunisia in terms of exporting services to Europe and Africa. This success, writes Le Quotidien, has enabled the company to receive several international distinctions, including the latest, by the Geneva International Institute of Promotion and Prestige. Some 72 banks throughout the world are currently using BFI's software applications. The company also has offices in Paris, Algiers, Madrid and Casablanca. (Source: Tunisia Online) In brief:- Vodafone Group has announced that its ZAR25 billion (USD2.5 billion) offer to acquire another 15% stake in South African cellular operator Vodacom from Telkom South Africa has been accepted. The deal will raise Vodafone’s stake in Vodacom from 50% to 65%. Telkom is looking to offload its remaining 35% interest in Vodacom to Telkom shareholders. - Foreign investors in ICT sector will now take three years after launch of business to source for local partners. Previously, foreigners were required to have local investors on board before they were issued with a licence. The Government's move is aimed at attracting foreign investments in the fast-growing ICT sector seen as critical to Kenya's economy. - Telecoms infrastructure and support systems supply group Africa Cellular Towers posted a 32% increase in headline earnings per share for the six months to August as it continued to benefit from strong demand in the buoyant African cellular market. Revenue increased 35% to R239m from R177m, and gross profit jumped 56% to R89m due to efforts by the company to move to "supply-only" contracts where higher margins are earned. - Lawyers for South Africa’s technology group Altech have won the right to grill MTN on its planned R1.4bn acquisition of Verizon, setting the stage for ferocious questioning at the Competition Tribunal. - Egypt's outsourcing sector is getting a boost of international recognition. The country was recently awarded the prize for best outsourcing destination by the British National Outsourcing Association (NOA). This comes as much needed encouragement, with the government trying to attract more investment to the sector at a time of international economic gloom. - South Africa’s largest cellular operator in terms of subscribers, Vodacom, has seen earnings climb 12.5% in the first half of its fiscal year on the back of subscriber growth. Operating profit for the six months to the end of September reached ZAR6.4 billion (USD635 million), while sales for the period were up 14% year-on-year at ZAR26 billion. The firm said customer numbers were up 13.1% to 35.7 million. - Indian telecom firm Bharat Sanchar Nigam (BSNL) is planning to bid for licenses in Africa, chairman and managing director Kuldeep Goyal announced last week. "We are looking to expand beyond India. We are currently looking at Africa and West Asia, where telecom penetration is relatively low," he said.
Website to Bring Expertise Into South Africa’s ClassesThe Shuttleworth Foundation and Connexions from Rice University, in the US, yesterday announced plans to jointly develop what they say will be one of the world's largest, most comprehensive sets of free online teaching materials for primary and secondary schoolchildren. These will, however, benefit only a few because 67.93% of SA's public schools did not have computers for teaching and learning purposes at the time of the last national assessment of school resources, published by the education department in September last year. Using their open-education projects, Connexions and the Shuttleworth's Siyavula project would work to help education in South African schools with an initiative based on open-source software, online teacher communities and open copyright licenc es, said Siyavula project manager Mark Horner. The offering was a comprehensive repository of educational resources, everything from online textbooks to classroom activities, experiments and training materials. "Connexions and Siyavula will work together to create the repository, and Siyavula will create an online community of educators in SA that will expand, update and use the lessons," said the foundation's Karien Bezuidenhout. "The newly created content will reside in the Connexions repository, one of the largest open-education resources repositories," she said. Horner said that while it was "sad" that so many South African schools did not have computers for teaching and learning, there were stories, worldwide, of schools that had been provided with excellent resources but did not use them properly. The new project had the advantage of being aimed at the teacher instead of the pupil, Horner said. The website could act as a tool for sharing teaching resources, and was not just a place to download them. Teachers can opt to make the resources they share available to various groups, or completely open. The site could track each teacher's edits, saving multiple versions of a resource, so teachers would be able to adapt each available resource to their own particular needs, Horner said. The website was also designed to set each version up properly for printing, automatically providing a table of contents, pagination and other similar features, he said. Because the resources available would be royalty-free, it was possible for a teacher to print 10,000 copies of a black-and-white textbook, with a colour cover and thread-binding, for about R20 a copy, significantly reducing the cost of textbooks, Horner said. "You can also adapt it next year and print a new copy, ... so textbooks can be more dynamic." Because of all this, the technology that the foundation and university were offering SA's pupils was "a better starting point than filling a school with the latest and greatest technology ... If you are just becoming computer literate, how can you produce an effective, multi media learning resource?" Horner asked. Ultimately, the group hoped to offer a complete suite of teaching materials from grade R to 12, online and free of charge. (Source: Business Day) Two Websites Victims of Hacking Attacks in TunisiaThe independent electronic publication Tunisnews ( http://www.tunisnews.net ) has announced that its site was the target of a hacking attack on 5 November 2008, and that the administrators of the site have succeeded in overcoming the attack. The Tunisnews site was the target of a similar act of hacking last April, which rendered it inaccessible for several days. Also on 5 November, the site of the opposition Progressive Democratic Party ( Parti Démocratique Progressiste, PDP - http://www.pdpinfo.org ) was the target of an act of sabotage that completely destroyed its archives. The images illustrating the articles were replaced with the skull of a pirate. It is the fourth time this year that the PDP's site has been the object of such an attack. This past October, the online webzine "Kalima" ( http://www.kalimatunisie.com ) was also attacked and its content completely destroyed. The site of opposition activist Moncef Marzouki ( http://www.moncefmarzouki.net ) was also hacked. Ongoing acts of filtering and destruction of email boxes of journalists and human rights activists have intensified over the past months, particularly targeting users of Yahoo mail. As well, a number of blogs have been censored. The Observatory for the Freedom of Press, Publishing and Creation in Tunisia (OLPEC) notes that these acts of Internet hacking coincide with remarks made by the prime minister in a 3 November speech marking the opening of the annual symposium of the ruling Constitutional Democratic Rally (Rassemblement Constitutionnel Démocratique, RCD). In his statements, the head of state called for the consolidation of control and censorship of the Internet in the name of "protecting the democratic process, political stability and the fight against terrorism." OLPEC denounces these attacks on free expression and believes the main beneficiary of these types of attacks to be the Tunisian regime, which persists in its desire to gag all free voices. OLPEC expresses its solidarity with the administrators of the two sites and urges them to continue their mission of informing the public about all issues that may inconvenience the regime. (Source: International Freedom of Expression Exchange Clearing House)
People- South Africa’s Huge Group has conducted a major restructuring of its board of directors, in order to streamline management functions and operations. Current CEO Anton Potgieter has been appointed executive chairman, and hands over the reins to current financial director James Herbst. In turn, Potgieter takes over from previous non-executive chairman Chief Lediga. - David Venn, who formerly headed up Celtel (now Zain) in Zambia has started work as the CEO of Ghana Telecom. Events* South Africa, communications services and 2010 - e-readiness or e-rockiness?’ 17 November 2008, Classroom F, Mwalimu House, School of Public and Development Management, 2 St David’s Place, Parktown, South Africa The LINK Centre, Graduate School of Public Policy & Management, Wits University, and the Joburg Centre for Software Engineering cordially invite you to a free public seminar by Will Hahn, Gartner Principal Analyst, Carrier Operations and Strategies Worldwide, who has been tracking the South African ICT sector for many years. For RSVP: lauren.aca2k@gmail.com (preferably) (or 084-582-0422) * CUSTOMER SERVICE & CONTACT CENTRE 19 – 20 November 2008, Nairobi, Kenya For further information visit www.aitecafrica.com * THE MOZAMBIQUE ICT CONVENTION 2008 15-16 November 2008, Maputo, Mozambique The Mozambique ICT Exhibition has been initiated by the Ministry of Science & Technology to provide an educational platform for all government ministries, departments and organisations, as well as all major private sector enterprises and SMEs. They will meet together over two days to share knowledge, learn form local and international experts and network with each other in both the conference and the exhibition. For further information contact AITEC Africa, +44(0)1480-880774; info@aitecafrica.com * ngNOG 16 – 26 November 2008, Lagos, Nigeria For further information on the 3rd Edition of the Nigerian Network Operators Group Workshops and Meetings, visit http://www.forum.org.ng/ * AFRINIC 9 22 – 28 November 2008, Addis Ababa, Ethiopia For further information on the 9th AfriNIC Open Policy Meeting, visit http://www.afrinic.net/ * TELECOMS COST ALLOCATION AND PROFITABILITY ANALYSIS CONFERENCE 1st – 5th December 2008 Hesperia Hotel, London - UK Over the five day conference delegates will learn & develop techniques to over come the latest developments in European regulatory and management accounting, address vital issues such as NGNs, IP-interconnection, regulatory evolution, convergent services, customer profitability analysis and cost control functions. Learning through a wide range of different formats you will learn how to increase your understanding and benchmark activities through; keynotes, panels, roundtables, workshops, seminars, interviews and open discussion. The formats are tailored to the subject and change the pace each day, helping you to maintain concentration and boost memory of the event. For further information visit www.iir-conferences.com/costprof Jobs and Opportunities* Support to Enhance the Competitiveness of Kenya’s Business Process Outsourcing (BPO) Sector The Kenya ICT Board has requested the Commonwealth Secretariat for assistance to develop a capacity development strategy for the country’s Business Process Outsourcing (BPO) sector. The request follows an assessment of Kenya’s professional services sector, which identified BPO as one of the services with potential for growth. Kenya’s Vision 2030 aims to transform the country into “a newly-industrialising, middle income country providing a high quality of life to all its citizens in a clean and secure environment”. Vision 2030 further outlines the challenges to be overcome if this vision is to be realized, including the need to improve basic infrastructure, a poor incentive framework and the limited talent pool and supplier base. The vision for the BPO sector in Kenya is to become one of the top 3 BPO destinations in Africa. The application deadline is 21st November 2008 For further information visit http://www.thecommonwealth.org/job/184713/x_ken_055.htm Contracts* Orascom Telecom and Nokia Siemens Networks - Algeria Orascom Telecom Algeria has contracted Nokia Siemens Networks (NSN) to provide its Home Location Register (HLR) subscriber data management solution, allowing Orascom to develop a single database for subscriber information. Orascom says the new system will enable it to move towards smart, subscriber-centric operations, which will reduce time-to-market for service deployment.
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