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WEEKLY PUBLICATION DEADLINE: 12 pm GMT Sunday. ISSUE NO 436 9th January 2009 The Year of Living Dangerously – how to survive in a low growth worldWhilst Africa has as yet been largely untouched by the apocalyptic financial meltdown, everything is now connected. So less sales of Chinese clothes and shoes in developed countries (witness the awful Christmas retail figures) means lower raw material and food sales from Africa. At the very least some of the air is going to come out the market for African operators and the “worst-case” scenarios look pretty grim. Russell Southwood looks at what operators can do to keep business flowing. For Africa, the global economy is a bit like a dinosaur: it takes a long time for messages to get from the head to the tail. So the consequences of the shrinking developing economies have not yet really reached African shores. But there’s doubt that they will in the coming year. The news will be very mixed: whilst exports may be down so are some costs like energy. Currency re-adjustments as the dollar strengthens will feed through into higher levels of inflation. But beyond these macro economic factors, at the “sharp end of the pencil”, all operators – Internet or mobile – could face a drop in revenues between 10-20%. Obviously this pain will not be evenly distributed but there’s no reason to suppose that anyone is especially exempt. So the first question is: do you have a plan B that can deal with a drop in revenue of this sort of magnitude? Although the market is very price sensitive, African operators have become very used to selling at relatively high prices and often at a fairly low level of quality. There’s been such a thirst for communication that much has been forgiven by consumers. However as the market develops they are becoming both more knowledgeable and discerning. Pressure on finances will make them more rather than less demanding. So what can you do to stay upright as the going gets tougher? Finding the bottom of price trough – More competition brings lower prices. The only mitigating factors are coverage and quality. Everyone knows the theory of price elasticity. The lower the price, the higher the number of users and the higher the volume of use. What is much harder to predict is the point at which the number of users no longer produce sufficient additional income to justify dropping prices. Balancing Act has a price elasticity methodology which will allow you to look at where this point lies and to plan your commercial strategy around that knowledge. If you don’t know where the bottom of the price trough is, it’s a bit like crossing a busy road with your eyes closed. Africa’s mobile operators have made tactical pricing offers a central part of their marketing strategy without always understanding where it leads. As some will admit privately, they are making it up as they go along and this results in (to mis-paraphrase the mafia don in The Godfather) “making you an offer you can’t understand”. There will always be niches that require tactical offers. But why not make “price promises” that are comprehensible (and put your competitors at a disadvantage) in a more central position in the market? Straightforwardness with your consumers will become a central brand value. Getting them to love you more – A very small number of subscribers produce a large part of your income. Whereas loyalty schemes started to appear when markets got saturated, there is now a very good argument that it makes better sense to trade some of your external marketing costs for “below-the-line” spending on high-revenue customers, whether pre-paid or post-paid. These customers should feel special but there’s not much sign that operators are going the extra mile for them. In too many countries operators “brand value” does little to make users make an emotional commitment: usually it’s a cynical shrug of there being “nothing better” or a pragmatic “least worst” choice. Competitive African markets have high levels of churn and occasional users stop paying or downsize when other payments – like school fees – have to be made. Operators need to be able to even out the up and downs and ensure that users have enough confidence to continue spending on communications on a regular basis. Selling multiple SIMs to single users may produce a comforting bump in your subscriber figures when you present them to the outside world (suitably time extended to create the biggest number). But this parallel universe makes a mockery of ARPU figures and margins within your business. Of course, the carrot is that the entry barrier needs to be as low as possible but take them out of the reckoning for ARPU calculations. Changing old assumptions – Mobile operators used to be resigned to having low volumes of international minutes because the premium for mobility meant that rates were always too high to compete with fixed lines or VoIP in the grey market. Over the last 18 months there has not only been a fall in international rates in most competitive markets but as a result, there has also been a convergence between fixed and mobile international rates. Schemes for international roaming at local rates have simply reinforced this trend. Mobile operators now have the opportunity to create a pricing structure that will take away most international business going to the large-volume countries like France, the UK and the USA. Other diaspora routings offer similar but smaller opportunities. Fixed operators will need to box very clever to retain any ability to control the market and to keep their price advantage. Not tied to anything – Africa’s urban areas in key markets are increasing covered by data as well as voice wireless networks. Wi-Fi networks are popping up everywhere. Out of the estimated 150 WiMAX implementations worldwide, 100 are in Africa. 2008 was the year of touch screen smart phones with the iPhone, the Blackberry Storm and Nokia’s more staid contribution the 5800. Each of these phones allows its user to access VoIP calling through a variety of client softwares, the most prominent of which is Skype. Now’s the time to start thinking about how to actually turn this potential revenue hole into something by embracing a VoIP future. Start creating cost and price plans that as a mobile operator allow you to retain revenue and as an insurgent challenger ISP allow you to compete with the new vertical integrators. But defending revenues is only half of the game and probably not the important half. The other part is driving down costs: The costs of being vertically integrated – Africa’s mobile operators have been expanding their areas of operation and have had considerable success at getting mobile data subscribers. Some are even getting ready to offer DSL as part of a “we do everything” strategy. However, if the take-up figures in the advanced markets are anything to go by, there will be a morning after cost hangover. Take up rates of 8-12% in Europe are leading to reductions in EBITDA margins of 1.5-3%. African take-up rates are much lower but the costs of provisioning for decent data services alongside voice may well impact the bottom line in the same sort of range. Hence the popularity of WiMAX in Africa but which is much less loved in other parts of the world. You either have to provision separate data networks for high-intensity use areas and/or look at combining you fixed and mobile offerings (see LINKdotNET story in Internet News). But whenever you think you’ve made the decisive last move, there’s always one more person who shows up. Who would have thought that Fibre-To-The-Home would be offered in Lagos? (Again see story in Internet News below). Whether or not it’s successful, it provides yet another thing that will take the jewels out of the high revenue customers’ disposable income. Once present, it won’t cease to be present. The transition to IP backbone – High national backbone rates across Africa make it between 30-50% cheaper in most countries to build your own backbone. The same is also often true at the local loop level but these cost-savings are less accessible for operators, particularly in less competitive markets. If fixed operators behaved with any commercial logic, they would lower their prices to defend their positions but they are largely caught in the political headlights with large workforces to support: this uncomfortable position does not make them commercially decisive. Mobile operators have tentatively begun to discuss sharing infrastructure and although the discussion is complicated, it have significant advantages if capital is hard to find. Likewise sharing towers in more commercially marginal areas has to make sense: if the business becomes too good for one tower, you can always break out again. An overlooked opportunity are inter-country connections. For example, over the next two years Nigeria’s banks will have expanded to a wide range of countries, not all will be connected by marine fibre. These new trans-national African businesses will be the foundation for the next ramp-up of corporate business. Scaling your overheads – Because mobile operators have so much smaller staffs than the historic incumbents doesn’t mean they can’t adjust staffing costs. Outsourcing key functions like network operations and maintenance has to be attractive as a way of both cutting and stabilising cost expectations. There are a number of different companies – some are equipment vendors and others are not – who will increasingly offer this kind of service, taking on the costs and difficulties of finding effective staff. One of the biggest costs is supply diesel fuel to base stations. You may breathe a sigh of relief that oil prices have sunk from their previous highs but don’t go to sleep yet. It used to be said of Northern Ireland’s politicians that when it rained they couldn’t fix the roof and when it didn’t, they did nothing about it. You do not want to be in the same position in terms of dealing with energy issues. There are a number of products coming on the market that are both greener and more-cost-effective better to work out which works well now than when oil prices go back up. Greener? There are those that say this is not a word in the African dictionary but they could be wrong. Lagos residents in one area of the city disconnected a mast in protest at it being sited in the middle of a residential area and there is a consumer group in Cote d’Ivoire protesting about the impact of microwaves on those living nearby. You have been warned and this simply reinforces the need to look at energy issues and sensible sharing of towers even in urban areas. Those who prepare themselves well in the hard times of 2009 and maybe 2010 will be the ones who continue to make decent margins as better growth re-asserts itself. Will you be one of them?
Millicom Awarded Third National License in RwandaMillicom International Cellular, the Luxembourg based telecommunications group has been awarded a licence in Rwanda as the third national telecoms operator, a top government official has revealed last week. Romain Murenzi, Minister in President's Office in charge of Information, Communication and Technology (ICT) revealed last week that the company was awarded the licence in December 2008 during the last cabinet meeting. He further said, "The ministerial decree was based on the background paperwork provided by Rwanda Utility Regulatory Authority (RURA) approved by the ICT Ministry." Without going into detail, Murenzi explained that the licence was awarded upon payment of US$60 million licence fee which was to be operational over 15 years. He also disclosed that the company's operations are expected soon after rolling out the necessary infrastructure, adding, "Millicom is a promising telecom firm based upon its technical proposal submitted during the international bidding which commenced prior to the issuance of the licence." The firm beat competition from Telecel Globe, Zain and Larrycom-Expresso. Millicom entered into a joint venture partnership with Marathon Corporation in a 87.5-12.5 percent equity arrangement. Marathon Corporation is an established local company with numerous business interests in Rwanda. Millicom is a brand already operating in 16 countries of Africa, Asia and America, has promised to offer affordable rates and other value for money services. The entry of a third operator after Rwandatel and MTN-Rwandacell should help lower prices and increase coverage. The current penetration rate is estimated to be about 11 percent. Source: The New Times (Kigali) Tunisia Launches an International Call for Tenders for Third Fixed and Mobile Telecommunications LicenseThe Ministry of Communication Technologies has officially launched an international call for tenders for bidders to obtain a second and third generation fixed and mobile telecommunications license. The license is "technologically neutral and open in terms of services and choice of infrastructure", says the call. The tender specifies eligibility conditions: "Only telecommunication operators with their own infrastructure and with a two year experience, and at least one operating license in fixed or mobile telephone lines or of a license including satellite data transmission services used in Tunisia, are entitled to submit an offer alone or together with other investors". The deadline for bidders is May 5, 2009, 5 pm local time, says the statement. There are currently two telephone providers in Tunisia, one is 'Tunisie Telecom' the historical state owned operator with a 35% stake held by Dubai's "Tecom" and the second is 'Tunisiana', a joint venture of Kuwait's 'Watanya' and Egypt's 'Orascom', which was awarded a mobile license in 2002. Recent figures show that 9 million Tunisians (out of a population of 10. 2 million) have a mobile phone license. Source: Tunisia Online (Tunis) Globalstar launches satellite phone service in Nigeria with investment from Yakubu GowonSatellite phone provider Globalstar is opening a local operation in Nigeria to be called GlobalTouch with US$10 million investment from a Nigerian former Head of State, General yakubu Gowon. The satellite gateway for the service will be located in Kaduna and the operation will be run by a former Nitel Executive Director. It says it wants to reduce the currently high costs of mobile satellite telephony and that it will be operational by April 2009. Globalstar has a 30% stake in the project. The Managing Director of Globaltouch, Engr. Isaiah Abdullahi Mohammed told the local press that as a direct satellite communication service it is capable of covering areas not reached by GSM services providers. Besides clarity of voices and ability to operate everywhere, the managing director said that Nigerians could have access to a tracking technology where "customers could use satellite modems and integrated back office management solutions to track mobile assets, such as aircraft, vehicle trailers, cargo containers and maritime assets. Globaltouch’s coverage will include strategic Nigerian telecoms market, the surrounding portions of western Africa, as well as parts of the coastal Atlantic and GWF of Guineas marine region. On the board of Globaltouch is former Head of State, General Yakubu Gowon who is the chairman, Chief Ebenezer Folorunsho Oke who was a former President of Institute of Chartered Accountants of Nigeria (ICAN) is the Vice Chairman. Other directors of the company are Alhaji MD Yusuf, former Inspector General of Police, Manasseh Zorto and Barrister Dan Habu, among others. Globaltouch was granted license by the Nigerian Communications Commission in January 2004 to offer Global Mobile Personal Communication (GMPCS) network service in Nigeria via satellite. Meanwhile works is in progress at the project site of the gateway located in Kaduna industrial area. Source: Daily Trust (Abuja) M-money service launched in CameroonMobile Money (www.mobilemoneysa.com) has launched a mobile payment plarform in Cameroon that will allow mobile phone customers to transfer money and pay bills. The product was launched in December at the Promote 2008 exhibition in Yaounde by Express Union, an existing money transfer operator in Central Africa. Mobile Money is delivered through a network of partners including micro-finance institutions, companies that provide cash for fund transfers and other physical outlets. These outlets have an electronic payment terminal that communicates in real time with a central server. The service joins those already operated by Safaricom in Kenya and Tanzania (M-Pesa), Zantel in Tanzania (Z-Pesa) and Orange in Cote d’Ivoire (Orange Money). In brief:- Reuters reported that the Egyptian government is set to delay the offer of a second tranche of shares in fixed line monopoly operator Telecom Egypt. It had originally suggested it would offer shares in the telco during 2009, but it now looks likely to postpone the offer. Tarek Kamel, Minister of Communications and Information Technology, was quoted as saying, ‘There were plans that the government would offer an additional tranche of Telecom Egypt on the stock market...we were planning for this to happen in 2009, but all indications confirm that we will postpone this offering.’ An initial public offering (IPO) of 20% in the operator took place in December 2005 and raised EGP5.13 billion (USD930.3 million). Ethiopian Telecom Corporation (ETC), Ethiopia’s monopoly operator, has announced that it has launched 3G services in the city of Addis Ababa. The operator will offer commercial pre-paid services over a W-CDMA network, offering speeds of up to 384kbps. The network infrastructure will initially be limited to 49 regions of the city, but coverage is expected to grow, although the operator has not announced any specific details of its expansion plans. ETC has also noted that it will launch multimedia messaging services (MMS) and a voice mail service in the near future. - In South Africa Vodacom has extended its 3G HSDPA coverage beyond the major metropolitan centres. In December Jongensfontein, Franskraalstrand, Citrusdal and Saronsberg were added to its network. Lamberts Bay and Veldrif will receive coverage in January.Vodacom’s 3G HSDPA network in the Western and Northern Cape now covers: Laingville, Stompneusbaai, Club Mykonos, Piketberg, Morreesburg, Darling, Yzerfontein, Grabouw, Villiersdorp, Robertson, Scarborough, Rooi Els, Betty's Bay, Kleinmond, Gansbaai, Bredasdorp, L'Agulhas, Struisbaai, Riversdale, Stilbaai, Prince Albert, Jongensfontein, Franskraalstrand, Citrusdal and Saronsberg. - The Nigerian federal government has handed over the management of the first phase of rural telephony project to five private telecommunication operators (PTOs) at the cost of $266.3m. The companies include Key Communications Limited, Suburban Broadband Limited, Voicewares Network Limited, Gicell Wireless Limited and Hezonic Limited. The five companies emerged after a transparent and competitive bidding process that involved 54 telecommunications firms. Key Communications Limited bid $38m to manage Ibadan zone, Suburban Broadband Limited bid $140.5m to manage FCT, Enugu and Kaduna zones, while Voiceware Networks Limited will pay $30 to manage Enugu zone also. Hezonic Limited and Gicell Wireless Limited bid $30m and $20m to manage Enugu and Bauchi zones respectively.
Nigeria’s 21st Century Technologies rolls out Sub-Saharan Africa’s first FTTH network21st Century Technologies looks set to lay claim to being the first Sub-Saharan operator to roll out a Fibre-To-The-Home (FTTH) network. It plans to target 10,000 homes in the capital Lagos and has chosen Ericsson as the equipment vendor to deploy the network. The company has ambitious plans to become a Triple Play operator. The contract includes the latest GPON Fiber-To-The-Home (FTTH) and will provide high-quality broadband connectivity and support services such as IPTV, high-speed internet access, and voice-over-IP. Deployment to the first 10,000 homes will start this month. The vendor is claiming that it will be able to deliver speeds of between 100 mbps and 1 gbps. No operator in the market is currently offering speeds of this kind. This technology supports a complete open business model in which consumers can choose any service supplier. In 2007, Ericsson's offering in the areas of fixed broadband access and converged networks was significantly strengthened by the acquisition on Entrisphere, adding a market-leading GPON platform as a complement to our fiber P2P solutions. Expressing excitement at the development, Managing Director of 21st Century Technologies, Wale Ajisebutu, said "we are delighted to work with Ericsson to deploy and integrate one of the world's most sophisticated network architectures for fiber optics. With the combination of Ericsson's GPON (Gigabit-capable Passive Optical Network) and IMS (IP Multimedia Subsystem) technology, we can deliver an enriched multimedia experience to our customers." Under the agreement Ericsson will provide an end-to-end Deep-Fiber Access network with EDA 1500 for GPON access and fiber cables, including Ribbonet and Micronet air-blown fiber systems. The contract also includes Redback SmartEdge 1200 routers and Ericsson's IMS solution for the core network, enabling seamless access to a wide range of multimedia services. Ericsson will also be responsible for network design, deployment and systems integration services. Egypt’s Orasom considers merging LINKdotNET and MobiNil, buying other companies or sellingArab Finance is reporting that broadband operator LINKdotNET is considering selling a majority stake to MobiNil, or alternatively merging with other companies operating in the Internet sector. Both LINKdotNET and MobiNil are subsidiaries of Egypt-based telecoms group Orascom Telecom, although both have separate management teams. Previous reports in November 2008 indicated that, if merged, the two operators could integrate, with MobiNil offering mobile internet services while LINKdotNET would continue as a fixed line internet provider. Alex Shalaby, MobiNil’s chairman noted that negotiations between the two operators had not reached a conclusion, and stressed that the cellco was considering other acquisition possibilities. (Source: Telegeography) Zain launches 3.5G mobile internet service in TanzaniaZain Tanzania has launched what it claims is the country’s fastest 3.5G mobile Internet service, the local Daily News reports. The unit’s managing director Khaled Muhtadi, told reporters that the 3.5G technology will offer a theoretical maximum speed of 7Mbps over its mobile network, and will initially be available in the capital Dar es Salaam with other regions covered by the end of 2009. The service is currently available to Zain customers in parts of the city centre, Kariakoo and the Peninsular, he said. The Tanzanian unit’s parent company has invested in excess of USD180 million this year in expanding and enhancing its network in Tanzania – including the HSDPA investment. In October this year Zain Tanzania said it was looking to increase its mobile subscriber base by 15% to 3.8 million by the end of the year. At that date, Muhtadi said: ‘We have reached over 3.3 million customers today and our target is to exceed 3.8 million by the end of the year’. He went on to say that the key challenges facing the cellco in its bid for expansion were falling subscriber revenues (particularly from new customers), the high cost of handsets and the slow movement of equipment and supplies through the port and customs. In brief:- International Energy Insurance Plc (IEI) has introduced an online transaction platform to make it easy for people to buy any of the company's products without having to be at its office physically. Customers can obtain insurance quote, renew their policies, get debit notes and get cover anywhere they are the world over once they are connected to Internet. Clients can also access their accounts via Internet enabled Personal Digital Assistant (PDA) phones. - The recent MyBroadband Survey suggests that the three largest telecom operators in South Africa - Telkom, Vodacom and MTN – do not only have the biggest number of broadband subscribers but also the best broadband offerings.
Nigeria’s Federal Government starts ICT Training for Education Inspectors in NigeriaThe Federal Government has formulated a new policy that would enable federal education inspectors to acquire Information and Communication Technology (ICT) training, to enable them to compute the activities of the education sector and enhance their productivity. The training, which would be conducted in collaboration with the office of the Millennium Development Goals (MDGs), is part of government's reform agenda of improving efficiency in service delivery. Speaking at the opening ceremony of the Data Management Training of Federal Inspectorate Service Officers at the Nigerian Institute of Information Technology (NIIT), Abuja, the Permanent Secretary, Ministry of Education, Goke Adegoroye said those selected for the training were from the Federal Inspectorate of Service (FIS) offices nationwide. "This training could not have come at a better time than now when the policy focus of the Ministry of Education is on computerisation of the activities of the education sector and staff ICT capacity building for enhanced productivity", he said. Adding that the training was part of the reform agenda of the ministry, to re-invigorate the FIS and improve its proficiency on quality assurance delivery. While attributing the perceived downward trend in educational output to use of obsolete tools for quality assurance practices, Adegoroye reiterated government's commitment to building the ICT capacity of its staff, to make them responsive to emerging global trends. Chief Operating Officer, NIIT Jailesh Shah said the training, which would last for two weeks, would enable participants to improve on their data management skills, thereby developing the country's education sector. "By the end of these two weeks, you are going to be masters in handling any management data process. Whether we are using the Oracle or other programs, you will be benefit maximally at the end of the course." Source: This Day (Lagos) South Africa: Cyber crime hits GovernmentThree IT specialists appeared in the Pretoria Commercial Crimes Court yesterday for siphoning R950 000 from the Department of Sports, Arts, Culture and Recreation. They were not asked to plead and the case was postponed. The trio will appear again in the Pretoria Commercial Crimes Court on 16 January. This comes after a fraud spree by a 12-member cyber crime syndicate, who were arrested during the December period. Senior superintendent Tummi Golding, from the Crime Intelligence Unit, says: “In 2006, R5 million was stolen from the presidency by two IT experts. And, last year, R950,000 was stolen from the Department of Sports and Recreation by six people. “From 2006 to date, the Crime Intelligence Unit arrested 78 people. The unit has deployed projects specifically to investigate and arrest syndicates involved in this type of crime.” Thabo Mosebe, head of communications and spokesman for the president, says: “There has been a case where a group of people were arrested on suspicion of fraud, and it was suspected that the presidency was one of the targets of the fraud.” (source: ItWeb) Nigeria’s Ambara State partners with Microsoft to put Igbo language into softwareAnambra State government is partnering the American Computer giant, Microsoft, to programme Igbo language into computer software. Governor Peter Obi, who disclosed this at the first Ofala celebration of the traditional ruler of Igbukwu, Igwe Martin Eze, said this was part of efforts to promote the use of Igbo language and increase computer literacy among Ndigbo. Governor Obi said Igbo language was not only compulsory in all secondary schools in the state but also a major language to be used in all social functions. Source: Leadership (Abuja) In Brief:- Intel Corporation has helped Zinox Computers produce two low cost notebooks known as the Zinox Classmate and the Zinox Smart Star Plus to meet the computing needs of scholars, students and their lecturers. These products supervised and certified by Intel are powered by the very latest Intel Atom processor. The notebooks are priced below $400. - The Rwandan government has plans to import up to 100,000 computers this year to boost the One Laptop Per Child (OLPC) programme that was launched by President Paul Kagame last September.
Zain Invests US$420 million to Launch Mobile Services in GhanaZain will invest US$420 million in its new network in Ghana and for the first time will be offering 3.5G services to its customers. Zain Ghana's network will offer its customers ultra high-speed internet access and for the first time in Ghana the ability to make video-calls and use rich multimedia content including the ability to send video clips, music and pictures at the touch of a button. Last week marked the launch in the country's capital city, Accra with the disclosure that Zain has invested over US$ 420 million to date in rapidly rolling out the network across the country The launch of its Ghana operation brings the number of countries in which Zain's award winning 'One Network' service coverage map to 17. 'One Network' Zain's borderless mobile service is available to over half a billion people across the Middle East and Africa - an area greater than the United States of America . One Network offers Zain customers favourable rates, free of roaming surcharges for cross-border communications. Ghanaian Zain customers now have access to One Network service and can travel freely with their phones through Burkina Faso , Democratic Republic of the Congo , Gabon , Kenya , Nigeria , Niger , Tanzania and Uganda . The company said there are plans to make the service fully operational in all other Zain countries by the end of the year. Prior to the launch Zain Ghana undertook a highly successful pre-registration campaign allowing aspiring customers to be the first recipients of a Zain mobile number. The operation will have numerous Customer Contact points including walk-in Centres that will be open till 8pm and Call Centres which are open twenty four hours, seven days a week. The state-of-the-art Call Centre will offer service in English and two of the most widely spoken local groups of languages in West Africa , Akan and Hausa. Source: Daily Independent (Lagos) 23 December 2008 MTN’s South Africa Empowerment deal a hit with investorsThe black economic empowerment deal MTN created in 2002 has turned out to be the most successful so far in wealth generated for participants. About 3200 MTN staff and former staff own shares in the company through Newshelf, a black empowerment investment vehicle set up by the managers. Newshelf borrowed R4.3bn from a variety of sources to buy into MTN at an average of R13.90 a share as it had no cash to fund the investment. Those 243.5-million shares are worth about R24.4bn, but loan-related debt and tax rose to R21.8bn, leaving a profit of R2.6bn. Debt has been calculated to February 27 next year, when several more weeks of interest will have accrued. At today's values, debt was smaller and the investment had realised a profit of R3.4bn, said an adviser close to the scheme, making this SA's most successful empowerment deal to date. Paying off debt and interest was always challenge in structuring empowerment deals when partners had little or no equity to put in, the adviser said. The Newshelf deal was structured better than some earlier empowerment deals, but was still reliant on the share price rising faster than debt. The effect of the loan interest payments is clear from the wealth created for the three greatest beneficiaries, MTN CEO Phuthuma Nhleko, chief operating officer Sifiso Dabengwa and finance director Rob Nisbet. Nhleko owns 7.927% of the trust, giving him an indirect stake of 19.2-million MTN shares. At last week’s price of R100 they were worth R1.93bn on paper, but Nhleko's indirect portion of debt whittles that down to R270m. Likewise, Nisbet and Dabengwa each hold a participation ratio of 5.5869%, or 13,6-million shares each, worth R1.36bn if they were unencumbered. Once their debt and other costs are cleared, they get MTN shares worth about R190m. While the executives had an indirect interest in share assets worth billions, their economic entitlement after deducting liabilities to funders was significantly smaller, the adviser said. The Newshelf deal reaches its full term on Monday, and MTN is structuring a new multibillion-rand empowerment scheme to attract fresh black investors and give Newshelf members the option to continue being shareholders. MTN chairman Cyril Ramaphosa said MTN's proposal to create sustainable and meaningful black participation was important for its long-term progress. Source: Business Day (Johannesburg) MTN gets the nod for I-TalkTHE Competition Tribunal has approved the merger between MTN and I-Talk Cellular after a long battle by some interested parties to discourage the deal. The tribunal heard statements from interested parties yesterday in the final competition hearing for the R511-million acquisition of mobile service reseller I-Talk Cellular, where MTN received full support from the Competition Commission. MTN voiced its desire to purchase the remaining 59 percent of the company last year (MTN owns 41percent). Huge Telecoms also made a bid for the company. But MTN had pre-emptive rights to purchase the KwaZulu-Natal- based reseller. When the commission assessed the merger late last year, Huge tried to convince the authority that the deal would diminish competition in the industry. But Huge changed its tune last week when making its statements to the tribunal. James Herbst, Huge Group chief executive, said: “Huge no longer has any commercial interest in I-Talk. Without a shadow of a doubt, there is no lessening in the mobile communication landscape as a result of this merger. It would be minuscule,” Herbst said. Though Huge no longer has commercial interest in I-Talk, it still opposes a merger with MTN. Herbst’s argument was that allowing a different company other than MTN to purchase I-Talk would increase competition in the market. “We would have partnered with a micro-lender or a micro-lender could have acquired I-Talk and advanced contracts to lower LSM customers at a much lower rate than what is currently available.” Thabelo Masithulela, mergers and acquisition analyst at the Commission said: “We are still of the view that the merger should be approved.” Source: The Times Rwandatel to Invest US$45 Million in Their Rollout Plan This YearRwandatel is attracting 40,000 subscribers weekly on its new 3G GSM system, making it the fastest growing telecommunication company in Rwandan history. And all this in spite of the fact that interconnectivity between Rwandatel and MTN Rwanda was poor and one could not make a call to an MTN subscriber. As of December 26, Rwandatel had 120,000 active subscribers. It promises Rwandans that there will be a modern penetration that is very high which means not only targeting the urban areas but also the rural areas. The total investment made in the country has been around 72 million dollars. Which was split in different areas: between equipments, sites, towers, generators, agents and so on. The company is currently making tests with Tanzania (Vodacom), Kenya (Safaricom), Burundi and Democratic Republic of Congo (Vodacom) with a view to creating roaming agreements with those countries. Source: The New Times (Kigali) In brief:- MTN's R1.4bn bid to acquire the African operations of Verizon became easier when a fierce opponent of the deal belatedly gave up its hard-won right to participate in Competition Tribunal hearings. The hearings were expected to drag on for five days,the tribunal said. Altech withdraw its intervention saying that MTN "has given a number of general undertakings in respect of the way in which it proposes to conduct the Verizon business”. Telecoms, Rates, Offers and Coverage (briefs)- Nigerian mobile operator Multi-Links has revealed that its target base is expected to reach ten million subscribers by December this year. -Glo Mobile subscribers are going to get up to a 95% reduction in charges for calls made on the Glo network. In a new promotion tagged "Glo Time Band Savings", customers will be entitled to discounts of between 10% and 95% for calls made on the Glo network, depending on the time of day the call is made. The discount percentage is calculated on the peak rate of the tariff plan. - Nigerian CDMA operator, ZOOMmobile, caused a major stir in the industry when it slashed by around 75% the prices of its premium handset products including Motorola Q, Treo 700P, Treo 755P, Palm Centro and Samsung IP-830W. -Angola’s privately owned mobile operator Unitel, announced that it will launch a multi-media messaging services (MMS) for customers using its 92 network. - Telephone subscribers rose to over seven million from 2.2 million in the last two and half years, according to Uganda’s Information and Communication Technology Minister, Dr. Ham Mulira. - Zimbabwe's telecommunication operators have been given regulatory approval to charge for all their products and services in a foreign currency.
Ugandan Ministry of Health introduces telemedicineThe ministries of health and Information and Communication Technology (ICT) are introducing telemedicine to extend quality health care services to rural areas. "Telemedicine is an important tool for providing healthcare services," said ICT minister, Dr. Ham Mulira. He was speaking during a telemedicine sensitisation workshop at Hotel Africana in Kampala last week. The project is being implemented through the ICT ministry's Rural Communications Development Fund. The fund's director, Bob Lyazi, said district officers will be able to exchange information with the main server at the health ministry. "Referrals that originally required ambulances especially in remote areas will now be done through the computer,"said Lyazi. "Soon, we shall procure and install the relevant infrastructure and hand over the project to the health ministry in 2012," he added. Primary health care state minister, Dr. Emmanuel Otaala, said the equipment at Mulago will link the country's largest health facility to Indian hospitals to share information on open-heart surgery. Source: New Vision (Kampala) Ghana Commercial Bank to Introduce Mobile Banking This YearGhana Commercial Bank (GCB) said last Monday it will introduce mobile banking services this year to enable its customers to transact banking businesses outside the banking halls. This new service is aimed at bringing banking operations closer to customers, especially very busy ones, who do not have time to visit the bank during normal working hours. Samuel Sarpong, Deputy Managing Director in charge of Operations, disclosed this at the opening of its 148th fully networked branch at Kisseiman in Accra. He said the opening of the Kisseiman Branch solidified GCB's position as the leader in the banking industry in the country. Sarpong said the bank was currently upgrading its software and expressed the hope to complete it by March next year to allow for modern facility for efficient delivery. He said the bank had embarked on building offsite ATMs at various vantage points throughout the country to ensure that customers with ATM cards could access cash anywhere and at anytime.
People* Philip Besimire who quit his marketing job at MTN Uganda has gone on to become the new Chief Commercial Officer with MTN Swaziland. *UTL's Kenyan marketing manager Levi Nyakundi has jumped ship to join Zain as its new marketing manager. *The Vice President of D-Link International, Yeo Kee Lee announced the appointment of Chris Uwaje, Oracle of the Nigerian IT Industry as the company's Regional Director for West Africa Events* REVENUE ASSURANCE FOR HIGH GROWTH MARKETS 18th-21st January Mövenpick Hotel, Dubai Revenue Assurance for High Growth Markets is the ideal place to meet the leaders who are developing and implementing solutions to the revenue management, assurance and billing challenges posed by the expansion of new services and proliferation of competition.For further information please visit http://www.iir-events.com/IIR-Conf/page.aspx?id=16215 * TELECOM FINANCE 2009 27th – 29th January 2009, Renaissance Chancery Court Hotel, London, UK Now in its fourth year, the TelecomFinance 2009 Conference and Awards Dinner will gather an exclusive group of the global telecom industry’s leading decision makers and visionaries to debate the challenges and opportunities we face in 2009. Featuring a who’s who of top-ranking investment bankers, corporate lawyers, C-level executives, consultants and private equity professionals, TelecomFinance 2009 is the year’s must-attend event.The conference will deliver insight from industry leaders, present challenging panels addressing the sector’s most significant questions and offer an opportunity to meet colleagues and competitors from across the globe.For further information please visit: www.telecomfinance.com/2009 * TELECOMS FRAUD AND RISK 23rd-26th March 2009 Hilton London Tower Bridge, London, UK Telecoms Fraud & Risk is the perfect place to learn about the developments in fraud prevention from the leading operators and solutions suppliers across Europe and beyond. Gain a greater understanding about how to manage the risks that the migration to NGNs is having, thereby securing your network and minimising fraud. Examine the enclosed brochure to see how attending Telecoms Fraud & Risk will enable you to cost-effectively enhance your fraud management strategy and make a measurable impact on your networks and service revenues. For further info http://www.iir-events.com/IIR-Conf/page.aspx?id=17135 *THE WORLD WIDE WEB CONSORTIUM 1-2 April 2009, Maputo, Mozambique Africa Perspective on the Role of Mobile Technologies in Fostering Social DevelopmentHosted by the Ministry of Science and Technology of the Government of Mozambique. For further information please visit: http://www.w3.org/2008/10/MW4D_WS/ Jobs and Opportunities* CALL FOR PAPERS FOR WORLD e-ID 2009 CONFERENCE WORLD e-ID 2009 aims to be an ideal opportunity to share visions, see new perspectives and opportunities based on new application standard such as ISO 18013, CEN TC 224, ISO 24727, BIG ePass/EAC, BIG eRP/BAC&EAC and new technologies, identify new programs on national and international level and show lessons learned from implementations and projects running. The submission deadline is March 13th 2009. All detailed information including the list of topics, the submission procedure available at:
Contracts* Motorola and MTN - Uganda Motorola Global Services has announced a three-year, multi-million dollar network optimisation services contract with mobile operator MTN Uganda, which will result in improvements in the voice, data and roaming experience for MTN’s subscribers. The specific area of focus will be on improving MTN’s packet data network performance, throughput and capacity. This is aimed at improving the quality of data services, as well as allowing MTN to realise full revenue potential of its data products.
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