Issue no 185

top story

  • Last week saw the announcement of ADSL broadband roll-outs in Algeria and Morocco by the incumbent telcos. Not so long ago broadband would have seemed a crazy commercial strategy in what are relatively small markets. But Maroc Telecom is claiming relatively short payback periods. These two North African countries are joining an exclusive club (Senegal, South Africa and Tunisia) whose membership suddenly looks like getting larger. Others are in the wings waiting to join. The potential of broadband (particularly its wireless variants) may lead to a substantial increase in Africa’s international bandwidth requirements.

    Last week saw a gathering of VIPs including the Minister of Post and Information Technology at Hôtel El Djazaïr to inaugerate the first ADSL service in Algeria. The launch ceremony included a video-conference with HEC in Canada. ADSL has been launched at the central telephone exchange and can provide service in the following places: Algiers, Constantine, Tizi Ouzou, Oran, Sétif, Annaba and Batna. The initial target for ADSL subscribers is 10,000, an ambitious target given that South Africa has only recently passed that number.

    Algerie telecom wants to offer it at an affordable price to companies and the public sector. This subscription requires only that you buy a dedicated ADSL modem. This comes in two models: an ethernet version (for companies and cybercafes) and a USB version. These will offer 128 Kbp/s, 256 Kbp/s, 512 Kbp/s at respectively (without tax) 38,000 DA , 55,000 DA and 75,000 DA.

    Also last week Maroc Telecom obtained authorisation from the regulator to sell ADSL. Having passed various quality tests it has been given the green light to sell the service. Although local commentators thought the market would be "limited". It has started offering promotional packages to new clients. Maroc Telecom started down this road in November 2002 and started testing the service in Rabat and Casablanca. At present capacity is limited.

    As in Algeria, the primary market is seen as being corporates (more specicifically large ones). The service is offered in three bandwidth capacities. 128 Kbps, 256 Kbps and 512 Kbps. Prices per month are respectively 479 dirhams (44 euros), 859 dh (79 euros) and 1 609 dh (147,5 euros). One small hiccup is that apparently the download times are limited and you will a supplement of 1.50 dh for every supplementary "méga-octet". This will pose a serious problem for potential cyber-café users as they have no easy way of controlling the use by their users.

    Maroc Telecom says it will have to invest about 400 euros per subscriber which gives a direct cost payback period of about 10 months and shorter on the higher price bands. It will not say how many users it has currently signed up.

    As Adlane Fellah said in issue 151, there are considerable opportunities for the use of broadband wireless. Countries such as Botswana, Ghana and Nigeria are auctioning frequencies for specific BWA applications. Other countries, for example Lesotho and Morocco, were at that stage examining the technology seriously with local companies requesting information for systems vendors. BWA wide-scale commercial deployments are happening in Botswana (Airspan), South Africa (Airspan) and Nigeria (see above). Nevertheless small-scale BWA private network deployments are occurring in many countries like Mauritania, Egypt and elsewhere. They are however less publicized since they either serve private networks purposes (mining, oil companies for example) or are small ISP deployments.


  • Madagascar has awarded an American consortium a 500,000-dollar contract for feasibility studies towards connecting the country with a transcontinental submarine optic fibre cable network, Communication minister Haja Razafinjatovo announced last Tuesday.

    The minister said this was the only way Madagascar could cut down on Internet connection costs. The studies would be carried out by IDC, Project International and David Ross Group - all based in America - in conjunction with a South African company.

    The consortium would try to persuade about 20 countries to include Madagascar in a shared submarine cable network that runs past the country’s northwestern coast. Experts say Madagascar would need some 30 million dollars to carry out the project.


  • Comesa is promoting the establishment of a regional telecommunications network. Comtel is meant to facilitate increased trade relations within the region. It is the outcome of a study on telecommunications network inter-connectivity and tariff harmonisation, carried out by Telia Swedtel on behalf of Comesa, with financing from the African Development Bank. The project cost is estimated at Sh18.4 billion (US$ 240 million).

    According to a Comesa report entailing its development projects and programmes, Comtel will require a private telecommunications network linking national information and communication technology operators in the Eastern and Southern Africa region.

    It will be built on the existing infrastructure where available, but in most cases, new transmission routes, employing a mix of fibre-optic cable and digital microwave infrastructure. Comtel will provide a high quality carrier system for regional traffic, and the report says users will be charged at competitive rates.

    The Comtel project traverses the following countries; Angola, Botswana, Burundi, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Madagascar, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Tanzania, Uganda, D R Congo, Zambia and Zimbabwe.

    The Nation

  • Ghana Telecom has has asked the regulator, the NCA to suspend the liberalization of the international gateway for another four years to enable it to fulfill its expansion objective. In an interview with GT’s Chief Financial Officer, Sven Seim warned that the move by the NCA could lead to annual losses of 10 to 15 million dollars to GT, "which is in excess of our expected profit for 2003".

    The revenue that GT makes from international calls account for about 15% of the company?s total revenue. It currently makes about USD20 million a year on it. He warned that a reduction of this to about USD6 million would lead to job losses. If the NCA goes ahead with this, "we would have to lay off between 800 to 1,300 of our 4100 workforce".


  • Malawi Mobile Limited, the country’s third cellular phone service provider licenced in April 2002, admitted last Wednesday that it has delayed roll-out of its network initially set for January 2003 but said its programme is still on track.

    Company chairman Brian Bowler said in an interview from Lilongwe that currently Malawi Mobile, which is set to invest about K5 billion at present exchange rates (US$56 million) over a five-year period, is in the final stages of negotiations with "one of the biggest" mobile phone operators in the world.

    "You will understand this is a very big investment where we had to locate an operator and we are in final stages of negotiations with a very big mobile phone operator who is now ready to come to Malawi," he said of the company which promised to have a dial tone early this year. He said currently, Malawi Mobile and the operator were discussing issues of importation of equipment and tariffs. But Bowler refused to disclose the name of the operator.

    In earlier interviews, Bowler said Malawi Mobile is a joint venture between a local business consortium and Ubambo of South Africa. Ubambo, composed of many empowerment companies in South Africa, will have Cell C as its investment representative in the company.

    The Nation

  • - A South African company this week launched a Linux-based pre-paid electronic voucher solution for the telecoms industry. The company says it opted to develop the product on Linux because of the flexibility and the low-cost of the platform.

    - SA’s Telkom received a temporary reprieve last week when the Pretoria High Court set aside a USD130m award by the French-based International Court of Arbitration in favour of US software group Telcordia. This means that Telkom will not have to pay the USD130m that Telcordia was seeking to recover in damages after Telkom terminated the software supply contract between the two parties. It also means Telcordia may have to pay Telkom’s counterclaim of USD330m, including a claim for refund of about USD97m Telkom paid to Telcordia. News of the successful court case lifted Telkom’s share to a new high of R65,80, but it lost some of its gains to close at R65.

  • - Econet Wireless Nigeria Limited last week started the implementation of the per second billing system. Econet said the Per Second Billing (PSB) platform was switched on midnight Tuesday. Henceforth, subscribers on the Econet network, could chose if they want to be billed per second which costs 80k or per minute which has been reduced to N40 peak period and N36 off-peak on the company’s premium product, Buddie.

    - Mic Tanzania Ltd has announced a special festive offer for its subscribers, who can now get a 25 percent discount on calls they make to Buzz numbers of their choice until the 30th of June next year.

    - NITEL has concluded arrangement to roll out Global System of Mobile Technology (GSM) to cover Imo State Network before the end of the year.

    - Telkom’s proposed average tariff increase of 2,7% for 2004 may look reasonable initially, but puzzling claims and possible omissions from the monopoly’s proposed tariff adjustment could cost business and consumers millions next year, according to the Communications Users Association of SA (Cuasa)."Although Cuasa has not received confirmation from Telkom on its proposed tariff increases, Cuasa assumes that a statement released to SENS is official enough to serve as the basis for informed comment. The association is seeking clarity on various discrepancies associated with the proposed tariffs, as it appears that Telkom’s increases could be around 1,8% higher than they should be," says Cuasa’s Ray Webber.


  • Plans by the government to license additional Internet backbone providers have now been suspended until a second national operator is licensed.

    The decisions are contained in a report by a task force created in June by the ministry of Transport and Telkom Kenya Ltd (TKL) and market regulator - the Communications Commission of Kenya (CCK). With Telkom Kenya’s exclusivity in major market segments set to end on June next year, expectations in the market were opportunities for new entrants would open.

    The task force has recommended that a national consultative forum be held to formulate a common model for interconnection and dispute resolution. It has also been recommended that the CCK should amend the Internet backbone licence granted to TKL to facilitate full exploitation of the benefits of Internet-based technologies.

    The Nation

  • President Olusegun Obasanjo last week warned persons currently involved in any form of Advance Fee Fraud (a.k.a. 419), cyber and computer crimes to have a rethink. The president gave the warning while inaugurating a 15-member presidential committee on 419 activities on the cyber space.

    Obasanjo stated that "if nothing else, we must learn from the experiences of other societies where the internet is being used by terrorists, bank robbers, fraudsters and for pornography."

    The committee on 419 has as its chairman, the National Security Adviser, Lt. Gen. Aliyu Mohammed Gusau (rtd); the Attorney-General of the Federation and Minister of Justice, Chief Akinlolu Olujimi (SAN); Minister of Science and Technology, Professor Turner Isoun; Inspector-General of Police, Tafa Balogun; and the Chairman/Chief Executive Officer of the Economic and Finance Crimes Commission, Nuhu Ribabu.

    In the same week an Ikeja High Court Judge, Justice Morenike Obadina, granted an application for Stay of Proceedings in the Advance Fee Fraud case involving Chief Alumile Adedeji (a.k.a Ade Bendel), the 1st accused, and Mr. Shina Olowoake, the 2nd accused; pending the determination of the appeal filed by the defense counsel at the Court of Appeal. Ade Bendel and Olowoake are arraigned before the court on a six- count charge, for allegedly swindling a Nigerian for the sum of N28million with a promise to increase the money to the tune of US$2,700,000, an offence in contravention of Sections 8 (a) and 1 (3) of the Advance Fee Fraud and other Related Offences Act 13 of 1995, as amended by Decree 62 of 1999.

    Outside Nigeria various individuals have set out to humiliate the scammers. Mike, a 41-year-old computer engineer from Manchester, runs the scam- baiting site, which started two months ago. ‘Almost always the scammer will think you are a real victim and try their best to extract money. It started because I used to get a few emails, and although I knew it was a scam I never knew how it worked. I did some research, found out about scam baiting and decided to have a go. It’s now almost a full-time hobby for me.’ Taking a leaf out of the 419 gangs’ book, most of the scam baiters keep their true identities secret. There have been at least 25 murders linked to the 419 gangs. Last February a retired Czech doctor who had lost more than œ400,000 stormed into the Nigerian Embassy in Prague and shot dead the leading consul.

    A scam-baiting site run by ‘Alexander Kerensky’ focuses its efforts on 419 gangs based in Amsterdam. Adopting the persona ‘Lillith Cova’, an attractive but desperately lonely 27-year-old advertising executive from London, Kerensky exchanged emails with a man by the name of James for more than a month. During this time he received authentic-looking documents, including a power of attorney, entitling him to a 20 per cent share of $18 million.

    ‘The site started because I managed to lure James in front of an Amsterdam webcam and I wanted people to know what these scammers look like. I don’t have anything against Nigerians. These people are, quite simply, outright criminals.’

  • M-Web CommerceZone, an independent local business-to-business e-marketplace, saw its transaction volumes smash through the R10bn mark this week, defying common opinions that e-business is floundering. Achieving growth against the odds since its establishment just under three years ago, M-Web CommerceZone recorded orders worth R2,5bn in its first year of operations between 2001 and 2002. In the last financial year, recorded transactions virtually doubled to R4,6bn. By Q2 2003 transaction volumes were rocketing towards the R9bn mark, culminating in last week’s announcement that the R10bn barrier had been broken.

    Andreij Horn, M-Web CommerceZone’s GM, attributes this success to the fact that customers on the buy and supply side are seeing lucrative bottom line returns."M-Web CommerceZone combines an e-procurement offering with a strategic sourcing project for each client. By adding a new client’s indirect procurement volumes to the billions that we already manage for existing clients, we can offer an immediate reduction in procurement costs, and a contract management service that ensures that the unique quality, service and other requirements of the new client are met. By enabling even the most complex of our customers to feel the benefits of e-procurement within 12 weeks of implementation, they see real return on investment in the same year as joining our system," he says.

    M-Web CommerceZone deploys purpose-built private exchanges for each of its clients, and strategically sources a select group of suppliers to provide clients with indirect goods and services. These fully integrated, cutting-edge technical solutions aim to further provide clients with an affordable way to streamline their business processes and improve supply chain management and control. With the importance of the new black economic empowerment (BEE) scorecard, M-Web CommerceZone has also acquired a number of thoroughly tested BEE suppliers online to assist clients to achieve their empowerment status. "E-procurement is back on the corporate agenda. But, as with all other ICT-related projects, customers are now demanding to see proper business cases that deliver a measurable return on investment. It will be the service providers who can deliver on these expectations who will be the survivors of the local B2B industry. Given our successful track record and credibility as a secure, long-term e-procurement partner, M-Web CommerceZone is confident of being able to lead in this industry and further expand on our extraordinary growth," Horn concludes. Major clients include Media24, M-Web, MultiChoice, Nasbook, M-Net, SuperSport, Educor, BA/Comair, Capitec Bank, Sun Couriers and Panorame Medi-Clinic.

    ICT News

  • - Market research firm World Wide Worx predicts that SA Internet access will get a "kick-start" next year, after a dramatic slowdown in the past three years. According to "The Goldstuck Report: Internet Access in SA 2004", 3.1 million South Africans had access to the Internet at the end of 2002. Growth in 2002 was around 7%, the slowest since the Internet became available to the public in 1993, and the first time it had been below 20%. Growth in 2003 was set to be only 6%, with 3.28 million South Africans expected to have access to the Internet by the end of 2003. This amounts to one in every 13 South Africans, marginally up from one in 15 at the end of 2001.


  • South Africa and Namibia are the only two southern African countries included in the Œmedium access’ list of the world’s first Digital Access Index (DAI), which measures an economy’s access to information and communications technology (ICT).

    The DAI was released by the International Telecommunications Union (ITU) in Geneva yesterday, as part of the run up to the World Summit on Information Society due to take place in the Swiss city from 10 to 12 December.

    According to an ITU statement, the DAI is the first index of its kind, and covers 178 economies and classifies countries into one of four digital access categories: high, upper, medium and low. Those in the upper category include mainly nations from Central and Eastern Europe, the Caribbean, Gulf States and emerging Latin American nations. The DAI also distinguishes itself from other indices by including a number of new variables, such as education and affordability.

    "Many have used ICT as a development enabler and government policies have helped them reach an impressive level of ICT access," the DAI report says.

    It adds that the index will be a useful tool to track the ambitions of some developing economies. The rapid adoption of ICT within ambitious developing economies has resulted in the first release of the DAI delivering some surprises. For instance, Slovenia ties with France, and the Republic of Korea - usually not among the top 10 in international ICT rankings - comes in fourth. Apart from Canada, ranked 10th, the top 10 economies are exclusively Asian and European.

    However, most southern African countries fall within the low access category. The report states that the four Asian Tigers (Korea, Taiwan, Singapore and Thailand) have made the greatest progress in ICT over the last four years. The results suggest that English is no longer a decisive factor in quick technology adoption, especially as more content is made available in other languages.

    The DAI combines eight variables, covering five areas, to provide an overall country score. The areas are availability of infrastructure, affordability of access, educational level, quality of ICT services and Internet usage. The results point to potential stumbling blocks in ICT adoption and can help countries identify their relative strengths and weaknesses.

    According to the ITU statement, the results suggest it is time to redefine ICT access potential. "Until now, limited infrastructure has often been regarded as the main barrier to bridging the digital divide," says Michael Minges of the ITU’s Market, Economics and Finance Unit.

    "Our research, however, suggests that affordability and education are equally important factors." To measure the overall ability of individuals to access and use ICT, the ITU study has gone beyond the organisation’s traditional focus on telecommunication infrastructure, such as mobile phones and fixed telephone lines.

    For example, nearly 40% of Peruvians responding to a survey say they either did not have a computer or could not afford Internet services, which points to affordability as a critical success factor. ITU research has also shown that Internet use is closely linked to education.

    In China, over half of all Internet users are university educated. The DAI concentrates on factors that have an immediate impact on determining an individual’s potential to access ICT. It deliberately omits variables subject to qualitative judgment such as the regulatory environment. Besides its global scope, its carefully chosen variables guarantee transparency, says the ITU. "Market structure and degree of competition are open to levels of interpretation," Minges says.

    "We purposely exclude qualitative factors ­ to avoid subjective bias in the calculation."



    Impi is the Zulu word for ‘a group of warriors’ and Impi Linux is one with a host of proven open source software.

    "Most developers in the "first world" countries have no idea of the conditions on our continent. Waiting around for a foreign developer or company to give us something that we need, merely echoes the legacy of colonialism. We need to dispose of that mindset," said Ross Addis in an e-mail interview.

    "Impi Linux proves that Africans are capable of being self-determined in the digital world," he also said. Addis, technology consultant at MIP Holdings, is chairman of the Gauteng Linux User Group that gave birth to Impi Linux.

    He said Impi is as good as any other Linux system, even better. Impi comes with the Linux tradition of stability and being less prone to virus attacks.

    "Sure a few [viruses] have been written, but they haven’t really made any impact. Linux systems are normally more secure that other OSes and because of the diverse nature of the distributions, desktop interfaces and packages, it would be very difficult for a virus to infect all Linux systems," Addis added.

    "Where possible, we will try to involve the local academic and IT communities in implementing their language in Impi Linux," Addis also said. And that is the spirit of open source software development—a community of developers working for the good of all.

    New Vision

  • - Bugs in Gaïnde, the online customs system implemented in Senegal are causing considerable financial losses for the Government.

    - South Africans have been waiting almost a year for phase one of their national e-government rollout, in which the government would consolidate information and existing services, then establish a call center and portal to allow citizens to access this information. "There is progress, we just haven’t launched yet," explains Jack Shilubane, acting government Chief Information Officer. Despite administrative delays, Shilubane says the development work on the project is complete. He attributes the delay to necessary caution. "Every department has to agree that they offer particular services," he says. Some municipalities have already launched their enhanced customer service portals; however, this is not part of the national rollout and does not fall within the government’s definition of e-government. "What we are doing is integrating all government information on a single portal," says Shilubane. "There have been departments, provinces, municipalities that have been doing e-government projects, and they were started before we established the gateway. They will ultimately fit into what we are doing."

    - SA’s Border Technikon and the International Computer Driving Licence (ICDL) Foundation have combined forces, sponsoring the training and testing of 22 disadvantaged learners towards their ICDL qualification.

    - Sun Microsystems has introduced aggressive discounts on a broad range of software technologies for the higher education market.


  • The introduction of Radio Frequency Identity (RFID) asset tagging is set to revolutionise the supply chains of retail organisations in the near future. That’s according to Andre Muzerie, Sun Microsystems Coastal manager.

    He says this is evident in the move by US-retail giant Wal-Mart to compel its suppliers to comply with its RFID solution for better inventory management.

    "The world’s largest retailer, Wal-Mart has issued its suppliers with a deadline of 1 January 2005 to ensure that they are compliant with its RFID system - if they don’t, their products may disappear from the shelves of the retail giant. Sun has established an RFID test centre to assist suppliers in certifying their RFID solutions to guarantee compliance with the shopping chain’s standard," he says.

    Muzerie says the impact of Wal-Mart’s RFID mandate to its suppliers is enormous and will change the way manufacturers and suppliers track inventory. "RFID will have a massive impact on many companies in the fast-moving consumer goods industries. It will change the way goods move through the value chain - and, because it will introduce compelling new efficiencies, it cannot be ignored," he says.

    Wal-Mart will use the Electronic Product Code (EPC) compliant RFID technology for identifying, tracking and tracing deliveries and inventory.

    "Because the Wal-Mart Test Centre and the RFID Test Centres are built using the same technology, its suppliers can test their RFID solution first with Sun to ensure compliance with Wal-Mart’s RFID specifications," says Muzerie.

    "Sun has been working with customers to determine the most cost effective way to help them with compliance to Wal-Mart requirements. We will take the lessons learned from this experience to assist SA companies to move to RFID systems, reducing the time and expense suppliers will have to undergo to support local RFID initiatives."

    The Sun RFID test centre, located in Dallas, Texas, will be open to Wal-Mart’s suppliers by December 2003. The Sun RFID Test Center will be powered by the Solaris Operating System using Sun Java Enterprise Software and the Sun standards-based implementation of Savant, with additional value around self-healing and provisioning of EPC readers.

Digital Content

  • Reporters Without Borders has urged the Zimbabwean authorities to drop charges against 14 people who were arrested for circulating an email message criticising President Mugabe’s economic policies and calling for his departure. They were all released on bail but have been ordered to appear in court on 26 November.

    "Robert Mugabe has already gagged the traditional news media and we must now speak out so that the Internet does not meet the same fate," Reporters Without Borders secretary-general Robert Ménard said. "The Zimbabwean opposition is increasingly using the Internet to distribute information criticising the regime and this right must not be denied them," he added. The Herald, a government-controlled daily, said those detained were released after paying bail of 50,000 Zimbabwean dollars. The email message encouraged Zimbabweans to stage violent demonstrations and strikes to force President Mugabe to stand down, the newspaper said.

    This is the first time the authorities have used a law passed last year by the parliament allowing them to intercept email. An employee with a Zimbabwean Internet service provider told the BBC that no system for monitoring email has yet been installed. The police therefore intervened after receiving a copy of the message.

    The Zimbabwean news media use the Internet to get round government censorship. After the Daily News was banned in October, its editors decided to continue publishing on a website hosted in neighbouring South Africa. The Insider, a newspaper that has declared its intention of providing independent news, is publishing online since September to avoid the prohibitive cost of a paper edition.

    Reporters sans frontières

  • A perceived lack of security has slowed down efforts to promote online shopping in Kenya, but the banks, product and service providers running websites are optimistic that with rising awareness and availability of network security, electronic shopping will soon catch on. 

    Already, airlines operating in the country are using the Internet for ticket bookings, confirmation of reservations and general information. Local supermarkets see it as the way of the future, but are hesitant to use it until security is guaranteed.

    "It is still the ultimate convenience for modern shopping of all commodities, especially gift items, but the risk of fraud is too high and banks are not prepared to take it," said Fred Odhiambo, head of marketing, public relations and community affairs at Barclays Bank. He said that while the demand at the moment did not justify investment in high-cost security software, it is bound to be introduced as demand rises.

    Online shoppers are required to e-mail their credit card details to the shops, upon which the cards are verified by the authorised banks before any transaction is enforced. 

    Currently, Barclays and Kenya Commercial Bank are the only two credit card providers who conduct such verification on local and international card payments in Kenya. In the event of any losses, the banks bear the risk.

    Dr Tony Githuku, IT director at KCB, said that while the Kenyan urban elite had the necessary awareness, the market had not developed confidence in information security. He said that there could be a viable clientele for online shopping by next year and his bank was already studying how to guard against hackers.

    "We already have a mechanism to detect such fraud immediately it is committed, which enables us to pre-empt repeat thefts from the same card; what we now require is a preventive mechanism to deter hacking," said Dr Githuku. 

    He said that the risk factor would be resolved when Kenyan banks adopted the superior technology of smartcards. "It is a requirement now by Visa and other international card systems that we change our current card system to the more secure chip card, which has more anti-fraud protection." 

    He said that international credit card providers had set a 2006 deadline for the change and those failing to adhere would be left out of international transactions. 

    The smartcard is already in use overseas; Kenyan banks have been slow to issue it due to the cost factor. "Our current card system costs $1 per card, while a smartcard costs up to $9 per card to produce. It will be a major investment to replace all existing cards with the more secure Smartcard," said Dr Githuku.

    With a smartcard, one has to use the actual card for any transaction to take place, unlike the current system where card information can be used by hackers without physically inserting the card.

    Kenya Airways introduced the card system last month; KQ web administrator Judy Waruiru says that, already, an average five customers buy tickets online daily.

    However, Ms Waruiru noted that all the customers were expatriates or employees of non government organisations; the general Kenyan traveller had yet to take to the concept. 

    Where Kenyans are engaging in online transactions most of the users avoid paying with their own credit cards, and would rather outsource credit card services as a precaution against the risk of Internet fraud. 

    This has created a new line of business for online shopping providers who are charging a nominal five per cent fee per transaction. 

    "We mainly deal with items of low value such as books, magazines, CDs or tapes, which are either not locally available or which users consider overpriced in the Kenya market," said John Ochieng of Afripay Ltd, which provides such services.

    Like others in his business, the company facilitates the purchase by using its own international credit card and charges a five per cent fee per transaction, thereby allowing the customer a risk free purchase.

    "There is a general risk of hackers, but we view it as a global problem that should not deter our utilisation of its many conveniences," said Mr Ochieng. The challenge is for online shoppers to be fully conversant with the products they want to buy.

    Mr Ochieng said that the popularity of DVD players had seen Kenyan buyers at times ordering equipment without checking its regional specifications. "There have been cases of buyers paying for goods with European or American market specifications, which means a waste of money," said Mr Ochieng.

    Sheryl Kibaki, marketing manager at Marshals, says that the company runs a website which serves mainly as a shopping brochure for its customers in the East African region. "People could probably buy through the site but prefer to use it to identity their requirements and then come around physically for the purchase. I think there is that general scepticism about the safety of online payments," said Kibaki.

    Major hotel chains in Kenya have also noted a slow but steady growth of online shopping although largely for booking purposes, with payments done on arrival.

    Among those experiencing this trend is Serena Hotels, which works closely with Barclays to verify details of credit cards.

    Mr Odhiambo, however, said that overseas holidaymakers use E-mail to book hotels and local banks are able to verify the authenticity of the card holders’ accounts before the bookings are allowed. But the actual payment is made by tourists upon arrival. "We have worked closely with Serena Hotels and the system is efficient and risk-free" said Mr Odhiambo. 

    The Holiday Inn also reports growth in online bookings by corporate clients. "There are occasional payments online, but most of them are made physically," said Edwin Muturi of the hotel’s marketing department.

    The general apprehension among Kenyans has to do with reports of thefts perpetrated by hackers in the past three years.

    At a security seminar for the banking industry in Kenya held in September, Col (rtd) Jan Kamenju, director of the Security Research & Information Centre, warned bankers of the increasing incidence of Internet fraud, committed by hackers who are able to overwrite passwords and make unauthorised intrusions into corporate websites. 

    Two years ago, the police anti-banking fraud unit reported that Ksh50 million ($641,000) intended for a firm in Dubai was diverted by hackers. This year, Ksh10 million ($128,000) was also stolen by hackers. 

    These and other cases have made Kenyan banks wary of online shopping. "We operate in an environment in which a single intrusion could cause undue panic, thereby killing the concept, which is largely why banks are cautious about online shopping at the moment," said Dr Githuku.

    He said that even when it takes root, the immediate clientele is expected to be the elite, especially frequent travellers and expatriates, who appreciate the concept and are not deterred by the risks.

    "More and more Kenyans are travelling, while increased exposure to the Internet and awareness of the cashless culture of credit is cultivating the concept of online shopping," said Dr Githuku.

    The Nation


    - Community Information Network for Southern Africa (CINSA) portal/website is now live and online. This is to be the virtual meeting-place for the network members and any ICT practitioners. It is also a publishing space for community ICT knowledge workers to post their information and thus share it with others by contributing articles, best practices, reports, products and case studies. The portal also allows you to participate in an interactive discussion through a discussion forum on a number of topical issues - suggest a topic or participate in an existing one. In the near future the website / portal will house a searchable database of community ICT initiatives, service providers and practitioners in SADC. Coverage of CINSA’s regional conference: page&SubMenu=

    - the UK and European executive jobs and recruitment website has expanded its operation into the growing South African executive recruitment and jobs marketplace.

Mergers, Acquisitions and Financial Results

  • Econet’s battle with the shareholders of Econet Wireless Nigeria and Vodacom has more twists and turns than a race in Monte Carlo. This week there were three significant developments:

    1. A South African High Court last weekend barred founder of Econet Wireless International (EWI) Strive Masiyiwa and two others from interfering in the affairs of Vodacom Group over the latter’s interest in Econet Wireless Nigeria Limited (EWN). The two companies barred along with Mr. Masiyiwa are Econet Wireless Limited and Econet Wireless International (EWI). The restraint order made last Friday followed a libel suit filed against Mr. Masiyiwa and EWI by Econet Wireless Nigeria. EWN had asked the court for an order restraining Mr. Masiyiwa and the two from any further defamatory communication with Vodacom, Vodaphone, Telcom, Venfin and the media against it and its directors. All those named are barred from making any allegations that Vodacom Group (pty) Limited, its shareholders, Telkom SA Limited, Vodafone Group Limited and SBG Communications Inc or any of their subsidiaries, any member of the media or the public at large that the applicant (Econet Wireless Nigeria) or its officials, or its shareholders, were or are in any manner involved in bribery and/or corruption,"

    2. Meanwhile the Nigerian judge who failed to address speedily a clash between shareholders in Econet Wireless Nigeria has been told to step aside to allow international arbitrators to take over. The move will lead to a more rapid resolution of the damaging dispute that is jeopardising plans by SA’s largest cellular network operator, Vodacom, to enter the country by taking a majority stake in the cash-strapped Nigerian operator. On Monday, Econet Wireless International won a partial victory when The Hague’s International Bureau of the Permanent Court of Arbitration agreed that the chief judge of the Federal High Court of Nigeria was taking too long to appoint arbitrators to investigate the clash. The court ruled that the Nigerian judge had "failed or neglected to appoint" arbitrators to hear the matter within 60 days of the initial complaint being laid. The Nigerian judge must now step aside and the International Court of Arbitration in Paris will instead be given the power to appoint a three-member judicial panel to hear the dispute.

    3. Econet Wireless Nigeria Limited has de-registered its former founding partner, Econet Wireless Limited, from the list of shareholders of the company. In a letter addressed to the companylasr Monday and signed by its chairman, Oba Otudeko, EwN stated that EWL’s name was entered into the register of members of EWN in the first instance without sufficient cause. The letter titled "Rectification of Register of Members" stated, "this is to inform you that at its meeting held on 13th November 2003, the Board examined the Register of Members of EWN and after careful deliberation and examination of all relevant papers it was discovered that the name of your company was entered in the Register of Members of EWN without sufficient cause."

    "We are by this letter, advising your company to cease and desist from parading itself as a member or shareholder of EWN. Kindly return to us immediately the share certificate erroneously issued to your company for cancellation.

    EWN had in an affidavit deposed by Tunde Oye-wole, the General Manager, Legal Services of the company in support of the company’s suit against Masiyiwa in a South African court, stated that it was initially intended that Econet Wireless Limited, a company where Masiyiwa has controlling interest, would be allotted five percent shares in the company’s equity.

    Consequent upon this, EWL had always been referred to as a minority shareholder of EWN. The refusal of EWL to pay for the shares has therefore meant that it was never a shareholder in the real sense in the first instance.According to the affidavit, "the first respondent (Strive Masiyiwa) has failed and/or refused and/or neglected to pay for such shares and is thus, in substance, not a shareholder of the applicant".

    Various including Business Day and This Day

  • The International Finance Corporation (IFC) has provided a USD100,000,000 (about N137bn) to MTN Nigeria as a long term debt and equity financing to expand its nationwide GSM cellular telephone network in Nigeria.

    The MTN investment, according to its executive vice president, Peter Woicke who handed over a Diamond Bank cheques for the USD100 million loan to Mr. Pascal Dosie, the chairman, MTN Nigeria in a ceremony in Abuja last, is one of IFC’s largest in the telecommunications sector and the second largest investment in sub-saharan Africa.

    The investment is part of a USD395 million financing package comprising a local currency syndicate that includes Nigerian banks and senior loans from IFC, standard chartered merchant bank, DEG and FMO. The total financing package, according to IFC officials, has been arranged by Citigroup (London) and Standard bank (London) to support MTN Nigeria’s $1.3 billion capital expenditure programme.

    Peter Woicke said IFC was delighted to support the project. He then added: "Linearization of the mobile telephone sector is revolutionizing telecommunications, improving service quality, and expanding access to previously under-served parts of the population. The project clearly demonstrates that successful reforms will attract institutions such as IFC, as well as the private sector," he said.

    While expressing optimism over the loan facility, the chairman, MTN Nigeria, Pascal Dozie, said inadequate infrastructure, especially in the area of power generation and distribution has continued to pose a challenge to the deployment of the MTN network.

    In consequence, he said, "we must erect generators alongside all of our installations and in addition source diesel for these installations, many of which are in rural communities that are difficult to reach.

    Weekly Trust

  • - Cellular network operator Vodacom increased its total customer base by 25.1% to 9.6 million in the six months to 30 September. Group revenue of R11.29 billion was 19.6% higher than the R9.44 million achieved in the same period a year before. South African revenue rose 19.3% to R10.61 billion, while the other African operations contributed R691 million or 6.1% (2002: R549 million or 5.7%). The group says Vodacom Congo in particular showed strong revenue growth, although off a low base, growing revenue by 115.8% to R205 million.

    - According to the Namibian Economist, Barclays Capital is one of several financial institutions having their eyes fixed on the tender process for the second cellular licence. While the financial institution has not yet defined its role clearly, South African financial consultants said Barclays is one of several banks bidding secretly for the role as an arranger.


  • * On the move: NCTec has appointed André Truter as Technical Manager and Keith Clarence as Marketing Manager...Judith Middleton, Marketing Manager of CITI is leaving to set up her own IT marketing consultancy... Jailed Tunisian ISP owner Zouhair has been released,

    * The growth of cellphone services on the African continent could be slowed by infrastructure, regulatory, fee and fraud issues, says Vitalis Olunga, deputy chairman of GSM Africa. Opening the GSM In Africa conference in Cape Town last week, Olunga said cellular operators faced regulatory pressure to increase service licences and spectrum fees, increase taxation on airtime and attempt to apply rules that were designed for use in the west."As a result, operators are facing declining revenues as wholesale tariffs come under regulatory pressure and retail tariffs come under downward commercial pressure, while economic development in Africa continues at a low level," he said.

    * A former Telecom Namibia manager who fled to South Africa two years ago after he was charged with fraud running into millions of dollars may lose his pension money. Lutchmanan Ivan Ganes, a former Procurement Manager at Telecom Namibia, has been trying to have some N$325 000 that is still held in his name in a Namibian pension fund scheme transferred to South Africa, the High Court was informed last week. His effort to have the money transferred was brought to a stop on Monday when Judge Nic Hannah granted an urgent order to Telecom.In terms of the order Napotel Pension Fund may not release the pension funds until a case in which Telecom Namibia is claiming N$4,238 million from Ganes has been finalised. Ganes has been a fugitive from justice in Namibia since mid-July 2001, when he stopped reporting to the Police once a week as was required of him in terms of the conditions that had been set when he was released on bail a month earlier.

    In court papers that Telecom Namibia has now filed with the High Court in an effort to retrieve N$4,238 million from Ganes, it is for the first time being set out in detail how the fraud is claimed to have been committed. Also set out for the first time are claims that Ganes also received some N$4,05 million in bribes - or "secret profits" or "secret commission", as Telecom refers to it - between 1995 and early 2001 from various companies that were doing business with Telecom Namibia.

    Telecom Namibia claims that these amounts included N$444 655 that Ganes received from Dresselhaus Transport, which was represented by Weakley at the time, N$1,5 million from Global Telecom (Pty) Ltd, N$1,653 million from Energy Procurement Services (Pty) Ltd, and N$455 955 from Telephone Manufacturers of South Africa (Pty) Ltd.The last amount, Telecom claims, was received by Ganes through a close corporation that he had started up, Lynco Telecommunications CC.The telecommunications parastatal is further claiming that Ganes under-invoiced Dresselhaus Scrap to the tune of some N$184 430 between March 2000 and February 2001. This was done by deliberately using wrong exchange rates and the wrong prevailing London Metals Exchange rates for scrap metals which Telecom Namibia was contracted to sell to Dresselhaus Transport, it is claimed.


    * The Tanzanian Second National Annual ICT Projects Workshop on Thursday, 18th December 2003 has been postponed due to "unsatisfactory response."


    If our correspondent is "off the mark" or you have factual amendments, mail them to us and we will include them in subsequent News Updates. If you'd like to contribute, write and let us know.

    If you need information about a particular place or issue, just send your questions in. We are always happy to follow up on readers concerns.

    News Update is a free e-letter produced by Balancing Act that covers African internet content and infrastructure developments, It goes out to government, the private sector, education and NGOs. To subscribe, send a message saying "I want to subscribe" to

Syndicate content