Issue no 371
Mainstreet Technologies threw its hat in the ring this week to be the first to complete an African west coast fibre project to compete with SAT3. The cable will connect 12 countries, some already connected to SAT3, others not. Russell Southwood spoke to the project’s CEO Funke Opeke and discovered how it intends to win the race to complete.
Nigerian Funke Opeke spent 20 years in the USA working in technology companies(including Verizon’s international and wholesale divisions) before coming back to work for a spell as CEO of the incumbent Nitel. It was out of this that she recognised that “after two years in Nigeria how painful the infrastructure limitations were.” So in May 2007 she set out to build a new competitor cable to SAT3:”I want to do something for the region and this cable makes good sense both in commercial and development terms.”
Dubbed MaIN OnE, the cable will connect the following 12 countries: Morocco, Mauritania, Senegal, Guinea, Cote d’Ivoire, Ghana, Nigeria (Lagos and Port Harcourt), Gabon, the DRC and Angola. There is an option to extend the cable to South Africa if the Government there changes its attitude to external operators:”We’ve been a little disappointed with the South African Government’s attitude.”
The project is currently budgeted at US$300 million and Opeke is out “pounding the pavements” looking for sources of finance. But she is optimistic:”The good news is that there is a lot of interest. There is a new capacity in Africa in general and Nigeria in particular to fund projects of this magnitude. There’s currently more interest than needed for our requirements.” The project will be African-led.
The business model is that Mainstreet Technologies will pay for the landing stations and the cable and shareholding will be open to all comers. Early equity investors will have some price advantage but it will not be significant over the life of the cable.
The cable will have a capacity of 2.56 terrabits and Opeke anticipates that prices will be 10% of current prices and it will still be profitable. Prices will drop further as capacity is sold through. According to Opeke:”We’re already talking to some of the larger operators.” The company to run the project will be set up in a couple of months time and it says it will have the cable in place by 2009.
But what of the Glo-1 cable that seems to be leading the race for completion:”The Glo-1 project is the most substantial but it has its limitations. Globacom had an advantage when the market was not fully liberalised. I would question whether its “go-it-alone” strategy will work. We want to make sure to adopt an open, wide-based approach.”
- The Botswana Telecommunications Corporation (BTC) has announced a new set of tariffs, which overall add up to a net increase in charges. As a result, while international calls will continue to fall, line rentals will increase from P60 to P75 and P100 to P125 per month for residential and business clients respectively.
- Mauritania’s Chinguetel has got 8,000 subscribers after two weeks in operation and has hit the ground running, offering coverage to 80% of the population.
- The Ethiopian Telecommunication Corporation (ETC) started issuing 1.2 million mobile phone SIM cards under the corporation's "mobile millennium project". According to ETC, over 854,000 of the newly issued cards will be distributed in Addis Ababa. The corporation will also distribute over 70,000 cards to potential customers in Shashemene, Adama, Bishoftu, Dessie, Jima and Nekemte.
-Nigeria's mobile network, Starcomms, has launched an innovation that offers customized ring tones via Short Messaging Systems (SMS) and IVR
- Econet, Zimbabwe's largest cellular telephone network operator has been granted permission to deploy its mobile payphones in Bulawayo on a trial basis.
- The Algerian cellular operator mobilis has launched a BlackBerry wireless internet device for its corporate customers. In the meantime, Algerie Telecom announced that it will build three base stations along the Algeria-Morocco borderline to increase telephone coverage.
Sudanese telecommunications company, Sudatel, has won a new comprehensive telecommunications licence to provide mobile services in Senegal and is scheduled to begin operations in January 2008.
The license which is said to be worth US $200 million will see Sudatel become one of Senegal's largest mobile operators. Sudatel won the license against 11 other competitors, including the Kuwaiti-owned Zain and Bintel of Saudia Arabia. Sudatel is set to become Senegal's third mobile operator, and is expected to compete with Senegal's two existing mobile operators, Orange and Tigo.
Besides, the Sudanese company will be allowed to provide fixed line and internet services head-to-head with France Telecom-backed monopoly Sonatel.
Over the years, Senegalese mobile market has recorded sharp increases in the number of subscribers. In March 2007, the number of mobile users in Senegal was estimated at 3.37 million, compared to 1.94 and 1.73 millions in 1996 and 1995, respectively.
Highway Africa News Agency
Speaking at the WATRA organised 1st Mobile Roaming Conference, West Africa’s regulators heard that mobile operator Celtel is to expand its One Network area and MTN is also shortly to expand its cross-border, one rate coverage area.
Celtel’s Fayaz King told the conference that by the end of 2007 15 countries would be part of its One Network plan. The third phase of expansion will include Nigeria, Niger, Burkina Faso and Chad. The fourth phase in 2008 will include Sudan and Saudi Arabia. But as King observed:”There is increasing complexity (for the network) as more countries join in.
MTN has already launched a competitor scheme in East Africa and is planning to have 9 of its operations in place by the end of September 2007. MTN’s Chijoike Obuna noted that MTN has more operations in Africa than Celtel, particularly in West Africa. However, the scheme will not bring on pre-paid users until January 2008. After Africa, it intends to extend the scheme globally starting with its other operations outside Africa.
Etisalat has acquired a 45% share of Sudan’s fixed line market (196,000 subscribers) in just two years and is preparing to carry out a feasibility study into further expansion across the whole of this huge country.
The CEO of Canar Telecommunications Ali Bin Jarash Al Ghufli said that Canar's operations in Sudan said that it currently covers 24 Sudanese cities and plans to expand to 33 by the end of the year: "But our final goal is to cover all of Sudan's cities and villages. Plans are underway to expand Canar's network to all parts of Sudan, but this is pending a feasibilty study."
Canar recently celebrated the launching of its linking station with Flag Falcon, the international undersea cable project. He added that the sea cable links India and six Gulf Cooperation Council countries as well as Iran, Yemen, Egypt, Sudan and Iraq.
The Benin based mobile operator, "Moov" is reported to have resumed services in the country after its license was suspended by the regulator in July. The Areeba/MTN network is understood to still be suspended. Both operators have been accused of breaking their operating licenses by changing their brand names, and the regulator was using the opportunity to massively hike the cost of the licenses before it would allow them to resume services.
The African news agency, PANA reports that Moov has signed the new conditions of contract and committed itself to respecting the provisions, including the increase in the licence fee from FCFA 5 billion to FCFA30 billion over a 10-year period.
Speaking at the company's recent results conference, MTN CEO Phuthuma Nhleko said discussions regarding the company's operations in Benin were continuing with the government, although the network remains turned off. He said that "we don't believe what they are asking for is appropriate,"
Benin currently has four networks in the country, with a total of 1.33 million subscribers - although that represents a population penetration level of just 16%.
On 8 September 2007, MTC, the Africa and Middle East mobile network operator and owner of Celtel, presented its new brand identity, Zain, in Bahrain, writes Andrea Bohnstedt. ‘Zain’ translates into ‘nice’ or ‘beautiful’ in Arabic, and the brand identity ‘Zain’ had been developed in a meticulous 18-month process with keading consulting firms and advertisers. It has also been subjected to a rigorous process of testing with consumers and was found to evoke positive connotations not only in the Arab region, but beyond. In the launch, Chief Operation Officer, Dr. Saad Al Barrak, emphasized the group’s intention to combine its Arab roots with an ambitious global outlook. Zain represents the company’s intention to take the group global, and connect its customers to the rest of the world. “We are proud of our Arabic heritage, but we don’t want to be imprisoned by it”, says Dr. Saad Al Barrak, who heads what is now the largest private company in the Middle East.
MTC’s operations have expanded exponentially in just a few years: From being a single operator in Kuweit in 2003, newly branded Zain now has over 32 million customers in 21 countries. Zain aims to consolidate the various Middle Eastern operations under a common identity, and the change will become effective immediately for the group’s Mobitel in Sudan, Fastlink in Jordan, and MTC-Vodafone in Bahrain and Kuweit. The new operation in Saudi Arabia, for which the license had been awarded in July 2007, will also start up as Zain in early 2008. Iraq’s MTC Atheer will be rebranded as Zain in the near future.
Given the diversity of former MTC’s Middle East brands, the introduction of a unified brand identity in a rapidly expanding company is an obvious step. However, a key factor in the group’s expansion has been the acquisition of Celtel, which added mobile operators in 14 sub-Saharan countries to the portfolio and represents over 70% of the group’s operations. Its brand equity, i.e. the value of the brand itself, is estimated at over US$1 billion. Celtel has underpinned its strong brand identity across the continent with the integration of its networks through the cross-border ‘One Network’ that removes all roaming charges for Celtel connections and effectively gives Celtel customers the benefits of a domestic network across country borders. Kicked off in the East African Community (EAC), i.e. Tanzania, Kenya and Uganda, the network has now been expanded to include six countries, and the addition of one of Africa’s largest markets, Nigeria, is envisioned soon. The market unsurprisingly questions the value of abandoning this strong brand in favour of a new one that has yet to be filled with life. In addition, two Celtel operators in sub-Saharan Africa, Kenya and Nigeria, had just undergone a rebranding process after Celtel took over existing operators, and this is bound to create further confusion for customers.
In the press conference to launch Zain, Al Barrak was emphatic that Zain will supersede all previous brands in the group. However, Tito Alai, the Group’s chief commercial officer, was more cautious. Zain will be the group’s new face towards investors, capital markets, regulators and other actors, but this does not imply that the Celtel brand will be phased out with immediate effect. “We will do what is right for each market,” he emphasises.
The discussions in the Zain launch press conference certainly showed that Arab observers expressed reservations over what is perceived as the group’s globalised outlook, citing fears that it would loose its Arab roots. These concerns as well as the fact that Celtel was created as an aspirational brand to speak to Africa’s emerging middle class – ‘Making Life Better’ ‑ show that extending the brand Celtel to the Middle East operations would not have been advisable.
Although Alai, who is not just the architect of new Zain, but also the brain behind the creation of Celtel, is confident that the brand Zain should work just as well in sub-Saharan Africa as it will in the Middle East despite its Arab origins, he indicates that Zain has not yet come to a final conclusion how to deal with the group’s African members, and will continue to assess its options. It appears that Zain has also not yet come to a final conclusion whether new acquisitions in sub-Saharan Africa will immediately rebranded Zain or Celtel. Another Africa-specific concern, however, could be put to rest: Given that in many towns and villages, entire buildings are painted in the colours of competing mobile phone operators, the new Zain logo’s dark background would have suggested a fairly sombre outlook after Celtel’s bright red and yellow. So the fact that Zain’s key colour will, in fact, be the turquoise green of the swirling logo and that the logo will also be used on a light underground should provide a more cheerful outlook for local construction.
- Etisalat Egypt has revealed that it expects to begin offering international calls from next month. According to CEO Salah Al Abdooli, the company expects to reach a deal with the Communications Ministry this month which will end Telecom Egypt’s (TE's) monopoly on international calls. UAE-based Etisalat owns 66% of Etisalat Egypt, the country’s newest cellco which launched in May this year.
- UK consultancy Interconnect has almost completed its interconnect study for the Ghanaian regulator NCA and the operators. The latter seem to be broadly happy with the findings that are emerging. Informed sources say that it could lead to lower interconnect rates.
- Globacom has been all but promised a licence by the Ghanaian Government but it has told the Nigerian operator it must go through due process. In case bidders need to know the bidding expectation, the sum appears in the Government’s budget. Globacom is also seeking a licence in Togo.
- Senegal’s regulator ARPT is looking to implement number portability. The Government is pressing it to do this by the end of 2007 but the regulator anticipates implementation by Q2 2008.
- Celtel’s parent company MTC changed its brand name to Zain (see full story on our web site).
Communications Minister Ivy Matsepe-Casaburri announced that no undersea cable will be allowed to land in SA and provide cheaper broadband unless it is majority owned by local or African investors. It is not clear how this condition squares with the Government’s wider commitment to liberalised markets. The move has also prompted Seacom to pull out of building its proposed East African cable and is everything that detractors of the South African Government feared would happen.
The South African move is designed to get EASSy to fall into line with the NEPAD Protocol, of which the South African Government has been the strongest supporter. The industry awaits a final set of guidelines from the Ministry. The South Africans have already led moves behind the scenes to try and get the region’s incumbents to withdraw from the EASSy project.
Telkom, Neotel and MTN together own 27% of the 10000km Eassy cable. But that will only be sufficient to let it dock in SA and give the three operators the bandwidth they are paying for if the minister decides that African investors - rather than purely South African - are sufficient.
As an industry analyst pointed put in Business Day it was impossible for every country where a cable landed to insist on majority local ownership, as numerous countries would be clamouring to control a limited percentage of shares.
"It's not exactly conducive to creating an environment for investment," said another.
There is the familiar confusion in the South African Government’s mind between its national interest and the interests of the rest of the continent. For it is now supporting the doomed NEPAD project to build cables up both the west and east coasts of Africa, something that will only happen with South African Government money. All of this clears the way for the Kenyan Government’s TEAMS project to slip through the middle of this mess and be the first to complete.
The West African Telecommunications Regulators Assembly (WATRA) held a two day conference last week to look at how its members might address the issues raised by the SAT3 monopoly.
The conference heard Abi Jagun of APC and Ben Akoh of OSIWA present four country case studies that showed that rates were being kept artificially high, varied enormously between countries (on no clear basis, geographic or otherwise) and that the development of local markets was being impeded by these high prices.
A regulator from one country revealed that the incumbent operator of its national monopoly had refused to provide capital and operating costs, making it difficult to address price issues. Benchmarking was suggested as an alternative to a cost-based approach given these difficulties.
Another country’s regulator said every time it sought to address pricing issues with the monopoly operator, the Government leapt to the incumbent’s defense as it was shortly to be privatised. However, Ghana’s regulator NCA is to offer an international gateway licence in Q3 207 to those wanting to offer an alternative to the SAT3 fibre and as this week’s Top Story shows, there will be those willing to take up this offer.
Regulators listed the following issues they wish to address: transparent pricing; creating a regional regulatory regime for oversight of international fibre; access for landlocked countries; new service provider access; country-level adoption of the ECOWAS protocol; competitive access for the establishment of new facilities; and ECOWAS participation in inter-member dispute resolution.
-Tunisia’s schools are about to be connected to the Internet in an ambitious TD17 million to purchase 900 additional computer laboratories and give all schools a broadband connection.
Some 846 additional computer teachers will be employed. Computer classes are compulsory at the 7 th , 8 th and 9 th year of basic education.
- The fibre from Niger’s capital Niamey has been completed up to its border but the Burkina Faso stretch to Ouagadougou has not yet been completed.
- The African Development Bank (AfDB) is to provide a US$ 14.5 million loan to the East African Submarine Cable System (EASSy) project expected to cost US$235 million dollars. The bank announced that the financing will be channeled through the cable's Special Purpose Vehicle (SPV) that is also known as the West Indian Ocean Cable Company.
- Jigawa State Government in Nigeria has concluded arrangements to pay the nearly N50 million accumulated debts it owns to Galaxy ITT in a move aimed at restoring its IT backbone. The service was suspended a month ago by the service provider based in America as a result of the accumulated none settlement of monthly subscription fees.
- Redline Communications announced IBN Corporate chose Redline's RedMAX products for the firstWiMAX network in Gabon. IBN Corporate launched its WiMax services tobusinesses and residents in Libreville, Gabon on the 27th April, 2007 and willextend its network to serve Port-Gentil and Franceville in Gabon in October
2007 and January 2008.
- Algeria’s internet service provider Djawed has launched ADSL2+ with up to 10 MB bandwidth.
East African cellphone company, Simba Telecoms last week introduced an innovative local money transfer service in Uganda. The system, developed by Cape Town-based Jeshurun Consulting, was built using a variety of open source tools.
The new service, Simba cash, aims to overcome the challenge facing much of the population in Uganda that banks are often inaccessible to rural communities, both through geography and cost.
To use the money transfer service, customers can visit any of the Simba Telecoms branches across Uganda to deposit money. The customer is then given a password which is forwarded to the recipient of the money. The recipient can then take their identification and the password to any other Simba branch to collect the money.
Tectonic spoke to Wayne van der Merwe, Jeshurun's development manager, to find out what open source software was used in building the system.
Van der Merwe said: "The application was developed with an open source Integrated Development Environment from SUN called NetBeans. The language used to develop the application [Java] is provided by SUN and has been open sourced. Finally the application server that the application is deployed on is GlassFish which is also open source."
Simba Telecom group chairman Patrick Bitature said: "Unlike the other bigger banks and money transfer services, we are trying to focus on the non-banked local populations, with a key focus on addressing affordability issues, that have kept many people from using conventional money transfer services."
Transfers will be charged an average of 4 percent. Simba Telecom decided to offer this service to rural areas in association with USAID's Rural Savings Promotion and Enhancement of Enterprise Development (Rural SPEED).
Re-using computers in African schools can provide more benefit than recycling
Energy efficiency advisory group Eaga is sending its old IT equipment for reuse in developing countries in Africa rather than shipping it to the recycling plant. The EU Waste Electrical and Electronic Equipment (WEEE) directive that came into force in the UK in July requires firms to dispose of electronic goods responsibly.
But experts have criticised WEEE for emphasising recycling only. And United Nations (UN) research says passing on a PC for someone else to use is 20 times more effective at saving lifecycle energy. Sending equipment overseas makes more sense for everybody, said Eaga organisational development director Dave Routledge.
‘The need for modern computers and IT equipment is huge, and there is a growing environmental responsibility for all of us to reuse wherever possible,’ said Routledge.
Eaga will be dispatching hundreds of laptops, monitors and PCs via charity Computer Aid International in the coming months. Since 1997 Computer Aid has shipped in excess of 90,000 PCs to more than 100 developing countries.
The Shuttleworth Foundation has announced its support for the decision by the The International Organisation for Standardisation (ISO) to reject the Microsoft-driven bid to fasttrack the OOXML document format as a second official standard.
The foundation's intellectual property fellow, Andrew Rens, explained the key reasons as being that the OOXML format is proprietary and that it would impact negatively on open access to have a second standard when the community-developed Open Document Format (ODF) already exists as a recognised standard.
Rens explained: "The use of two different document standards by governments, for example, would create a barrier to citizens being able to effectively access government information. It would also hinder the general sharing of information because it would create technical difficulties for people using different formats."
Rens added that the Microsoft-developed OOXML format was not fully open.
Rens explained that prior to the ISO ballot closing on 2 September 2007, a technical sub-committee of the South African Bureau of Standards (SABS) rejected the standard by 13 votes to 4 and resolved to recommend that South Africa should vote against the adoption of OOXML as an international standard.
The proposed standard was rejected for various technical reasons, including concerns about possible intellectual property rights claims against those implementing OOXML. "OOXML is based on proprietary software," stated Rens.
- Achievement Awards Group, a South African motivational organisation, has implemented the open source voice over IP solution, Asterisk, to upgrade the capability of its specialist call centre and to react quickly to the needs of clients.
- Egypt wants to become a major player in the call centre sector, reported Gulf News. A study by consultancy firm AT Kearney put Egypt 12th on the list of countries with customer contact centres. The country is keen to challenge India in the outsourcing sector and currently has six large call centres.
Kenyan newspapers have embraced the internet and increased their sales with innovations such as sending headlines by SMS to readers. Nairobi has also become the hub of an ambitious project to digitise all sub-Saharan newspapers.
Field director of the Library of Congress Office in Nairobi, Pamela Howard-Reguindin, told the recent World Library and Information Congress in Durban that the managing editors of Kenya's main papers, the Daily Nation and Standard "realise they must adopt new technology or fall into oblivion as has happened with some of their competitors".
Despite limited access to the internet by Kenyans, the two dailies and a Swahili newspaper, Taifa Leo, have used online editions to increase sales of both electronic and print versions. The key to this success has been the production of "born digital" items - first on the net and then in print - as well as marketing innovations.
Text teasers and headlines are sent to SMS lists and e-mail addresses. Now the Nation Media Group is to launch a "born digital" publication, Business Daily. Deals have been struck with NewsStand and NewspaperDirect to increase sales and RSS feeds.
"Both newspaper editors report that sales of online and hardcopy issues are growing," says Howard-Reguindin. "The Daily Nation is working on a new website Nation Digital that will include text messages via mobile phones, online news/chat rooms, RSS, and specialised services such as sports scores, stock prices, and horoscopes."
The Standard is getting about 3 million hits a day for their website, "most from outside Kenya, but a steadily increasing number from within the country as internet access penetrates more Kenyan businesses, schools and households".
Meanwhile, the US Library of Congress office in Nairobi is racing against time to digitise the newspapers of 29 sub-Saharan newspapers that are crumbling to dust in archives across the continent.
The project started with a "computer-based index of the articles published in the major Nairobi newspapers from 1980 onwards covering the cultural affairs of this country, mainly music, dance, theatre, literature and art", overseen by Ruth Thomas, a noted Nairobi librarian.
"Subsequently the topics expanded to include reproductive health, law/governance affairs, and various others.
"Hundreds, if not thousands, of newspaper titles from some 29 sub-Saharan countries have already been microfilmed and dozens more are being filmed on an annual basis by the library and its office in New Delhi, India.
"In spite of this laudable work, many more newspaper titles and corresponding issues remain in our ever-growing backlog," says Howard-Reguindin.
Ten sub-Saharan titles are being sent to the library in Washington, DC for treatment (www.loc.gov/acq/ovop/nairobi/lc_npapers.html for the list).
At the library's office in New Delhi several cameras and camera operators are working overtime to film as much as possible of another 115 titles.
"One possible role of Kenyan librarians would be to encourage the newspaper managers to offer internet access to full content of the articles free to Kenyan schools and universities."
This "could be a role for any national African library association. Many journal publishers located in the US and Europe are now allowing internet users in developing countries to access full content of journal articles without charge".
"If this open access could be offered to Kenya newspaper readers, the information in the daily press could strengthen efforts in governance and democratisation, literacy and responsible civic leadership," says Howard-Reguindin.
The poor penetration of Internet services coupled with low levels of computer literacy in Kenya are holding back the country’s emerging data vending industry.
The data vendors, who sell and distribute financial and business news, are targeting rural populations as well as Kenyans in the diaspora.
Mr Bildad Kagai , the managing director of data vending firm MediaCorp Limited, told the Business Daily that while data vending has the potential to be a major industry in the financial services sector, more needed to be done to ensure computer services reached majority of the people.
“Kenyans, especially those outside Nairobi, have been waiting eagerly for the Real Time data, but inability to access the Internet remains a big challenge,” says Mr Kagai
He said traders did not have to physically go to the bourse to get financial data, but they could do this in the comfort of their offices through the Internet. He said the highest potential for growth in data vending was in rural towns and that lack of Internet services was limiting the uptake of online financial news and data.
MediaCorp earlier this month launched its data vending services in Mombasa to increase its presence in the country.
Symon Ndirangu, the chief executive officer of Information Convergence Technologies ICT Ltd, says that with the signing of an average of 50 to 100 new users every month, most of the six data vendor currently operating in the market should break even within the next 12 months.
“Although it is taking time for many investors to appreciate the value of data, we are upbeat that revenue will pick up very soon.”
Currently, the cost of a data vending license from the NSE is valued at Sh170,000 (US$2500) while ISPs are charging about Sh50,000 per month for connection.
With an estimated Sh180,000 in other costs, data vendors are paying at least Sh400,000 a month or Sh4.8million annually to stay afloat.
Ndirangu however projects that with the developments in the ICT sector as well as the Capital Markets, the data vendors should have at least each have 10,000-20,000 customers utilizing their services. At an annual charge of Sh5000 per customers, data vendors could easily rake in Sh50 million in a year.
Mubadala Development Company, the UAE-government owned company that got a Nigerian GSM licence for $400 million earlier this year has simply sold on 40% to Etisalat who will actually operate the licence.
Both companies announced at the weekend that they have sealed a deal for Etisalat (former Emirtel) to operate the license ending months of intense speculations over the choice of operating partner for the Middle East company that was issued the nation's fifth GSM licence by former President Olusegun Obasanjo. Former chairman of United Bank for Africa, UBA, Hakeem Belo-Osagie is believed to be among the key Nigerian investors in the telecom business.
Under the deal, Etisalat will be the operating partner and hold 40 per cent interest in the telecoms company established by Mubadala to own and operate its telecommunications business in Nigeria. Mubadala will now hold 30 per cent interest in the company and the remaining shares are held by Nigerian investors.
When both parties conclude ongoing negotiations, they hope to forward the final agreement to the Nigerian Communications Commission (NCC) to ratify the change in ownership in the standard oversight that the telecoms regulator exercises over licensees. The regulator had said that the Mubadala licence was awarded to Emerging Market Telecommunic-ations Services Limited.
While a commercial launch target for the Nigerian service has been slated for March 2008, the transaction will raise Etisalat's addressable market to 600 million potential customers, an increase of 30 per cent.
Local Internet service providers are earning higher revenues signalling increased use of the web among consumers, industry statistics show. The data indicate that average revenue per user (ARPU), a measure of how each user spends on internet access, has risen to an all time high of $600 in some segments of the market, up from an average of $500 last year.
Globally, ARPU is used as a measure of how much money a service provider makes from the average user and enables the ISPs to make revenue projections as well as determine which products are earning most revenues. It also provides an accurate picture as to what services and products are popular with consumers in certain segments of the market.
"Most ICT firms, however, have indicated application of cost leadership strategies, resulting in lower ARPUs with the intention of raking in higher subscriber number," said Shida Mutuku, the group head of marketing at Africa Online.
The pan-African ISP, which is changing focus from being a pure ISP services company to a supplier of comprehensive IT services, says demand for ICT products is rising across the board.
ISPs can maximise on their resources by using ARPU data to their advantage. ARPU can also be used as a measure of how successful a company is in moving users to new services that are regarded as strategically important.
Citing steadily increasing revenues from its broadband product, AccessKenya Group hopes to realise its projected revenue target from customers looking for better speed and capacity from their internet connection.
Last week, AccessKenya said it was on track to realising an ARPU average of $540 owing to increased number of large customers coming on board and many existing customers upgrading their bandwidth.
The ICT company, which recently announced that it had realised its customer target of 1,720 four months ahead of schedule, says its current ARPU is underpinned by the strength of its Broadband Max 2 leased line solution that has become popular with the corporate market.
"Broadband Max 2 offers a quadruple downlink coupled with high reliability evidenced by a 99.8 per cent Service Level Agreement," said Jonathan Somen, the managing director of AccessKenya.
"We are the only ISP offering this sort of solution in the Kenyan market and have realised significant increase in demand over the past six months," he said. Somen said AccessKenya had set a new target of enrolling a minimum of 1,900 leased line customers by the end of the year, and has been reinvesting some of its profits from increased customer numbers to build up sales and customer service teams.
Africa Online refused to reveal its current ARPUs but said it was targeting ARPU of $1,000 per use by the end of the year. The ambitious target is based on increased demand for corporate leased line solutions and increased take up in the residential user market of the wireless broadband product, Infinet.
Mobile billing is coming of age but not without some growing pains. It opens up the world of micro-payments yet consumers are paying extra for download costs, even when unsuccessful, and they are unable to get refunds.
"The mobile industry needs to make every effort to boost consumer confidence in mobile billing. Clearer pricing and refunds on mobile content are good starting points," said Dr Pieter E. Streicher, managing director of BulkSMS.com, a service provider of SMS messaging services.
Mobile network operators can bill millions of people for small amounts of money via their cell phone regardless of their location. Internet access providers, on the other hand, have lost out to this opportunity as billing on the Internet is mainly done through third parties such as Visa, Mastercard, Paypal, and Moneybookers.
"Already mobile billing is used on a large scale for TV voting, mobile content downloads and social networking services. Mobile network operators can link a low value transaction to a cell phone number and then bill against a subscription or pre-paid airtime contract," said Dr Streicher.
Yet, inefficient message delivery has resulted in consumers demanding billing transparency. For example, in India riots erupted in June 2007 as votes for the Indian Idol TV show were billed for but not counted by the show. In the United Kingdom, the reality TV programme Big Brother dropped SMS voting in mid-2007 as they were unable to guarantee all viewer votes could be counted.
Consumers also view the buying of mobile content (such as images, ringtones, video clips, and wallpapers) as problematic. Consumers are billed separately for the mobile content and the downloading of that same content.
According to Dr Streicher, the downloading cost can vary significantly depending on the size of the content. Then, even if the download is unsuccessful, the consumer is billed for the mobile content.
"It is no wonder that consumers are confused with how mobile billing for data services actually works. This is further compounded among pre-paid customers who have little no monthly itemised billing to double-check their cellular payments. Their airtime is simply deducted," said Dr Streicher.
In Dr Streicher's view further steps can be taken by industry to ensure that consumers are sure of the cost of purchasing mobile content.
Mobile network operators should enable wireless application service providers (WASPs) to reverse charges. Currently, WASPs can only bill consumers for services.
Mobile network operators should enable WASPs to pay for content downloads on behalf of consumers. This means that the bandwidth cost for downloading mobile content is included in the content charges. The risk of mobile content downloads is then carried by industry and not consumers.
These changes will offer benefits to consumers by allowing WASPs: to advertise one price for mobile content in the media; to offer a money back guarantee on any mobile content purchase; and provide free opt-out messages to unsubscribe from unwanted mobile services.
"This will greatly reduce the need for elaborate terms and conditions for advertising mobile content services and boost consumer confidence in mobile billing," said Dr Streicher.
"A serious blogger who is interested in making business can click to 'Linked In' site that is basically for business people, it has got a bandwidth of 178.51 MB, 2453 regular visits and 1 675 unique visits," says Ramon Thomas, specialist in translating global online trends into meaningful insights in South Africa.
He said Bloggers can become experts through five steps that include reading one or two books per week and between 70 and 80 per year for new knowledge.
He told participants at a workshop on Money and Marketing held the Highway Africa conference that bloggers should identify and interview various experts, participate in online discussions and other fora.
"You need to write in-depth articles for the web and think of how to become a blogger of a particular niche," he said.
He said bloggers can also become experts not only through accuracy and intelligence but also need to improve on their sites and be consistent.
"You can also utilise the Steve Parlina.com site that shows you how to make money using a blog,"
"Making more money as spin offs from your blog includes freelance writing and signing in to tertia.org, a site run by Tertia Albertyn with 27,000 visitors per week, it has got interesting information," said Laurian Clemence, the author of Peas Toast, an award-winning South African blog.
She said that a blog is deemed to be successful by its number of readers, repeat and regular readers. "Profits can be made from advertising, sponsorship and indirect revenue, don't only look at the obvious streams of revenue as there are unexploited opportunities," she said.
Mail and Guardian Online general manager Matthew Buckland said that South Africa's big websites attract almost 8.1 million readers and advertisements worth R180 million. The types of advertisements include banners, sponsorships, classified advertisements, jobs, contextual, links and advertorials.
South Africa's blog sphere has got 25,037 active blogs that generate 621,204 user sessions but you can cash in through influencing purchasing and decision making.
- Celtel Uganda is to invest Ush70 billion ($40 million) in its network expansion project. The money will be sourced from a $40 million loan advanced by International Finance Corporation (IFC). In the expansion, Celtel will roll out additional sites that will see its coverage increase to 90 per cent.
- Transcentury Limited (TCL), a Kenyan-owned investment group acquired Kewberg Cables & Braids, a South African firm and ABB Tanelec, which is based in Tanzania.
TCL has bought 100 per cent of the shares in the South African firm and 70 per cent of the Tanzanian firm. The South African acquisition is expected to give TCL a significant exposure to a much bigger electronic components and instrument market .
- According to Rwanda’s “New Times” Celtel , Vodacom, Lap Green Network, Bitmap from Libya and Vitel Holdings from Hong Kong have expressed interest in buying Rwandatel, the renationalised Rwandan incumbent.
- MTC subsidiary Celtel International, announced that Lord Simon Cairns has been appointed Chairman of the Board after Dr. Mo Ibrahim resigned.
- CAPACITY AFRICA 2007
10-11 September, Cape Town, South Africa
Capacity Africa 2007 provides a forum for providers from across Africa, along with the international carriers and service providers to meet and discuss the new business opportunities in the liberalising African markets including South Africa, Nigeria, Ghana and Botswana. With an extensively researched programme providing high quality content, senior level speakers and attendees, and lucrative networking opportunities, Capacity Africa 2007 is the premier pan-African wholesale telecommunications congress.
-SATWIBB AFRICA: AFRICAN SATELLITE & WIRELESS BROADBAND CONFERENCE & VOIP FORUM
West Africa: Muson Centre, Lagos, 17-18 September 2007
Theme: "Broadband bridges across Africa: First and last mile solutions"
Local and international industry leaders will make presentations on the following topics:
Efficient bandwidth delivery mechanisms
Next Generation Networks: Selecting the right migration path
Building wireless communities
Fiber optic vs. satellite-based connectivity: Do they compete or do they complete?
DVBS2: Its role in trunking
Rural Wireless: The role of WiMAX, WiFi, CDMA and hybrid technologies
VoIP survival strategies for telcos, ISPs and cyber cafes
Build vs. buy: VoIP solutions for Africa
Providing a VoIP service over a WiMAX network
Maximising international VoIP services
The event also includes a Masterclass on Building Wireless Communities by Paul Munnery, CEO, Wireless Digital Cities, UK
- ICT AFRICA 2007
October 1-5, 2007, Kenyatta International Conference Centre, Nairobi, Kenya
ICT Africa is an annual continental information and communications technology conference addressing all aspects of ICT development in Africa. The conference is convened by NEPAD council in collaboration with the NEPAD Kenya secretariat. The 2007 event will be organized by Global Conferences, Cape Town, South Africa.
- INFRASTRUCTURE PARTNERSHIPS FOR AFRICAN DEVELOPMENT (IPAD) CENTRAL AFRICA
3rd - 5th October, Kinshasa, Democratic Republic of Congo
iPAD Central Africa 2006 provides an opportunity to network directly with key partners. The event aims to facilitate regional planning and collaborations under one roof between government, the public sector and business. iPAD Central Africa 2006 is a one-stop-shop for investigating investment opportunities in DRC and the Central African region as a whole.
- The EuroAfrica-ICT initiative upcoming events.
8-9 October, Gaborone, Botswana
11-12 October, Yaoundé, Cameroon
The EuroAfrica-ICT initiative is organising its 5th and 6th awareness workshops in sub-Saharan Africa (,). These workshops specifically aim at supporting the development of a deeper and broader Scientific and Technological cooperation between the European Union and sub-Saharan Africa in the ICT sector.
UTL and Alcatel-Lucent - Uganda
UTL has signed a 20m Euro (sh47.5b) contract with Alcatel-Lucent to expand its mobile network. "The network will be used during the Commonwealth Heads of Government Meeting (CHOGM), which will be held in November," said the company (utl) in a statement released recently. The agreement also includes supply and maintenance of the wireless network based on the Third Generation (3G) technology.
Nairobi Stock Exchange and Uunet - Kenya
Uunet Company won the Sh6.4 million tender beating other seven IT companies to interlink the registered stock brokers in Nairobi and the Nairobi Stock Exchange (NSE) using its Beyond Broadband wireless network and Wide Area Network (WAN) business communication solution
Mobinil and Alcatel-Lucent - Egypt
Alcatel-Lucent has announced it has secured a multi-million euro turnkey contract with Mobinil, Egypt’s leading mobile operator that will further improve the quality of the operator’s network and extend its coverage throughout the country. Under the terms of the deal Alcatel-Lucent will expand and enhance Mobinil’s network with the latest generation of enhanced GSM radio solutions.
Warid and Huawei - Uganda
Wireless licensee Warid has selected Huawei to deploy an advanced IMS (IP Multimedia Subsystem) system in Uganda. By constructing the IMS core network and integrating it with a WiMAX access network Huawei will enable Warid to offer VoIP and IP-based multimedia services.
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