Issue no 374

top story

  • Africa’s incumbent telcos have for so long dominated the discussion about where the market’s going that it’s hard to spot the moment when their ability to dominate slipped below the water line. The mobile operators are now the incumbents and as contenders for the title are seeking to secure their new-found position on the top of the heap. Not surprisingly, they are exhibiting many of the old incumbents’ tendencies towards vertical integration in the search for long-term security. Russell Southwood tries to make sense of what’s happening as they remake themselves.

    Recently a regulator from one of East Africa’s more competitive countries pointed out to me that his country’s incumbent – which has no mobile operation – now has only 10% of the customers in the market and 20% of the revenues. It was, in his words “largely irrelevant”.

    Even where the incumbent has a mobile operation, the story is not much better. For example, in an analysis prepared for Balancing Act’s forthcoming report African Telecoms and Internet Markets – Part 1: West Africa, it identifies that in 10 out of the sixteen countries under review, just three companies are emerge as market leaders in each: Celtel, MTN and Orange. Where Government-owned mobile operations (of which there are 11 out of a total of 52 operators) are market leaders, it tends to be because full competition has not been introduced: for example, Cape Verde (CV Movel), Guinea Bissau (Guinetel) and Togo (Togo Cellulaire).

    The incumbents have also been hit be the collapse in international calling rates. In an analysis carried out last year for our African VoIP Markets report, it identified a clear trend: rates to main international destinations were coming down to US20-25 cents a minute and were likely to go lower in the next two years. The incumbents may have won a few local battles with the grey market but show little sign of winning the war. In the more competitive markets, mobile rates have followed fixed rates down or have become part of wider country roaming schemes at local rates.

    It used to be that policy-makers and incumbents talked earnestly about the need to rebalance rates. But domestic rates cannot realistically be adjusted upwards enough to compensate for these international losses. For what we are seeing are competitive pressures finally sinking their teeth into the over-fed body of the incumbent. The young mobile operators have started from scratch with new networks and workforce levels that are considerably smaller than the elderly incumbents.

    Workforce levels in the old incumbents are a political “hot-potato” so no matter how bold the Government would like to be when making cuts, the decisions always are taken with a glance over the shoulder to the electorate. Management in incumbents is increasingly political with a small “p”. For how do you make substantial changes whilst dealing with a workforce accustomed to historic privileges? Talking to disenchanted Nitel managers last year gave us some sense of the mountain that has to be climbed. All of which distracts from doing business effectively.

    The only pool of light in this growing gloom has been the success the old incumbents have had with DSL broadband. Here their advantageous access to copper and infrastructure network has completely reversed the balance of power in their struggle with the troublesome independent African ISP. So much so that it has literally sucked the oxygen out of the market and led to mergers and closures. The Kenya story in Internet News below, the Cote d’Ivoire item in In Brief in the same section and our recent visit to Mali all confirm this picture.

    Being a national operator is now a distinct disadvantage in a world dominated by regional operators. There are no savings of scale at the national level: when buying network equipment and when buying bandwidth or minutes. So the only wealthy incumbent not in multinational hands – South Africa’s Telkom SA – is trying to buy itself a regional position and get into content production through pay-for IP-TV.

    The new incumbents have arrived in the lighted uplands with strong revenues and good margins made on mobile voice. Now able from this position higher up the feeding chain to survey the valleys below, they are thinking about how they can protect their market position. Understandably, they want to be able to create a position from which they cannot be dislodged by controlling access to the strategic parts of the layered market. Like Microsoft with Windows or Apple with iPod, you want to be able to get such a jump on the market so that everything competitors do subsequently is either a pale reflection of your activity or just eats away at the edge of what you’re doing. If you take the content analogy, this is the “walled garden” approach compared to more open forms of access.

    Orange is the brand offspring of former monopolist France Telecom. It has thought hard about the emerging competitive market and has decided that the formula pioneered in France, suitably reversioned for local African realities, is the way to go. Customers are not interested in the technology: you could be delivering voice and data using gas-filled balloons for all they care. They just want it to be cheap and for it to work. Their strategy draws on the ideas of the brand’s originator Hans Snook: customers don’t want to know what the kilobyte wibbly-wooper does. They want it to work out of the box. They want to feel good about your service and the nice things you sell them.

    So Orange in Africa at the retail level is introducing its Livebox product that it uses in France to sell “triple play”: the combination of VoIP voice, Internet and TV. It also can offer wireless access in the home. Because of legal restrictions, it is unable to offer the VoIP part of triple play and is struggling to get much purchase on rights to show compelling TV content. However, its main strategy is that if it’s about communications, Orange supplies it. Whether you want a fixed or mobile phone doesn’t bother them because they can supply either or both and know that one day the difference will be irrelevant. In this world, emerging disruptive technologies like mobile VoIP become just another product line.

    In most but not all countries it is adopting a “low-price, high-volume strategy” both at the retail and wholesale levels. For example, at US$1,600 per mbps, its prices are the lowest on the SAT3 system in both Cote d’Ivoire and Senegal. At a national level, the strategy is underpinned by building IP-based networks to main markets and beyond. It is ambitious to take this formula outside of the francophone countries and will emerge as a bidder for Anglophone former incumbents in the coming months.

    The home-grown continental version of this type of strategy is being pioneered by MTN and it only emerged after a fierce discussion at Board level. The company wants to be able to offer both voice and data in whatever form, particularly to its high-value customers. In order to do this effectively, it needs to build itself an infrastructure (with key elements in fibre) that will support its ability to dominate both corporate and high-value individual markets. It has decided to build some of its own fibre routes in South Africa. It has been trialling Wi-MAX in Cameroon, Rwanda and Uganda. It already has experience of running fixed operations through its SNO in Uganda. It has quietly bought ISPs in Cameroon and Nigeria and has plans to link up its mobile operations with a local roaming scheme as Celtel did before it.

    The announcement that it was in talks with Telkom South Africa brings its “softly, softly” approach into sharp public focus. A merged company or a strategic partnership is unlikely to fly for competition reasons in South Africa but elsewhere on the continent, where competition authorities are weaker, this could prove a killer combination.

    Africa’s mobile operators are not temperamentally “market-makers”. Until recently, there have been few of the kinds of competitive pressures that create this kind of inspiration. True to form, Vodacom appears to be following MTN into data markets. It has bought a share in the South African proprietary Wi-Fi technology company iBurst, although it is unclear how this will be linked into its the core business. Also to be fair, it has emerged as the winner in South Africa’s mobile data market by progressively dropping prices.

    But Celtel has thus far steered clear of entering the data game and product lines beyond the core mobile voice product. However, we note that its parent MTC (now rebranded Zain) is rolling out nationwide Wi-Max coverage in Bahrain and offering voice and high-speed Internet access up to 2 mbps. The voice service is nomadic so the user needs only one number for fixed or mobile phones.

    The desire by the new incumbents to go off and grab new markets comes from probably a number of insecurities: they know that mobile markets are likely to get more competitive as that is the steady trend across the continent; more competition will drive prices lower; therefore the question is: how do you continue to stand upright on a rolling log as it goes downhill?

    There are two potential obstacles to this new strategic approach, neither of which is insuperable but both offer real challenges. There is the real issue of what African users can actually afford. European users spend an average of 3-5% a month on mobile communications. The African equivalent is 10-20% on a much lower set of incomes. This week the Ugandan Bureau of Statistics released its Consumer Price Index and revealed that Ugandans spend more on communications than they do on food, 27.2% of the total index.

    In the almost “arms-race” style in which operators have introduced 2.5 and 3G outside South Africa, little consideration seems to have been given to this potential brick wall. All operators talk the talk about 10% of revenues coming from data (including content and SMS) but few seem to have much focus on this particular ball.

    To be fair, some part of the blame for high prices can be laid at the door of Government which seems in effect to have sub-contracted a large part of tax collection to the mobile operators and is loving it too much to give it up. But if the market is to grow so that people can afford other products like mobile content services, broadband and IP-TV then something has to give. There will be economic growth to increase wealth levels in some markets but this alone will not do the trick.

    The second challenge is that if you wish to be a new incumbent and control both the physical and transport layers, this is an expensive business. MTN’s fibre network in Uganda was financed when there were only three competitors. It was, of course, the one that brought prices down and introduced pre-paid cards but nonetheless this was before more new operators entered the market. Whilst mobile voice networks now cover slightly over 60% of Africa’s population, broadband data networks (depending on how compact the geography of a country is) only cover between 10-20%. Closing even a small part of this gap will prove to be a costly business.

    And if the new incumbents build significant network infrastructure, they will, as dominant market players, be forced to share it with other operators. They are perhaps gambling that many of Africa’s policy-makers and regulators will be too slow to spot this or to do anything to enforce their will. But the current networks of the new incumbents are not really set up for sharing except with other mobile operators.

    So in the words of the Chinese curse, may you live in interesting times…

Telecoms, Rates, Offers and Coverage

  • - The Nigerian Communications Commission (NCC) has said it expects there to be some 40,000 GSM base stations in the country by 2010, along with around 10,000 CDMA towers. At the moment, there are approximately 10,000 GSM towers and 2,000 CDMA stations.

    - From 28 September, Namibia’s MTC has been offering a new Class of Service (CoS) on Tango called Tango Special Rate. It will offer Free SMS from MTC-to-MTC numbers all day on Fridays. Any SMS’s to other networks will still be charged at N$0.40. The mechanism is that any Tango customer must call 134 and select Tango Special Rate to be migrated to this CoS. There is no charge to move to this rate plan. All other aspects of the new rate plan are based on Tango Day / Night. This means that customers migrating from Tango Standard will also receive better call rates. When the promotion expires on 30 November, customers will remain on this rate plan until or when if they decide to move again. It has also waived all migration costs between packages. This means that the N$5 charge no longer applies between any of the new Classes of Service (Tango Standard, Tango Per Second, Tango Day / Night and Tango Special Rate).

    - Celtel Nigeria's subscribers' base has leapt from six and half million to 10 million within one year of operating under the Celtel brand.

    - The caller line identification (CLI) between MTN Rwanda and Rwandatel is now operational. For years, an MTN number could not be transferred to a Rwandatel mobile phone in what the operators describe as 'technical difficulties', stemming from the different natures of technologies used by both companies.

    - Safaricom is in talks with mobile phone operators in South Africa and Mozambique that will allow its subscribers to use the service while in those countries without having to pay fees applicable to international calls.

telecoms

  • Moroccan fixed-wireless operator Wana has announced that it has signed up a million subscribers to its residential fixed line and limited mobility telephony service ‘Bayn’ in its first nine months of operation, beating all industry expectations as well as its own predictions. Saad Bendidi, CEO of Wana’s parent, Moroccan conglomerate Omnium Nord Afrique (ONA), told press in Casablanca that the stronger than expected take-up means that it may have to increase its spending on infrastructure and customer services.

    Wana (formerly Maroc Connect) paid MAD306 million (USD34.63 million) for Morocco's third national fixed line network operating licence in September 2005, allowing it to roll out limited mobility services within a 35km local area. In January 2007 the operator adopted the name Wana and a new residential brand, Bayn, to mark the launch of consumer fixed line services, which took place on 2 February. Its offering includes the choice of traditional fixed telephone or 'personal' phone.

    The latter is a limited mobility WiLL service offering urban coverage. In March, following further rollouts in partnership with ZTE, Wana upgraded parts of its CDMA network with 1xEV-DO technology, enabling it to offer high speed internet/data services. It competes against former monopoly Maroc Telecom, a subsidiary of France’s Vivendi, and Medi Telecom, co-owned by Spain’s Telefonica and Portugal Telecom. ONA owns 100% of Wana, previously owned by France Telecom (FT); in 2004 the French telco sold its stake in the Moroccan operator, then purely an ISP offering services to a mainly corporate client base under FT’s former international brand Wanadoo.

    Telegeography

  • In Ethiopia the year 2000 has just dawned – some seven years after the rest of the world celebrated the new millennium. In Ethiopia the epoch-making event is being marked by the reinstatement of the country's text messaging services after a two-year long interruption.

    The SMS ban was enforced during the political unrest that followed the highly contentious May 2005 elections. At that time, the Ethiopian government banned SMS because, it claimed, the opposition party, Kinijit was exploiting it to organise activities during the elections – just as it happens everywhere else.

    In Ethiopia, Kinijit too was particularly effective at using text messaging to mobilise its supporters and get them to the polling booths. Then, when the election result was announced the government took fright, contested what had happened and then moved quickly to shut down the SMS service to ensure the opposition party couldn’t use it again.

    Thus the last Ethiopian SMS message was sent on June 10, 2005. On its website, to this day, Kinijit maintains that the Ethiopian people were robbed of their democratic voice in the “rigged election of May 15, 2005.” Two weeks ago, the Ethiopian Telecom Corporation, the sole telecommunication service provider in the African country recommenced SMS out of so -called “goodwill” to mark Ethiopia’s millennium celebrations. As they say, "with friends like those......"

    Ironically, the official ending of the ban was announced to the Ethiopian people by, (yes, you’ve guessed it) an SMS message! How bizarre is that? It read, "[Wishing] you [a] happy Ethiopian Millennium. And now the SMS service is launched." Not surprisingly, given the two-year hiatus, few people actually knew or bothered to check they’d received the news as SMS was, until that very second, a proscribed activity.

    TelecomTV.com

  • Nigerian fixed wireless operator Starcomms has deployed a CDMA2000 1xEV-DO Rev A network in Abuja. The equipment was supplied by Chinese vendor Huawei, and enables average downlink speeds of 600kbps-1.4Mbps (with bursts up to 3.1Mbps), and 350kbps-500 kbps (bursting up to 1.8Mbps) in the uplink. ‘CDMA2000's evolution path and significant first-to-market advantage have always been its strongest points,’ said Maher Qubain, CEO of Starcomms. ‘With Rev A, mobile broadband services in Africa can finally take off. Our state-of-the-art CDMA2000 network offers Starcomms customers the most powerful and affordable experience in telephony today.’ Starcomms was awarded a unified service licence by the Nigerian Communications Commission (NCC) in August 2006, and currently has around 800,000 subscribers.

    Telegeography

  • Orascom Telecom will bid for Egypt's second fixed line telephony licence, which the government plans to sell next year, Egypt's official Middle East News Agency (MENA) said on Sunday. Etisalat Egypt, a unit of UAE-based Etisalat, has also said it would bid for the licence. ‘Orascom plans to compete strongly for the second fixed line phone licence,’ MENA quoted Orascom Telecom's Chairman Naguib Sawiris as saying.

    Minister of Communications Tarek Kamel said in late June that Egypt would offer a licence to operate a second fixed line network, ending years of monopoly by state-dominated Telecom Egypt. The second fixed line network would start operating in early 2009. Egyptian cellco, Mobinil, in which Orascom owns a 31.26% stake, said on Sunday it would also consider bidding for the fixed line licence, either directly or through a shareholder. Orascom also received a licence on Sunday to build a submarine network for international phone calls. The 20-year concession allows the Cairo-based group to build 3,850km of underwater cables and around 1,000km of inland cables for international calls between Asia and Europe through Egypt. ‘This is the first time that such a licence is given to a private-sector operator in Egypt,’ Orascom said in a statement. It said the cable network would be operational during the first quarter of 2009. The total investment in the project was USD233.8 million.

    Telegeography

  • - United Arab Emirates incumbent telco Etisalat is considering the purchase of a mobile licence in Sudan to complement its existing fixed line operations there, its chairman has said. ‘There is initial thought to consider the extending of our licence in Sudan to include mobile,’ Mohammad Hassan Omran told regional newspaper Gulf News on Sunday. Etisalat is the largest shareholder in Canar Telecom (Canartel), which launched Sudan’s second fixed line network in January 2006. The operator currently provides voice, data and broadband internet based on next-generation network (NGN) and CDMA technologies. Etisalat has the option of extending its licence to cover mobile services without the requirement to participate in an open bidding process, said Omran. The operator’s current NGN in Sudan leases capacity to other telecom operators such as Zain (formerly MTC Group) and MTN.

    - Telkom Kenya is being offered a nationwide wireless licence to complement its fixed line concession. Earlier this year the firm launched a CDMA-based fixed wireless service which it said was to extend the reach of its wireline network, but the country’s two mobile operators – Safaricom and Celtel – complained that the new network was actually competing against their GSM systems and that Telkom should therefore pay a cellular licence fee. Telkom will pay KES3.9 billion (USD57 million) for the concession, equalling the fees paid by Safaricom and Celtel. A 51% stake in Telkom is being sold by the Kenyan government and the new strategic investor will be required to pay for the cellular licence on top of the KES5.6 billion price for the majority stake.

    - Comium Gambia Limited, has filed a civil suit at Banjul Magistrates' Court against Pa Ebou Sanneh, the APRC Banjul Youth Divisional Mobiliser. Comium is claiming back the sum of two hundred thousand dalasis (D200, 000) which it paid to Sanneh as rent for a property for which he had no legal ownership as he was a mere licensee.

    - Ms Mawuena Adzo Dumor, Corporate Service Executive of MTN Ghana, last Tuesday blamed the poor reception being experienced by the company's subscribers on the inadequacy of infrastructure it inherited. "This is the first time MTN has had to acquire already existing infrastructure from another brand and build on. In all the 20 other countries we operate in, we took off on a green field - from scratch so we had little or no network challenges," she said.

internet

  • The Kenyan ISP sector is consolidating, with many companies buying up their competitors and new foreign owners entering the market. Pressure on margins from the switch to DSL broadband has been one of the key drivers of consolidation.

    Gateway Online, ISP Kenya and Net2000 were a few of the casualties of the consolidation movement taking place in the market, with most of them either running out of steam in the rapidly competitive market or being bought by larger Kenyan operations.

    And then, late last year, the buying started again. This time, the bigger boys who managed to survive the rout of the earlier buying spree were the target, and the buyers were not Kenyan. In 2006, a South African firm acquired a controlling stake in Interconnect, a local Internet service provider.

    As part of the deal, IS injected Sh300 million in fresh capital in to the ISP. "There was no way we could have continued on our own. For many Kenyan grown ISPs, getting access to cheap bandwith and financing makes it harder to survive in the market," said Tejpal Bedi, Managing Director of IS Kenya. Much of the investment, Sh100 million, was set aside to upgrade systems.

    The company planned to roll-out new technologies and services, hoping to maintain its share of the corporate market by offering cost effective virtual private networks to organisations. "The only way we could maintain our market was by partnering with the South Africans and diversifying our product line, which costs money," said Mr Bedi. The acquisition was touted as part of the South African company's growth strategy to gain a footprint in the local and the greater Eastern and Central African market.

    "We will ensure the product mix is right for the Kenyan market, by deploying our proven services in Kenya," said IS business development director Ermano Quartero, at a function to announce the deal.

    The company that bought Bedi's company is one of the leading converged communications service providers in South Africa, boasting a client base at the time of the Interconnect aquisition that included 80 per cent of South Africa's top 250 listed companies.

    A few months later, the industry was abuzz with the biggest acquisition yet. The target was Africa Online, one of the largest ISPs in sub-Saharan Africa - and the South Africans were after it again. Telkom South Africa eventually won what was an acrimonious battle for the Kenyan-born company.

    "With the decline of the voice market we are extending and defending our core profitable services. This acquisition fits that objective," said Africa Online's new Chief Executive Officer John Joseph.

    Telkom SA has plans to invest Sh300 billion over the next five years in projects aimed at gaining the company a foothold in key African markets.

    Formerly the giant of the Kenyan ISP industry, the South Africans took on a company that was cash-strapped and had struggled with periods of losses over the last few years under it ownership by London firm African Lakes.

    The situation may get worse for the few small ISPs still fighting for market share. Smaller ISPs have traditionally been dial-up providers, an industry currently being affected by a shift in consumer preference. Although over 50 per cent of users still use dial-up access, use of the service is estimated to be decreasing by 30 per cent while mobile and wireless Internet access is increasing by 40 per cent annually.

    Up from just under 4,000 users in 1996, Kenya's Internet market grew by its largest margins last year, and now includes 200,000 users. The cost of international bandwidth, still expensive and accounting for most of ISPs' operating costs, has largely limited more rapid growth.

    Business Daily

    Correction: Our apologies to Nairobinet who were listed as one of the casualties of the consolidation in the Kenyan ISP sector. They are alive and kicking and can in no way be described as a casualty.

  • Uganda Telecom has won a contract to build a wireless internet command post worth sh142m in preparation for the Commonwealth Heads of Governments Meeting (CHOGM).

    Hans Paulsen, utl's chief commercial officer, said the wireless network will be installed and maintained basing on the Third Generation Technology. The firm will also enhance its services with higher quality mobile, voice and high speed broad band data services. "The improved robust network will be able to adapt efficiently to the growth in traffic and offer various services which will make utl network more reliable during CHOGM and after," Paulsen said.

    New Vision

  • Number of Internet registration in the country grows to about 3,000, the Internet Registration Association (NiRA) has said.Nigeria got the authority to operate its own domain registration body early this year at a formal hand over of the domain registration by Randy Bush former Internet registration agent for Nigeria to the management of the Nigerian Internet Registration Association.

    Just within few days with its existence the association said the number of domain names in the country in now over 3,000, the chairperson of NiRA and chief executive of Amsco Telecom Limited, Ndukwe Kalu made this disclosure in Lagos in conversation, and said that this figure is expected to reach 1 million in the next 24 months. He noted that before the coming of NiRA management team in May this year, the number of domain names in the country was less than 1,000.

    Daily Trust

  • - South Africa’s Unwired magazine has changed its name to Digital Life to avoid confusion that it is about wireless applications.

    - The Ivorian Group SIFCA has decided to pull out of the ISP business and has sold is subsidiary Comète to another ISP, AFNET.

    - Thousands of fake cheques worth some $16.2m have been seized in an attack on international e-mail scams. The cheques, offered as prizes in exchange for a fee and destined for the UK, were recovered in Nigeria by the Serious Organised Crime Agency (Soca). The month-long investigation into the fraud uncovered more than 4,500 forged and fraudulent documents. UK officials are working with agencies in the USA, Holland, Spain and Canada to tackle "mass marketing fraud". A handful of people have been arrested in the UK with almost 70 more held overseas.

computing

  • The combined Personal Computer (PC) markets of the West African countries of Nigeria and Ghana jumped nearly 14% in volume on year to reach just under 250,000 units valued at almost US$230 million in 2006.

    According to a recent study from IDC released last Monday Monday, falling average selling prices (ASPs) and heightened demand from businesses to integrate IT into their operations boosted PC sales. Nigeria, the economic giant of West Africa, was by far the larger PC market, accounting for more than 83% of total shipments to the two countries.

    Strong GDP growth and an increase in oil and non-oil revenues spurred economic growth in the countries, which will have a positive impact on demand for PCs in all end-user segments in the region, said Patrick Nzegbuna, research analyst, IDC West Africa. "We expect the West African PC market, which is still in its infancy, to expand by 21.5% annually on average over the next five years, with a notable shift towards mobility," he said.

    International vendors dominated the West African PC market in 2006. Nevertheless, local assembler Zinox made it to the top-three alongside Hewlett-Packard (HP) and Dell, mainly due to its strong position in the public sector. The combined market share of the top-three vendors reached nearly 48% of total shipments.

    Desktop PCs, the preferred form factor for most businesses and government agencies in the region, were the engine of growth on the West African market in 2006, with shipments of this form factor expanding 15.3% on year to account for almost 78% of total units. The notebook segment grew 11.6% in volume on year in 2006, while x86 server shipments contracted 7.8% due to consolidation in the banking sector, which is the main consumer of x86 servers in the region, said IDC.

  • Uganda looks set to join the growing list of countries offering PC purchase incentive schemes with one aimed at students and lecturers. If all goes according to plan, University students and lecturers could soon affordably get laptop computers on hire purchase for as low as $650 (Shs1million). According to a statement from Godfrey Sseruwagi, an ICT consultant in the Ministry of Education and Sports, currently in the US, there is a proposal that students would pay up for the facility over a period of at least one academic year.

    The price will not exceed US$650 but paying in installments within two to three semesters." Hon. Alintuma Nsambu, the ICT state minister said American software firms, Microsoft and Intel had joined forces to make a state-of-the-art technology specifically for Ugandan university students and professors.

    The proposed laptops will fully be installed with microsoft educational materials and wireless internet reception. Nsambu added that Cisco would also join by having all campuses of Ugandan Universities fully networked with Wi Fi technology for internet.It is projected that 100 laptops are expected to be delivered and ready for deployment in Uganda by December.

    The Monitor

  • SafariNow, an online travel agency specialising in accommodation around southern Africa, is the most recent company to announce its choice of the open source program Asterisk to improve its telephony systems.

    The company selected Connection Telecom to implement an Asterisk Internet Protocol (IP) private branch exchange (PBX) solution when it recently moved to new premises.

    Asterisk is the most popular open source PBX software and it is being adopted by a rapidly growing number of companies. In addition to the savings that the program offers by cutting out the cost of proprietary systems, it has also been a popular choice for the way in which it can be customised to solve a range of business telephony challenges.

    "The nature of our business meant that it would be advantageous to allow our staff to telecommute, but this was not possible with our previous system," said Mark Derman, technical director at SafariNow.

    "As an online operation, everything in the organisation – except for our telephone system - was already able to operate over the internet. As a result of the Asterisk solution implemented by Connection Telecom, our telephone system can now do the same." Derman added that this would allow them to implement remote staff across the country.

    According to Rob Lith, managing director of Connection Telecom, although it is a much more cost effective option, Asterisk provides a level of functionality that exceeds many of the more expensive traditional systems.

    "As Asterisk is open source-based, not only does it provide features such as voicemail, voice menus, IVR and teleconferencing, it also allows new features to be added rapidly and with minimal effort," said Lith.

    Derman explained that the ability to implement new features with ease made Asterisk an attractive option. "For some time we had been frustrated by our lack of control over the system we had been using. As a company that is technically savvy, we required a system that would enable us to have complete ownership and make changes ourselves as and when necessary."

  • - Ian Gilfillan is heading up a group of Cape Town free content advocates that have launched a bid to host Wikimania 2008, the annual conference of the Wikimedia Foundation, the organisation behind Wikipedia.

    - South African payment gateway service, MyGate, have developed a service that allows e-commerce merchants running Linux to access credit card security services that were developed for Windows platforms.

    - Tarsus Technologies has announced the signature of a distribution agreement with Logitech, making it the brand's fourth 4th distributor in South Africa.

    - Serge Ntamack, Microsoft told a local newspaper in Cameroon that 84% of the software used in the country was pirated.

Digital Content

  • Having spent years in Australia and finding that Batswana graduates abroad find it difficult to get information about employment opportunities in Botswana, Jerry Mooketsi and his friends in Australia conceptualised an idea that gave birth to Zebra Job Connect. The new Zebra Job Connect established in 2007 is an online job board that promotes careers and employment opportunities across all the industries.

    "I realised that students in Australia finished school but their future was uncertain. It got me thinking that we had people in Australia, South Africa and the UK. This was an idea that came into my mind", Mooketsi, who also doubles as managing director, explained last week when unveiling the job search engine.

    Employers will post their job advertisements that will be accessed by thousands of graduates locally and those in the Diaspora. Mooketsi revealed that the website is an avenue for employers and prospective employees to connect nationally and internationally.

    It will also try to fill the gap left by newspapers because they do not place job advertisements on their online editions. Job advertisements will be charged a minimum of P450 and could last until the job vacancy has been filled.

    The website will also cater for foreigners who will be looking for holiday jobs that might come up in Botswana.The on line job board comes at a time when another job search engine Bots.Com was launched last week.

    But Mooketsi is aware of his competitors although he is not bothered by the competition.

    "I am confident that this idea will make it easier to access employment opportunities here. It will increase a pool of people employed in Botswana", argued Mooketsi.

    Competition is healthy and it keeps people on their toes. It improves service and brings prices down", he later told Business Monitor about competition.

    On the domestic market, Mooketsi was optimistic that it would make an impact looking at the Internet penetration in the country. He was impressed that Internet usage in Botswana has increased by over 300 percent since the start of this year, reaching over 60, 000 people.

    As a way of gauging the market, Mooketsi revealed that they would be running free job advertising on the site until November 27. A statement from the company observed that the website will enable job seekers to search for employment opportunities throughout Botswana according to industry, location and salary level and apply online directly to respective organisations.

    Mmegi

Mergers, Acquisitions and Financial Results

  • The MTN Group (MTN) and Standard Bank (SBK) have announced a US2 billion loan, which Standard Bank has arranged, for the funding of MTN Nigeria's network infrastructure expansion.

    The five-year medium-term debt facility, one of the largest ever telecoms deals on the continent, is to ensure that MTN Nigeria is appropriately capitalised to meet its key strategic objectives of increasing market share and improving coverage and capacity on its network.

    The debt raising was originally for US1.2 billion and was split into the Naira equivalent of US840 million in local currency facilities and US360 million of foreign currency facilities. Due to the extensive appetite from the commercial banks, especially the Nigerian banks, the syndication was subscribed by more than 200 per cent. The syndication launched on 2 August and closed on 10 September. The upsized amount of US2 billion is split into the Naira equivalent of US1.6 billion and a US400 million foreign currency facility.

    Says Heloise Smith, Director, Telecoms & Media at Standard Bank: "We are particularly pleased to have raised a facility of this magnitude in the prevailing market conditions. The success of the transaction is testimony to MTN's standing as a blue chip borrower and Standard Bank's track record in arranging funding for telecoms operators on the continent."

    The MTN Group expects the market size in Nigeria to increase to 52 million subscribers by 2011. Earlier this year MTN Nigeria was awarded a 3G licence and expects to roll out 3G to select areas before the end of 2007.

    In December 2006, MTN Nigeria acquired 100% of VGC Communications, a private telecommunications operator (PTO). MTN Nigeria has been rolling out an ultra-modern fibre optic transmission network, one of the largest of its kind in Africa.

    Spanning the length and breadth of the country, once completed, this network is expected to ensure a dramatic improvement in the quality of service.

    Says MTN Group President and CEO, Mr Phuthuma Nhleko: "We are pleased to have secured this facility which will enable us to provide a quality network, giving MTN Nigeria a competitive advantage and also ensuring that we continue to meet the increasing demand for our services.

    "Over the years we have demonstrated our confidence in the Nigerian market through infrastructure investment, spending over R3,6 billion in capital expenditure in 2006.

    "Our ongoing investment in Nigeria remains the largest foreign direct investment in the country's telecommunications industry."

    Nhleko adds that MTN Nigeria's overriding mission is to be a catalyst for Nigeria's economic growth and development, helping to unleash Nigeria's strong developmental potential not only through the provision of world class communications, but also through innovative and sustainable corporate social responsibility initiatives.

    "This deal is another step in the long journey that Standard Bank and MTN have travelled together. We have a relationship spanning more than 13 years and have partnered MTN not only in South Africa but also in many of the African countries in which it has expanded, including Nigeria, Uganda, Rwanda, Cameroon and Zambia," says Smith.

    Standard Bank's Head of Investment Banking for Africa, Tim Thackwray, points to the importance of Standard Bank's local presence in winning this mandate.

    "The fact that we have just finalised our merger with IBTC Chartered Bank and have now become a significant player in the Nigerian market further strengthens our position."

    Standard Bank has been intimately involved in MTN's expansion in Nigeria. It assisted in arranging a US450 million syndicated loan for MTN Group, which was partially used to fund the original licence payment when MTN entered the Nigerian market in 2001.

    Standard Bank also arranged MTN Nigeria's Naira bridging finance facility in 2002, as well as co-arranged a US395 million loan in 2003. In 2004, Standard Bank raised a further US200 million for the company and in 2006, assisted with restructuring MTN Nigeria's funding arrangements.

    I-Net Bridge

  • Lap Green Networks, a Libyan company that recently bought out 69 per cent of Uganda Telecom (UTL), is among the six companies bidding for Rwandatel. Rwandatel announced recently that 70 per cent of its shares will be sold by the end of October.

    The government has emphasised that eligible bids must fulfil at least 80 per cent of the requirements established by a ad hoc committee created by the Minister of Finance and Economic Planning.

    The six bidders include telecoms giants Vodacom Group of South Africa and Celtel - Africa's third-largest cell phone company by subscriber numbers. Others are V-Tel Holdings of Jordan, Bit Map Ltd of Singapore and Rwanda's R-Com.

    Sources said if Lap Green won the bid it would operate a borderless network between Uganda's UTL and Rwandatel. Lap Green is owned by Libya Africa Investments Portfolio for Africa, a consortium set up to reorganise the interests of the Libyan government on the continent. The company, which has invested US$4 billion in cash and owns $3 billion in assets, also owns Mali's premier telecom company, Sahelcom.

    East African

  • AccessKenya Group has received approval from the Capital Markets Authority for its acquisition of Openview Business Systems. The acquisition is one of the projects the Information Communication Technology (ICT) firm is undertaking after successful IPO in May.

    The shareholders are expected to approve the acquisition for it to be formalised at an extraordinary general meeting to be held on November 5. The Group's management is optimistic they will get the shareholders' nod after receiving support on the transaction from shareholders owning more than 50 per cent of its shares.

    AccessKenya Group Managing Director Jonathan Somen said the acquisition will make the firm a "one stop ICT shop", with the ability to offer clients a fully managed end -to- end solution from every personal computer (PC) in their premises all the way to the internet. "We are very pleased to have received approval from the CMA and informal pledges of support from a number of our largest shareholders prior to the EGM" said Jonathan Somen. Last month, the firm acquired a 70 per cent stake in OpenView Business Systems which offers a range of ICT services to companies and the government. The company's current turn over is Sh200 million and the acquisition is expected to increase the Group's turn over to over Sh1 billion by next year.

    The Nation

  • @lantic Internet Services, the consumer Internet Service Provider (ISP) of leading alternative telecom operator Vox Telecom Limited (Vox Telecom), is set to buy Absa’s Internet Access business.

    The merger of South Africa’s third- and fourth-largest consumer ISPs will create a strong competitor to current market leaders Telkom Internet and M-Web, says Vox Telecom CEO Douglas Reed.

    “The deal offers real advantages for Absa’s Internet Access customers,” adds Reed. “Absa’s cost-effective service has played a pivotal role in getting thousands of people onto the Internet for the first time, and many of them are now ready to move on to a more specialised service. Vox Telecom is able to offer a much greater menu of choices including a pay-as-you-go dial-up connection, a Vox ADSL phone, three specialised ADSL offerings and the full range of iBurst and wireless internet offerings.”

    “Absa believes that it has found the best specialised ISP for its AIA customer base in Vox Telecom. Vox Telecom is a financially sound company with a compelling value proposition of services to take our customer base into the enhanced digital era,” said said Christo Vrey, General Manager of Absa Digital Channels

    Vox Telecom has undertaken to maintain or improve Absa’s current AIA offering prices for the next seven years, as well as maintaining email addresses. “Current email addresses will continue to work until 2014,” says Reed. “All customers will get new email addresses in the next two years, but we’ll continue to forward email sent to their Absamail address for five years after that. We’ll also give people the option of choosing their own personalised addresses, for example john@smithfamily.co.za.”

    Vox Telecom is due to take over the business in February 2008 and Reed says customers will experience no disruption. “We’ve had a lot of experience integrating XsiNet and other recent ISP acquisitions, and the process should be completely seamless to the customer,” he says. “There will be no changes to dial-up numbers, so people shouldn’t notice any difference except that they will have a much greater variety of products to choose from.”

    Chairman Tony van Marken says the deal, which will be paid for out of Vox Telecom’s own cash resources, is “an extremely rare opportunity we’ve been wanting for years. We’ve said we will grow both organically and through strategic acquisitions that are accretive to earnings, and Absa Internet Access is a perfect fit for us.”

    Van Marken says the acquisition of 68,000 active customers from Absa, currently the third-largest consumer ISP in the country, will strengthen @lantic’s ability to compete with the current incumbents. “We also, as a converged telecoms operator, have the ability to offer much broader services than the traditional ISP.”

    The transaction is subject to inter alia approval by the Competition Authorities.

  • - JSE-listed software company InfoWave has reported solid interim results for the first half of the 2007 fiscal year, ended 31 August 2007. The company has reported top-line growth of 5.5%, with revenues climbing to R27.4 million compared with R25.96 million in the comparable period in fiscal 2006. Headline profit for the six-month period was R3.1 million, up 16% from R2.6 million for the same period last year, while headline earnings per share grew from 3,05 cents to 3.55. The company has a strong balance sheet, and has paid out its fifth successive annual dividend. It will continue to focus on a combination of organic and acquisitive growth. ApplyIT, in which InfoWave acquired a majority share 18 months ago, registered a minor loss for the reporting period. It is very close to profitability, and having secured half a dozen new blue-chip clients in the first half year, it is expected to be a positive contributor to the group in the future. Associated company Adapt-IT, a public sector specialist, had its best year to date, growing profits by 24% and adding R370,000 to group profits.

    - Portugal Telecom (PT) has sold 90% of its stake in a non-operational wireless licensee in the Democratic Republic of Congo (DRC) to an unnamed buyer, claiming the business model it had planned for the African country is ‘no longer applicable’.

    - David Redshaw, Chief Executive Officer of Bytes, said that the group has, in line with its strategy, grown the contribution of its international component significantly during the period under review with revenues increasing to 46% from 25% and operating profits increasing to 30% from 16%.

    - Egyptian billionaire Naguib Sawiris, controller of Egypt-based telecoms holding company Weather Investments, has confirmed that he is negotiating the sale of a 10%-12% stake in the company to one of a number of interested private equity firms, which include Apax and Blackstone, reports the Wall Street Journal. Sawiris told the paper that he hopes to reach a deal by the end of the year, to raise as much as EUR1.2 billion (USD1.7 billion) to reduce debt or to pursue potential acquisitions in France (Bouygues Telecom), or Indonesia.

    - The public sale of Sh30 billion worth of Kenyan mobile operator Safaricom’s shares is on after a judge dismissed a case seeking to block it

  • - The Nigerian Communications Commission (NCC) has said it expects there to be some 40,000 GSM base stations in the country by 2010, along with around 10,000 CDMA towers. At the moment, there are approximately 10,000 GSM towers and 2,000 CDMA stations.

    - From 28 September, Namibia’s MTC has been offering a new Class of Service (CoS) on Tango called Tango Special Rate. It will offer Free SMS from MTC-to-MTC numbers all day on Fridays. Any SMS’s to other networks will still be charged at N$0.40. The mechanism is that any Tango customer must call 134 and select Tango Special Rate to be migrated to this CoS. There is no charge to move to this rate plan. All other aspects of the new rate plan are based on Tango Day / Night. This means that customers migrating from Tango Standard will also receive better call rates. When the promotion expires on 30 November, customers will remain on this rate plan until or when if they decide to move again. It has also waived all migration costs between packages. This means that the N$5 charge no longer applies between any of the new Classes of Service (Tango Standard, Tango Per Second, Tango Day / Night and Tango Special Rate).

    - Celtel Nigeria's subscribers' base has leapt from six and half million to 10 million within one year of operating under the Celtel brand.

    - The caller line identification (CLI) between MTN Rwanda and Rwandatel is now operational. For years, an MTN number could not be transferred to a Rwandatel mobile phone in what the operators describe as 'technical difficulties', stemming from the different natures of technologies used by both companies.

    - Safaricom is in talks with mobile phone operators in South Africa and Mozambique that will allow its subscribers to use the service while in those countries without having to pay fees applicable to international calls.

More

  • - The top officials of recently privatised fixed line and mobile operators Gamtel and Gamcel have been sacked by the companies’ new owners, Lebanese holding group Spectrum Group. Katim Touray, Managing Director of GamTel, and Foday Sisay, General Manager of Gamcel, have been relieved of their posts with immediate effect, according to the paper’s sources. Touray was appointed MD of Gamtel in December 2006, succeeding the former holder of the position, Omar Ndow, who is currently standing trial on charges related to economic crimes. In addition, three other directors including the deputy general manager of Gamcel, have also been sacked.

    - Tarsus Technologies has announced the appointment of Mark Campbell (from Ingram Micro South Africa) as its Lenovo and IBM general manager, following the move of Ron Keschner who will be pursuing new initiatives within the MB Technologies group.

    - A parliamentary committee accused an MP of attempting to interfere with work it was doing in connection with mobile phone company Safaricom. Justin Muturi (Siakago, Kanu), the chairman of the Public Investment Committee, named Baringo Central MP Gideon Moi, saying he went to a Mombasa hotel to attend one of their meetings without being invited. Moi of Kanu is also the chairman of the parliamentary committee on Energy and Communication.

    The MP concurred with another member of the committee, Wafula Wamunyinyi (Kanduyi, Narc), that Moi asked them why they were interfering with his business interests. Said Muturi, in Kiswahili: "It is true that the member joined us at Whitesands Hotel, where we were compiling our report, and told us: 'Mbona mnamwaga mchanga kwa chakula changu? (Why are you soiling my food?')

    - It is with great sadness we report the death of Miko Alexis Rwayitare (65) died on Tuesday last week. He died after developing complications following a "minor", routine surgery on Monday in Brussels, said a statement issued by his company, Telecel on Tuesday. Rwayitare was one of the pioneers of mobile telephony and seemed to be taking second breath and building up a new company.

    South African agency SITA saw its COO Noedine Isaacs-Mpulo resign in what the agency's head describes as a “strange manner” because it was tendered to the Chair of the Executive Committee rather directly to him.

  • IMPLEMENTING SUCCESSFUL PROJECTS- ENTERPRISE RESOURCE PLANNING (ERP) TRAINING WORKSHOP

    Safari Park Hotel, Nairobi, 18 - 19 October 2007

    This two-day Training Workshop will be presented by Vision Software of Canada, in association with In-Sync Ltd and AITEC Africa. Jean-Paul Ouellette, President and CEO Vision/RF Corporation, Canada will lead a host of other trainers.

    For details contact: Eunice Wanjiru, In-Sync Ltd

    Tel: +254-4450115/6 Cell: +254-727 737355 Email: eunicew@in-sync.co.ke
    URL: www.aitecafrica.com

    - USING ICT FOR EFFECTIVE DISASTER MANAGEMENT - AFRICA FORUM 2007

    13th - 15th November 2007, Dar es Salaam International Conference Centre, Tanzania

    The use of ICTs in disaster management is one of the CTO's core areas of expertise. Following successful events in Asia, the Caribbean and the Pacific, we are delighted to deliver our fourth regional ICTs for Effective Disaster Management Forum in Tanzania. There is no admission fee and we hope that all disaster management stakeholders will be able to attend and contribute to this event's success. With the Ministry of Communications and the Tanzania Communications Regulatory Authority as hosts, as well as the potential of a half-day workshop conducted by the ITU, this event has already attracted a huge amount of interest.

    s.binbrek@cto.int

    - 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.

    http://www.euroafrica-ict.org

  • eLearning Africa 2008 Opens Call for Proposals

    The 3rd eLearning Africa conference, which will take place from May 28 to 30, 2008, in Ghana's capital Accra, has opened its Call for Proposals.

    The event, organised by ICWE GmbH and Hoffmann & Reif, focuses on Information and Communication Technologies (ICT) for Development, Education and Training in Africa. Serving as a Pan-African platform, eLearning Africa links a network of decision makers from governments and administrations with universities, schools, governmental and private training providers, industry, and important partners in development cooperation.

    http://www.elearning-africa.com/proposals.php

  • Egypt: Mobinil and VoluBill

    VoluBill, a provider of innovative mobile charging solutions to telecoms operators worldwide, last week announced a new contract win with Egypt’s largest GSM operator Mobinil, a subsidiary of global telecoms providers Orange – FT Group and Orascom Telecom Holding. Under the terms of the agreement, VoluBill will provide Mobinil with its Charge it™ solution, a real-time data control and charging technology that will enable the mobile operator to implement sophisticated value-based charging strategies and to roll out innovative packages, bundles and promotions for its eleven million plus customers.

    The contract win is a key deal for VoluBill as it reinforces the strength of its ongoing partnership with Orange – FT Group and Orascom Telecom Holding, and demonstrates the global customer endorsement and satisfaction that exists for VoluBill’s solutions. VoluBill to date has signed eight agreements with Orange – FT Group companies for its Charge it technology across the globe, and a total of three deals with Orascom Telecom Holding companies in various locations.

    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 info@balancingact-africa.com

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