Issue no 491 12th February 2010

top story

  • 2010 is not shaping up to be a good year for satellite operators and resellers in Africa. There have been rumours that for the first time one operators’ sales in the continent have slipped down several percentage points. This year sees the arrival of four more international fibre cables: Glo One, Main One, EASSy and LION. Balancing Act’s latest report – African Fibre and Satellite Markets – takes the temperature of the current market and seeks to predict where things will be in three years time.

    As an acknowledgement of the huge changes that have occurred, this report has gone from being called African Satellite Markets the last time it was published to being African Fibre and Satellite Markets this time around. Whether you are an operator or a bandwidth buyer, you cannot assess the market landscape without taking into account the interrelationship between the availability of fibre and satellite infrastructure.

    Some of the key findings of the report are as follows:

    * The satellite operators have invested huge amounts in new and replacement satellites. US$ 4.395 billion will be invested in new and replacement satellites against US£2.15 billion in seven international submarine cables, excluding ACE where the budget has not yet been announced. The satellite operators are investing at a time when the tide is turning against satellite use.

    * The overall balance of satellite vs fibre use in Africa’s top Sub-Saharan markets 20 markets goes from 45.6% vs 54.4% in 2008 to 11.9% to 88.1% in 2014. Of these top 20 markets, the top 5 markets (South Africa, Nigeria, Kenya, Angola and Sudan) make up the majority of bandwidth demand across the continent and are the countries that will experience the fastest bandwidth growth over the period. So satellite operators and resellers will not only be selling into a smaller share of the overall bandwidth market but will become niche players in many countries. There will be growth but most of it will be on fibre.

    •  After three and a half years since December 2005 in which only ten satellites were launched with coverage over Africa (four of which failed), at least 36 new satellites will be launched by the end of 2013, costing between US$4.4 billion and bringing the equivalent of 26,325 MHz of additional capacity over the region. By the time the second constellation of O3b satellites is launched, there will be almost as much Ka-band capacity over Africa as the total stock of C- and Ku-band capacity.

    • If DRC fails to get itself connected to the ACE cable, it will be the only major country remaining on satellite. The tiny number of countries remaining wholly dependent on satellite will largely be small bandwidth markets like Eritrea. Although there will be demand from rural and remote areas, between 90-95% of all demand comes from urban areas and frequently just within the capital of a country. Almost no capitals will be unconnected by fibre.

    * We have had conversations with a great many operators over the last three months and there is not a single one that is not getting rid of satellite capacity or trying to get out of longer term satellite contracts. There is almost something visceral about the way in which this is happening and some are simply dispensing with all but the smallest amount of capacity for redundancy. The years of tight capacity availability and high prices may have been kind to satellite operators but they have not endeared them to many operators. The combination of more satellite capacity and all this freed up trunking capacity will see prices fall over the next three to five years.

    * One of the niche markets for satellite operators is satellite national cellular backhaul, connecting remote base stations to the backbone network. When African Satellite Markets was published in 2005 this was a very significant market. This time around, the report contains a spot-check updating of two of the largest users of this type of connectivity – DRC and Nigeria – and the results are not encouraging.

    Satellite operators need to demonstrate that they can respond to these new market circumstances by transforming what they offer. Satellite is dead! Long live satellite! Firstly, they need to make innovations in terms of delivery. Secondly, they need to find ways of bringing costs down so that those who are beyond fibre or wireless have some chance of joining the party. The market needs satellite broadband offers in the US$20-40 per month range. Maybe the big transition from satellite to fibre will re-energise the operators and get them thinking harder about how they retain market share.

    Two corrections

    The story in issue 490 titled “ Ghana’s Communications Minister stops mast building unilaterally despite Committee  to address the issues” should have made clear (as the article did) that it is the Ministry of Environment, Science and Technology (MEST) that has stopped mast building, not the Ministry of Communications.

    The story in issue 487 titled Regulator penalises leading mobile companies for QoS issues by shortening licence period: It was the Government, not the regulator that was responsible for this action.

    Reader’s Feedback

    On “ Ghana’s Communications Minister stops mast building unilaterally despite Committee  to address the issues” in Issue 490.

    Mast sharing will happen, now that the easy money is gone for the operators and they have to squeeze every cost down to make money.

    Just this week Tigo signed a deal to essentially transfer all their masts to Helios Towers Ghana in exchange for equity in Helios.  This means that Helios can now farm out Tigo's mast space to any of the other operators.

    Check out Legon Hill.  The Tower at great hall has been obscured by a forest of masts.  And the university administration stood by and let it happen.

    As for the buga-buga style, that's all we know.  Persuasion is out of the question - we have to show where power lies.

    Name and address supplied

    Balancing Act


  • Lack of power is to blame for the slow expansion of the mobile phone network in rural areas, Safaricom chief executive, Michael Joseph, said on Monday, adding that although the firm was committed to expanding its network coverage in these areas, the exercise had been expensive.

    "We are yet to fully penetrate the Kenyan market because of challenges such as lack of power," he said when he opened a new customer service centre in Nanyuki town worth Sh27 million.

    However, Joseph, whose company holds 80 per cent of market share with a subscriber base of over 15.3 million, noted that total penetration of the Kenyan market is still in early stages of development. He added that his company is planning to open more outlets by the end of the month to bring quality services closer to the people.

    Opening of the Nanyuki retail centre brings to eight the number of such units already unveiled by the firm across the country in the current financial year. By April this year when its financial year ends, Safaricom will have spent some Sh373 million in the retail expansion project. Fourteen new retail centres will have been opened, bringing the total to 32.

    "I am delighted by the opening of the Nanyuki retail centre. This unit will help us better serve our growing customer base in this region, in an aesthetically appealing and ambient atmosphere. Backed by our trained staff, we are bringing Safaricom closer to our customers." The Nanyuki centre features an airy design bench-marked against international standards.

    It allows subscribers to view new devices available at specially-designed "demo bars" and experience them to make informed choices about the devices on sale. The unit will serve the needs of Safaricom's PrePay and PostPay customers.

    Daily Nation
  • Executive Vice Chairman and Chief Executive Officer of the Nigeria Telecommunications Commission (NCC) Engineer Ernest Ndukwe has said that the commission was determined to resolve the lingering differences between service providers and GSM operators in the country's telecom industry.

    He said this in Abuja at the Public Inquiry organised by the NCC on the proposed guidelines on the Common and Premium short code operation in Nigeria.

    President of the Wireless Application Service Providers Association of Nigeria (WASPAN) Goke Akingboro said network operators were fond of denying content providers who constitute membership of WASPAN, access to their network.

    He said in other climates, value added service which include common and short premium codes was a multi-billion dollar business but that current practice of network operators leave much to be desired.

    Adegbe Ogbe, another content provider said that network operators were skewing revenue sharing formula (75%/25% ratio) against the service providers. He also complained of delay in payments of entitlement by the network providers.

    The NCC boss said: "We will look into the revenue sharing formula because we at NCC are given to encouraging small firms to grow so as to provide the needed competition. We will also look into delays in payment by the network operators." He said the event was meant to look into the proposed guidelines on Common and Premium Short Code Operation in Nigeria.

    Short codes are special telephone numbers shorter than the full telephone numbers that can be used to address SMS and MMS messages from mobile phones or fixed lines. They are widely used for value added services such as television voting, ordering ring tones, charity donations among others.

    "The guidelines are proposed to provide a framework for operation of common short codes, licensing of content aggregators and protection against misuse, that meet international standards", Ndukwe said.

    Included in the proposed guidelines are the provisions that text messages sent by consumers must be saved by the network providers for a minimum of six months for security and regulatory reasons, not to be used to pass obscene messages while the service providers are to ensure the numbers are used solely for the purpose for which they are meant.

    Network operators present at the inquiry maintained that sharing formulas between them and service provider is a business decision which should not be the concern of the NCC. They also complained of the six months minimum period the messages sent should be saved to be too long.

    Daily Trust
  • Zantel has experienced potential growth in the past 12 months despite the economic downturn. This growth is attributed to an aggressive expansion programme embarked 18 months ago which saw the mobile company investing in network expansion and increased national coverage.

    Zantel enjoys one of the largest coverage footprints in Tanzania. The past 18 months has seen more than USD 140m invested to improve quality and coverage of the network. Its main investor Etisala has increased its investment in Zantel over the past 18 months.

    This has provided the fuel for the growth for Zantel. It is now enjoying economies of scale as a result of improved access to affordable and modern technology Etisalat's over 95 milion subscriber base in both Africa, Middle East and Asia.

    According to Norman Moyo, new Chief Commercial Officer, Etisalat group has confidence in the Tanzanian economy. The increased investment has translated into improved quality of services for Zantel customers which has seen its subscriber base rocketing from 900 thousand to 1.4 million in the past 3 months.

    In an exclusive interview with the new Chief Commercial Officer, Norman Moyo, he pointed out t that Zantel's will be focusing on improving customer value, new innovative products and services into the market.

    He highlighted that there is a still a lot of Tanzanians who still need mobile and internet services and that focus should move to address underserved communities instead of fighting over a small shrinking market.

    Norman Moyo is part of the new leadership introduced to spearhead the turnaround of Zantel. The 36 year old Chief Commercial Officer comes with a wealth of experience managing major telecommunications turnarounds.

    He was part of the team that transformed the telecommunications landscape in Zambia as Marketing Director for Celtel Zambia and Chief Marketing Officer of Celtel Nigeria which saw Celtel Nigeria growing to a strong number 2 market leader growing customers from 4.5 million to 17 million customers in 30 months. He started his telecommunication with Econet Zimbabwe in 1998 and before joining Zantel he was working as Group Marketing Director for Zain group in Bahrain.

  • France Telecom has been selected to manage ETC, the Government-owned telco incumbent, a government official has disclosed. ETC attracted many foreign companies when it floated a bid, a few months ago, inviting firms to undertake its management in a revenue sharing agreement. However, only the three companies remained for the final selection process, according to the source.

    MTN, a South African based telecoms company represented in 21 markets in Africa and the Middle East, and Bharat Sanchar Nigam (BSNL), an Indian state-owned telecommunication company, lost the final bid to the French firm.
    Negotiations between France Telecom and ETC are still ongoing, but the former is expected to sign the deal and take over the management of the latter within three months, according to the official.

    Ethiopia’s move to hand over the management of ETC to a foreign company has been described by many local politicians as a first step towards liberalisation. The Ethiopian government’s monopoly of, and refusal to liberalise, the telecoms sector was widely criticized by many of its foreign partners, including the IMF.

    According to the terms of the deal, the French firm will introduce new schemes to reform the state run telecom’s core operations, ranging from service provision to infrastructural maintenance. France telecom is also expected to earn the ETC huge revenues by creating new markets.

    ETC is currently embarking on a massive 1.5 billion dollar expansion of all of its telecom services. Improvements include; the offer of various local and international language choices; a 997 information service; building a fibre optic network in order to create an efficient internet connection for the nation, 90 percent of which should be covered by the increasingly popular 3G CDMA phones.

    France Telecom will not be responsible for the on-going Chinese ZTE-run projects, which involves the development of Ethiopia’s nationwide network to cover 14 major cities, the source said.
  • - South African regulator ICASA has given the green light to cellular operators to cut interconnect rates by 36c from next month, which it says will benefit consumers. This week, MTN, Cell C and Vodacom agreed independently with each other to voluntarily cut the peak interconnect rate from R1.25 to 89c. The off-peak cost remains at 77c. The agreements were filed with ICASA on Tuesday and, late last night, it approved the revised proposal.

    - Kenya’s Permanent Secretary of Information Bitange Ndemo has hinted that the government may be considering a reduction in the cost of 3G licences, following sustained pressure from operators. Ndemo has again raised expectations for a reduction, telling a local radio station: ‘We will do everything possible to ensure that we have created the necessary competitive environment, even if it means that we revise the cost to reasonable levels. If we decide that we are lowering, we would have some mechanisms to ensure that Safaricom does not lose its money.’ Ndemo added that a final decision should be made in the next three weeks.

    - The Bureau of Public Enterprises (BPE) said that it would open financial bids for the privatisation of Nigerian Telecommunications Plc (NITEL) and its mobile arm, M-tel, on February 16, 2010. Six out of 14 pre-qualified consortia that submitted bids for the acquisition of 75% stake in Nitel have been shortlisted by the Bureau of Pubic Enterprises (BPE). They are: Brymedia (WA) Ltd; AF21/ Spectrum Consortium; MTN Nigeria Communication Ltd; Globacom Nigeria Ltd; Omen International Ltd (BVI); and New Generation Telecommunications Ltd  (formerly Telefonica Consortium).

    - Orange Tunisia has announced that its 3G network has carried its first call. According to IT website Tekiano the official technical inauguration of the network meets the new operator's obligation to have the network up and running within six months of obtaining its licence last August. The full commercial launch of the mobile network is expected in April.

    - According to local newspaper, the Nigerian Compass, Singapore Telecommunications is eyeing acquisitions in Asia and the fast-growing markets of Africa and the Middle East to boost growth after it reported quarterly earnings in line with estimates. CEO Chua Sock Koong said the telco will not close its eyes to the fertile telecoms landscape of emerging markets. The company earns about three-quarters of its core earnings from outside Singapore. “Our focus remains in Asia. That’s unchanged. We are also looking at some adjacent markets including Africa and the Middle East,”Koong said while speaking about the likelihood of acquisitions to shore up earnings and operations.


  • The government has ditched technical safeguards for proper construction and functioning of the multi-billion national optic fibre backbone infrastructure, according to a report in the Daily Monitor.

    Our investigations show that the original October 2006 turnkey contract between the government and Huawei Technologies Ltd, a Chinese Company, has already been altered three times, the latest being on August 18, 2009 under which some crucial provisions on quality standards have been removed.

    Key requirements dropped include pre-shipment inspection to certify quality of cables and other materials in countries of origin and a provision to inter the fibre cables in ducts conveyed through trenches at least 1.5 metres deep from road surface. Officials have okayed a trench depth of between 0.8-1 metre.

    Payments, which under the original contract, were made in block percentages after completion of agreed works have been revised to be cleared in phases per incremental works.

    Under the latest amendment, Huawei Technologies has been allowed to use $715, 679 (Shs1.4b) to buy some 3,800 wooden poles on which to run onshore sections of the National Data Transmission Backbone and E-Government Infrastructure (NBI/EGI). This, industry experts say, would render the installations vulnerable to vandalism.

    It has emerged that the ICT ministry has overturned a recommendation by its IT specialists - which Permanent Secretary Jimmy Saamanya had earlier endorsed - that the higher version, bigger-capacity G.655 96 core cable be used to network the country in subsequent phases of the project instead of G.652 24 core cables.

    This followed information given to civil servants that the cost of the lower-capacity 24 core cable, which Huawei Technologies currently supplies at $3, 200 (Shs6m) per kilometer, has over the past couple of years tumbled on the world market on the backdrop of rapid technological innovations.

    Daily Monitor understands that another Chinese Company, in May last year, notified the ICT Ministry that it could sell each kilometer-long 24 core cable cheaply at $1, 400 (Shs2.6m), enabling government to save $1, 800 (Shs3.4m) per unit. No decision was taken on the proposal.

    In an interview on January 21, the pioneer ICT Minister Ham Mulira, whose team negotiated the first contract, said the lower 2009 price quotations for the 24-core fibre cable is because technology changes fast and overtime, earlier products turn cheaper.

    "These are different generations of technology and since 2006 (when the turnkey contract was signed), prices have dropped," he said. He, however, would not say why a provision was not embedded in the original contract to accommodate the anticipated price fluctuations. Official records show that ICT ministry technocrats had warned that phase I cables were laid in shallow trenches (compromising its safety and lifespan); backfilling was incomplete and Mark Stones missing to identify routing of the infrastructure for protection.

    Dan Alinage, the Uganda National Roads Authority spokesperson, has confirmed that at the very minimum, all utility/service providers laying underground infrastructure, should bore trenches 1.5 metres deep from the road, not ground, surface. "A bitumen road, done well, has a thickness of one metre. If underground cables are buried in a shallow way, they could be destroyed during maintenance of the road," he said, adding: "The trenches should be dug 15 metres from the middle of the road."

    In an October 29, 2009 Internal Memo to PS Saamanya, a copy of which Daily Monitor has seen, Simon Peter Onyango, then head of the Project Implementation Unit, wrote: "The sections [of the cable] in the swamps have not been well entrenched. Secondly, the cable in these swamps is lying in water. This has a negative effect on the cable. Effort should be made to keep the cable out of water by laying in two concentric pipes."

    This newspaper has learnt that some Ministry of ICT officials around September last year abruptly halted their technical staff from carrying out field surveys to ascertain the appropriate routing, in effect the actual cost, of the communication infrastructure under phase II to connect the countryside, except West Nile.

    The decision has reportedly strained working relations between technocrats, who on the one hand feel sidelined/undermined and the decision-makers on the hand, emboldened by long service and experience.

    When we tried to reach PS Saamanya to clarify on the emerging issues about the NBI/ENI, his secretary referred us to the Ministry spokesperson, Geoffrey David Kiirya, who advised us to e-mail the enquiries.

    However when this newspaper telephoned him on January 13, a day after the e-mail was sent, Mr Kiirya said he had sought, but failed, to get responses from respective officers and "So, I have no comment".

    Dr Mulira, now a presidential advisor on ICT, said in Thursday's interview that like "all projects", phase I of the NBI/ENI project constructed under his watch could have had "some flaws" but Uganda in the first place had no say in choosing the contractor, picked by the Chinese government; the project's financer. He, however, said he had confidence Huawei Technologies would do a clean job on the infrastructure to last 5-100 years.

    "When a foreign government gives assistance of that kind, the sourcing of the contractor and procurements are not done locally here," Dr Mulira said, highlighting the handicaps of bilateral lending.He added: "The optic fibre cable is a benefit to the country in this digital age. It's something that should be welcomed and any mishaps will be dealt with [during maintenance] but these should not obscure the objectives of the project."

    Information gleaned from ICT Ministry website says the project, whose phase II reportedly commenced discreetly in the wake of a parliamentary freeze, is to "put in place optic fibre infrastructure countrywide to enhance connectivity and transmission of data, voice and video communication".

    The government, represented by Communications and Broadcasting Infrastructure chief, Godfrey Kibuuka and Fan Siyong, the country managing director of Huawei Technologies Company signed the original $127.9 million (Shs243b), inclusive of a $21.3 million (Shs40.5b) 'book entry' tax, for installation of the 2,122-kilometre NBI/ENI facility to boost local Internet capacity.

    The idea being that local bandwidth for electronic communication will be expanded and access to Internet services made cheaper, faster and more efficient across the country. This way, government business could be conducted on line, saving time and costs. Other benefits would include real time on-line consultancy for things such as tele-medicine or auditing books of accounts of foreign multinational companies from the comfort of one's room here.

    The Monitor
  • The Main One Cable Company has announced the commencement of the final laying of its high capacity fibre optic cable from Seixal, Portugal, through the coast of West Africa to Ghana, and Nigeria.

    The cable, which goes live in June 2010, is bringing the much-expected international capacity into a region whose explosive growth in tele-density in recent years has been blighted by sub-optimal global connectivity.
    Click to learn more...

    "We are pleased to achieve this major milestone within project timeline," said Fola Adeola, Chairman of Main One Cable Company. "We remain focused on delivering the project on schedule." Main One, in November 2009, successfully completed the installation of the shore ends of the cable in Lagos, Nigeria, Accra, Ghana, and Seixal, Portugal.

    The commencement of the end-to-end laying of the full stretch of the fiber optic from Portugal, signposts the final stages of the ambitious project. "Now that the 7,000 kilometre trunk of the cable is being installed, we are pleased that our efforts over the last 18 months are coming to fruition," said Funke Opeke, Main One CEO.

    The Main One Cable Company is wholly owned by African investors - African Finance Corporation, Nigeria; Pan African Infrastructure Development Fund, South Africa; FBN Capital, Nigeria; Skye Bank, Nigeria and Main Street Technologies, Nigeria, which is the project sponsor.

    In addition to the submarine operations, Main One is building two landing stations in Accra and Lagos which will be complete next month. Equipment installation and end-to-end testing of the cable system will then follow, prior to service launch in June.

    Main One will provide open access to 1.92 Terabits per second of capacity to the West African region at prices less than 50 percent of current wholesale capacity prices.

    The international capacity that Main One is bringing into the West African sub-region will consolidate the explosive growth of telecommunications in the sub-region in recent years. In addition to providing a major boost to Internet access, Main One will help to considerably minimise the difficulties of switching traffic between African countries and eliminate the inconveniences and added costs of first routing traffic to Europe.

  • MTN has fallen into step with competitors Vodacom and Cell C by announcing that it would be rolling out HSPA+ broadband services at speeds of up to 21 megabits per second (MBps). MTN said HSPA+ would be "rolled out strategically countrywide".

    But achieving the high connection speeds made possible by the technology would depend on "various conditions such as transmission, access device capability and the number of subscribers using the site at that particular time of day".

    Cell C announced plans for an HSPA+ service last month, promising to become the first operator in SA to offer the technology by the end of this year. Vodacom followed last week by saying its HSPA+ service would be available in key areas during the Soccer World Cup.

    MTN did not say when its HSPA+ technology would be operational, but said it had recently upgraded its broadband service to provide download speeds of 14,4MBps - double the previous level. It would not charge a premium for the higher access speeds.

    However, WorldWideWorx MD Arthur Goldstuck said few customers would be able to take full advantage of the faster network speed. "The end user equipment is not yet ready for these speeds. "There's been tremendous disappointment with the roll-out of 7.2MBps speeds, with most people experiencing speeds of less than 1MBps," Goldstuck said.

    Business Day
  • - The East Africa Submarine Cable System is set to land in Mtunzini, on the north coast of Kwa-Zulu Natal this weekend. This will be the only landing of the EASSy cable in South Africa and heralds the start of the final stage of the long process of planning, financing, designing and building this important African East Coast consortium cable system.

    - According to a report on Internet connectivity worldwide, published by Akamai, a US company specializing in managing Internet, the best connection in Africa can be found in Morocco, with a connection speed of 3251 kilobits per second (Kbps). The report, compiled during the 3rd quarter of 2009, also states that the UK is the country with the fastest connection to Africa. Rabat (3251kbps), Tunis (2211 Kbps) and Casablanca (2030 Kbps) top the lists of the cities with the best connections on the African continent. Regarding Internet penetration, Rabat leads with 26%, succeeded by Casablanca (7.3%), while Midrand in South Africa comes third. In terms of average speed connections from 2Mbps upward, Morocco’s Rabat also leads with 61%. Tunis rated 48% and Casablanca 33%.

    - Internet connection speeds, which currently do not exceed 2 megabytes (MB), will reach 20 MB "from the end of next April" for 100,000 connections in the province of Constantine (431 km east of Algiers), the local Director of Algeria's telecommunications company "Algerie-Telecom" announced on Sunday. This "qualitative leap," said Mohamed Ouadi, is made possible through New Generation Network (NGN) equipment with a capacity of 100,000 connections granted to this eastern province in keeping with the renewal of the company's national network to achieve the "e-Algeria 2013" project.

    - The Central Bank of Nigeria, the country’s banking regulator, military institutions and scores of other government agencies have missed a 2009 year-end deadline to migrate their websites onto Nigeria’s n.g, the nation’s virtual equivalent of country border on the global Internet. The Federal Government last year issued a December 31, 2009 deadline to all ministries, departments and agencies (MDAs) under government to comply with the directive, citing issues of national identity and security concerns.


Mergers, Acquisitions and Financial Results

  • The Egyptian Company for Mobile Services (ECMS), which offers services under the brand name MobiNil, has reported a 3% fall in net profit for the first half of 2006, down to EGP657 million (USD114 million), despite a 14% rise in revenues to EGP2.912 billion. EBITDA rose 11% to EGP1.465 billion. MobiNil launched EDGE services during the period and introduced Egypt’s first pre-paid call plan offering per-second billing. It ended June with 7.321 million mobile subscribers. ECMS also announced that it would need more time to decide whether to apply for a 3G licence. The National Telecommunication Regulatory Authority (NTRA) had previously stated that the cost of a standard 3G licence for any other operator wishing to upgrade their 2G concession would be equal to 20% of the winning bid for the recently auctioned third mobile licence. Last month the regulator selected a consortium led by Etisalat of the UAE as winner of the combined 2G and 3G operating concession. The winning bid is reportedly worth EGP16.7 billion (USD2.89 billion), almost eight times the minimum offer, putting the cost of a 3G licence upgrade at around USD578 million. On top of licence fees, operators are also required to pay annual royalties to the state. The inflated cost has now forced ECMS to rethink its 3G strategy. Meanwhile, ECMS shareholder Orascom Telecom has announced that it is interested in buying up to a further 3.5% stake in the company. Orascom owns a 16.6% stake in ECMS as well as 28.75% of MobiNil Holding, which owns 51% of ECMS. Orange holds the remaining 71.25% stake in MobiNil Holding

  • VoxTelecom, the specialist voice carrier of telecommunications group DataPro, will use two recent acquisitions to position itself as "a significant player in the booming voice service provision arena", says Managing Director Jaco Voigt. Voigt says DataPro's acquisitions earlier this year of open source PABX provider BizCall and cellular least-cost routing provider Definity Telecom have enabled the company to broaden its services. "We aim to provide a complete service so that our clients only ever need to deal with one company for anything to do with voice telephony." First established in 2002, VoxTelecom initially provided international and cellular least-cost routing services as well as a wholesale service to UK-based calling card operators. One of only two South African companies with an international telco licence, VoxTelecom was the first in South Africa to offer its clients guaranteed savings on voice calls to any international destination. Since the deregulation of the VOIP market in February 2005, VoxTelecom has also become one of South Africa's leading VOIP service providers. Its recent acquisition of BizCall, which has developed open source telephony products for call centres and the PABX market, brings strong consulting ability as well as an efficient, cost-effective VOIP gateway. "A lot of companies have run out of capacity on their existing PABXs and it makes no financial sense to upgrade their hardware just to get VOIP savings," says Voigt. "Bizcall's solution eliminates that problem, and their consulting strength means we're able to provide companies with solutions that are tailor-made to their business requirements." The purchase of Definity Telecom, which was implemented at the beginning of July after the Competition Commission approved the deal, completes the offering with a national cellular least-cost routing service. Definity has offices in the Western Cape, KwaZulu-Natal, the Eastern Cape and Namibia as well as Gauteng, providing a strong regional base. "We've recognised that in future our customers are going to demand integrated voice solutions," says Voigt. "People don't want to deal with multiple service providers. We're now perfectly positioned to lead this market and offer custom solutions to our customers."

  • Doctor Ham Mulira, the ICT minister, wants parliament to revisit taxes on mobile phone airtime and fixed lines. Telecom companies pay a 12% and 5% duty on mobile phone airtime and fixed lines and public payphones respectively.

    Mulira proposed to the newly-created parliamentary committee on ICT on Monday that the taxes could be transferred to other communication services "without affecting government revenues."

    "If it's possible, I propose that the Government through the finance ministry, revises one of these taxes on either fixed lines or mobile phone airtime and spreads it across the sector so that revenues are not affected. We need to communicate," he said.

    Flanked by Patrick Masambu, the Uganda Communications Commission's chief, Mulira said high taxes limited the user numbers. The minister was responding to Edward Baliddawa, the committee's chairperson query on what the MPs could do to improve the ministry's work.

    Mulira said subscriber base of fixed and mobile lines have increased from 70,000 to two million across the three networks of Celtel, MTN and Uganda telecom. The three communication giants have on several occasions complained to parliament over increased taxes, saying they hurt the sector.

    New Vision
  • South African IT budgets are expected to grow faster than their international counterparts this year, a Gartner conference has heard.

    Globally, IT budgets are expected to grow at 2.7% this year. Local companies, however, will experience growth at a faster rate than this, as Gartner has pegged SA's IT budget growth at 7.2%.

    This compares favourably with worldwide economic growth of 4.9%, Gartner research VP Mark Raskino told delegates at the 2006 Gartner Symposium in Cape Town yesterday.

    Compared with a spread of industries, SA's expected IT spend still outflanks global industry-specific growth. Even the sector categorised as high technology, expected to grow at 6.7% this year, will grow its IT budget by only 2.5%.

    Raskino said IT executives and managers are increasingly being expected to do more with less. This is especially true in countries with inflation rates over budget growth.

    There are challenges facing the industry globally. CEOs are questioning whether the economic boom can continue. In addition, increased competition has led to consolidation, placing fears of takeovers uppermost in CEOs' minds.

    While CEOs know technology can make their lives better, this is not something they are observing first-hand in their organisations. Instead, they are faced with a plethora of data that does not make critical decision-making any simpler, said Raskino.

    As a result, CIOs rate delivering projects that enable business growth at the top of their agendas, according to Gartner research. Among the top 10 imperatives this year are several business-oriented strategies as CIOs move to avoid commoditisation.

    Gartner research VP Mark Raskino said IT executives are increasingly being expected to do more with less.

    Raskino said this scenario alters the role that IT is expected to play in a changing world. IT has a window of opportunity in which to grow its contribution to the company's growth strategy.

    This will necessitate CIOs delivering a record of performance to establish their position and contribution in the organisation. "To do this, CIOs will need to create business value faster than the market and technology can reduce IT and business costs," stated Raskino.

    In addition, CIOs are not going to be able to cut costs to add value. They will have to deliver measurable value to the company.

    Compuware country manager Gerrit Bus concurs. "[There is a] gap between what the business wants and what IT delivers," he said.

    Bus, addressing a round-table at the symposium, said about 80% of an IT budget is spent on "keeping the lights on", with the remaining 20% being spent on innovation.

    Moreover, he argued, return on investment from IT spend is lower than in other industries. "[Companies] spend a lot of money, but don't ask what the return is."

  • - The Chairman of the National Investment Commission (NIC), Richard Tolbert, has challenged Liberian business entrepreneurs to forge partnership with multilateral financial institutions in the United States and Africa, especially the African Growth and Opportunity Fund, for loan assistance to build their capacities. NIC has begun creating opportunities for Liberian businesses through the internet. The website would provide detailed information on Liberian-owned businesses and foreign partners for greater investment in Liberia.

    - Botswana Telecommunications Corporation (BTC) and publishers of its telephone directory African Directory Services (ADS) have fallen apart as the landline monopoly has cut short the five-year directory-publishing contract. ADS will no longer be selling advertising space and updating customer data

Digital Content

  • Hi-Tech companies seeking the next big thing in the IT sector to enliven their sluggish revenues finally seem to have found it: the ability for customers to access the software they need on demand across the internet.

    Software on demand has long been touted as the wave of the future, letting firms pay according to the applications they use and the number of users. But for all the froth about cutting costs, eliminating licence fees and avoiding the headache of installing and supporting software in-house, it is still a niche activity.

    Now there are signs that the small trickle of adoption will gradually become a tide. So far 79Percent of the top 1000 companies in the US use it to some degree or are exploring the concept.

    Last week Microsoft -- which has a lot to lose if packaged software sales begin to dip -- reaffirmed its intention to supply software online as well as in a box.

    Its online services should generate a substantial $2,6bn in revenue in the financial year which began on July 1. Since Microsoft's overall revenue hit $44,2bn for the year just ended, the figure represents a small but increasingly important sum.

    Microsoft's "live software" stance is to offer internet-based services to enhance, rather than replace, its desktop software.

    "Some may view what we're doing here as a big, bold bet, but it's a very natural bet for us as a platform company," said chief software architect Ray Ozzie.

    "I do not believe the web is the be-all and end-all of experience delivery," he said, but added that in time the cost benefits of internet-based software might be difficult to ignore.

    Locally, GijimaAst hopes to derive much of its long-term revenue from software as a service. Its new line of business will manage all the computers, databases and applications of its clients from a control centre in Midrand, using IT management systems from BMC Software.

    "It's really about business success, it's not about software," said GijimaAst executive Dan van der Westhuizen. "Packaged software has a large up-front capital investment, it takes a lot of time to get it right, and there are ongoing maintenance and upgrades.

    "There is a lot of responsibility you accept with the traditional licensing model."

    Software on demand also frees up in-house technicians to work on higher-value projects instead of looking after the existing kit.

    BMC has offered its software as a service for 12 months with contracts worth $27m a year.

    "It's one of the fastest-growing businesses today," said vice-president Lori Cook.

    "Software licences will be replaced by other kinds of agreements. You will pay for exactly what you use and have the ability to scale up according to your business cycles."

    BMC's clients include retailers who make 75Percent of their sales in the run-up to Christmas, and tax specialists whose workloads dwindle as a tax year closes.

    Business Connexion is also exploring the idea, and has built two new data centres for R143m to double its capacity to provide such services to its clients. Outsourcing executive Mike Sewell said it could provide world-class services to lift the burden of IT management and governance.

    A big constraint to adopting the on-demand model in SA has been the high cost of internet access, said Sandy Pullinger, MD of software company nFold. Now bandwidth fees are dipping as more rivals offer more high-speed packages, so even small companies can afford fast internet access. "I see small companies starting to adopt this model more and more," said Pullinger.

    Analyst Mark Walker of IDC believes the trend will take several more years to come to the fore -- but he has no doubt that it will.

    "It's not going to happen overnight, but over a five-year time frame. As companies become more comfortable with it, they will abandon the standard application purchase model."

    Even the most feature-rich software is not completely suited to a company's needs, and buyers believe the costs are disproportionate to the value. A slew of irrelevant features and built-in obsolescence are other irksome points.

    The alternative on-demand model is far from wrinkle-free right now, however. Key issues to resolve are the difficulties of integrating it with current IT systems, resolving all the security risks, and to what degree the software can be customised for different clients.

    As the concept gained traction and more applications became available, on-demand contracts should generate $140m in SA by 2009, Walker said.

    The model could prove particularly useful in Africa, where companies with few IT skills could let a specialist supplier take care of the software headaches.

    Business Day

Telecoms, Rates, Offers and Coverage

  • - In Nigeria, CDMA operator, Starcomms Plc, has introduced tracking service for its subscribers in the country tagged 'StarTrack.' Chief Executive Officer (CEO) Starcomms, Maher Qubain, said that the location based services are deployed in most part of the world by many telecommunications companies to assist their subscribers identify the whereabouts of their friends, family and members among others.

    - Zain Tanzania has launched the Zain Biashara Community, a business initiative geared towards empowering SMEs around the country. Working with the Business Development Gateway (BDG) under the auspices of the Tanzania Private Sector Foundation (TPSF), East Africa Speakers Bureau (ESB) and the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA), Zain will offer eligibility to every SME that joins these business and investment entities to also join the Zain Biashara Community. By becoming a Zain Biashara Community member, every SME will benefit from communication support, funding to some programmes as well as bulk sms to database with various updates.

    - The liberalisation of the Cape Verdean telecommunications sector in 2006 made it possible for the number of mobile phone subscribers to rise three-fold from 100,000 to around 300,000, a government source said. In the same period, he said, the total number of subscription television contracts had risen five-fold from 1,300 to around 7,000, whilst the number of Internet subscribers had doubled, rising from 7,000 to 15,000 users.


  • * Eyal Copitt has been appointed as the District Manager (Africa) at Network Appliance Inc. (NetApp), a unified storage solutions provider. Copitt will be leaving his position as Gilat Satcom's VP Sales. He will be working out of the NetApp Israel office, which serves Africa.

    * Minnie Maharaj, has resigned from Telkom South Africa. Maharaj, who heads wholesale services, will join Vodacom from August 1. In her new position she will be starting up Vodacom’s wholesale division.

    * As part of its strategy to strengthen relationships with customers and partners across West, East and Central Africa (WECA), and the Indian Ocean Islands, Microsoft has appointed Thomas Hansen as its new regional general manager. The move follows the transition of the previous GM, Ali Hoballah, into a senior role for Microsoft's operations across Europe, the Middle East and Africa (EMEA).

    * Nortel announced it has appointed Darryl Edwards as president of Europe, Middle East and Africa (EMEA) region.

    * Communications and information technology group Celsys Limited in Zimbabwe has appointed Geoff Goss as its new chief executive officer (CEO) of the company effective July 2006


    21-23 August 2006, Muson Centre, Victoria Island, Lagos, Nigeria The event offers a high-powered educational opportunity for Africa’s ISPs, telecom operators and corporate VoIP users. The following is a sampleof the rich content: The impact of VoIP on African voice markets; Maximising international connectivity via a virtual service provider; TDMoIP vsVoIP: Which technology is better for your network? Successful revenue generating VoIP deployments in high-growth markets - Lessons from Iraq and Afghanistan
    For further details, contact Sean Moroney Tel: +44(0)1480-880774 or visit


    28th - 31st August 2006, Sandton Convention Centre, Johannesburg, South Africa
    Effective strategies for excellence in call centers
    For further information visit


    4th – 6th September 2006, London
    This year’s key focus areas are on realising the socio-economic benefits of mobile communications, policy making to encourage competition, regulating for mobile success, incorporating new technology to aid mobile development and generating the highest possible ARPU.
    For further information visit the CTO’s website

    - IWEEK 2006

    4 - 7 September 2006, Castle, Kyalami in Midrand, Gauteng
    The event is organised by ISPA and UniForum SA (the registrars) The programme brings an extensive range of industry experts from across virtually every continent, making this an exciting and extremely worthwhile event to attend.
    For further information visit


    4 - 8 September 2006, Cape Town, South Africa
    The event offers a uniquely African perspective and brings together leaders from multiple markets and disciplines to create the ultimate African industry networking experience. Contacts can be made, experiences shared, alliances forged and participants will profit from ideas, information and know-how.
    For further information visit


    12-13 September 2006, Transcorp Hilton Hotel, Abuja, Nigeria
    The Nigerian Communications Commission (NCC), in collaboration with the Growing Businesses Foundation (GBF) and the TT30 Club of Rome will hosting the Digital World Conference 2006. The theme of the forthcoming conference is "ICTs for Education and Development.
    For further information visit


    11th - 15th September 2006m, Southern Sun, Cape Town, South Africa
    Five focused days of conference and seminar sessions addressing the specific Revenue Management challenges currently being faced by African Telecoms Operators and Service Providers. This forum presents an invaluable opportunity to hear real-world experiences in a series of cutting-edge case studies and workshops led by African, European and American Operators. For more information, please visit the website at


    18th-21st September 2006, Yaoundé, Cameroon
    The seminar will examine the technological, economic and regulatory factors that influence the availability and deployment of wireless broadband services. The event will provide an opportunity for wireless broadband business, technology and regulatory experts to share their knowledge, experience and views on the future of the industry with ITU and hosting administration attendees.
    For further information visit


    3rd-5th October 2006, Grand Hotel, Kinshasa, Congo Democratic Republic 2nd Infrastructure Partnerships for African Development (iPAD) Central Africa will take place from the 3rd-5th October 2006 at the Grand Hotel, Kinshasa.
    For further information visit


    31 October - 2 November 2006, Le Meridien Hotel, Abuja, Nigeria
    The summit is dedicated to the deployment of satellite and satellite hybrid-based communications solutions across the region of West Africa and will provide an unparalleled networking opportunity for global and regional satellite communications providers to meet with ever-expanding communities of vertical market communications end-users.
    For further information visit


    8-9 November 2006, Sheraton Tunis Hotel, Tunis, Tunisia
    "What are the market impacts of additional competition and 3G licensing in North Africa? How can you attract new users to drive forward penetration? And more importantly what plans do your suppliers, clients and competitors have for this region? The 5th GSM>3G North Africa is the one forum in the region vital to manufacturers, application developers, operators and regulators who are active, or seeking to be active, in the North African market.
    For further information visit"


    14th – 15th November 2006, Tunis, Tunisia.
    Under the auspices of Secretary General United Nations Conference on Trade & Development (UNCTAD) Regarding sponsorship or delegate attendance, please contact Dan Morrissy in London on +44 207 2871326 or at


    The company is currently looking for an MGw O&M Engineer with at least 2 years proven Media Gateway (MGw) Administration, MGw activities in telecoms operation's environment. The person requires a highly developed customer orientation. Proven record on AXE/MSC/HLR (minimum 2 years experience), configuration and Fault Management. Capable to interact in different levels of customer organization (Engineering and Operations). Ericsson GSM/WCDMA Mobile MGw Operation and Configuration is an advantage.

    For further information contact


    The recruiting company is looking to grow its wireless consulting and deployment services in Egypt and is excepting applications from local engineers with proven experience in RF Planning and Optimisation, Transmission, Core, IN VAS, and LOS. An ideal candidate profile would include a minimum of 6 years experience in wireless network design/rollout or related fields with a demonstrated record of senior technical ability in the areas mentioned above ; previous consulting experience combined to a BSc (Eng) or MSc. Electronics, Electrical Engineering, HNC/HND or equivalent with a concentration or specialisation evident in Communications.; strong communication skills with fluency in English and Arabic Languages.

    For further information contact


    The Andrew W. Mellon Foundation has announced a Call for Nominations for the 2006 Mellon Awards for Technology Collaboration. These awards, to be bestowed for the first time at an international technology conference in the fall of 2006, will recognize nonprofit organizations that have demonstrated exceptional leadership in the collaborative development of open-source software through the contribution of substantial, self-funded organizational resources to the open-source project for which they are nominated. MATC awards will be made at two levels -- $25,000 and $100,000-- for significant contributions to collaborative, open-source software development that serves one of the foundation's traditional constituencies. The level of the award will depend on the scale and significance of the nominated project. For more information, visit Deadline: August 15, 2006.


    The Development Gateway Foundation is calling for nominations for its US$100,000 prize for outstanding achievement in the use of information and communication technologies to improve lives in developing countries. Sponsored in part by Intel Corporation, this year’s Development Gateway Award is focusing on initiatives that empower or improve the conditions of youth.

    For full award criteria and to access an online application, please go to The application deadline is August 11.


    Starting October 2, 2006, TOP will provide a GSM curriculum for Expert Training on BSS Operation & Maintenance. The boot camp includes 3 months oflectures and hands-on labs and is completed by 6 months of apprenticeship at a European GSM network operator. This heavily sponsored program targets on African engineers / technicians to improve their job possibilitiesin their home countries.

    For further information visit

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