Issue no 495 12th March 2010

top story

  • This week market research company InterMedia launches AudienceScapes, a research web site funded by the Gates Foundation. It conducted two country surveys (Ghana and Kenya) in 2009 and of the two, the Ghana survey is probably the more interesting for News Update readers. Based on a robust national sample covering all regions of the country, it looks like there are just under a million Internet users. Furthermore, 3% of the mobile users in the sample accessed the Internet at least once a week. Russell Southwood went through the numbers.

    The InterMedia survey was conducted in July and August 2009 and had 2,051 respondents based on a probability-proportional-to-size (PPS) plan. 56% of the sample was urban and 46% rural. Only 1% of the sample had a university degree or higher. The survey has been conducted before the arrival of four new international cables (Glo One, Main One, WACS and ACE) that will almost certainly bring both cheaper fixed and mobile Internet for household users.

    Based on the total population in Ghana of 23.8 million in 2009, 4% of the sample had access to the Internet based on which there are around 952,000 people with access. 7% had access in urban areas and only 1% in rural areas. 80% of those using Internet in the sample were aged 15-29.

    However, 10% of the overall sample had access to computers, over double the amount of people actually accessing the Internet, which implies that cost is a limiting factor. 18% of the sample in urban areas had access to a computer compared with 4% in rural areas. Interestingly, 8% of the overall sample had an MP3 player.

    Price and available bandwidth are obviously constraining what Ghanaian Internet users can do and the majority still use it for things like e-mail and research. However, there are those using it several times a day/once day for the following (based on % of Internet users in the sample):

    Watch/download videos 15%

    Play games 14%

    Visit social networking sites 15%

    All of these uses are before there is really the bandwidth to make this a pleasurable experience or the cost of Internet to make it widely attractive.

    Internet use on mobile phones is only a very small percentage of the sample but nonetheless significant because even small percentages of a large number (all mobile users) makes for a large actual number of users. 11% of the total sample had used radio via their mobile phone in the last week compared to only 1% accessing radio over fixed Internet.

    Of the mobile users in the sample, they had done following at least once a week: 19% had listened to radio using their phone; 3% had accessed the Internet; and 1% had watched mobile TV.

    The survey emphasises the point that mobile is a media. 16% of the sample had got news and information in the last week using SMS compared to 18% from newspapers. 24% of urban users used SMS in this way compared to 10% of rural users. Whereas traditional media (Radio: 89% and TV: 64%) and word of mouth (friends and family: 64% and other people in the community: 39%) remain dominant, SMS is steadily building itself into a media that might easily displace newspapers in the next 2-3 years. With increased amounts of smartphones and Internet use, this could pose a significant threat to African print media.

    However, 44% of the sample did not use SMS, probably for reasons of literacy, functional or otherwise: 14% did not use it all and 30% said they did not use it easily.

    But mobile companies beware! Users think that the services that they are using are expensive. 75% of the sample either agreed or strongly agreed with the statement that “Having a mobile phone is expensive.”

    InterMedia has launched its AudienceScapes site which can be found on the link below. Whilst aimed at the development sector, there is a great deal of useful information for anyone involved in communications in Africa:

    The two surveys of Ghana and Kenya can be downloaded by clicking on the links below:


  • Ericsson and MTN Ghana demonstrate it is possible to build and expand cost effective nation-wide mobile broadband coverage

    Ericsson has successfully trialled UMTS 900 MHz for the first time on the African continent with operator MTN Ghana. UMTS 900 MHz further extends mobile broadband coverage especially into suburban, rural and offshore areas, offering coverage up to 200 km. In urban areas it compliments UMTS 2100 MHz in offering more network capacity and better in-building coverage.

    Lars Lindén, President, Ericsson sub-Saharan Africa, says; “By leveraging off their existing installed Ericsson 3G Radio Access Network and enabling UMTS in 900 MHz, not only can voice, video and high speed data calls be carried over the network, but operators benefit from having one network delivering all services with the lowest total cost of ownership.”

    According to a GSMA report, UMTS 900 provides between 44% (in urban areas) and 119% (rural areas) increased coverage per Node-B compared with UMTS 2100. This is primarily due to the propagation characteristics of the lower frequency band and leads directly to lower CAPEX and increased mobility benefits, providing a new option, with greater service capability, for operators who may wish to replace their GSM networks.

    Given the recent establishment of a comprehensive end-to-end communication solution providing 3.5G mobile communications and Internet access to rural clusters in Ghana, Ericsson is able to continue its focus of bringing mobile voice and Internet data services to the community which impacts the end-user directly, enabling access to health, education and small businesses.

    Under the terms of the agreement, Ericsson will be responsible for the access, transport and transmission of 3G UMTS 900 MHz, where roll-out will begin in Q2 2010. Additionally, Ericsson developed advanced special features and assisted with the spectrum optimisation of GSM to free up just 3.8MHz required for UMTS 900 MHz. A fast and efficient migration to UMTS 900 MHz enables superior coverage and capacity.

    The trial was completed with legacy 3G RBS 3418 main-remote equipment, previously installed by MTN Ghana. This further showcases the longer equipment life-cycle and better total cost of ownership of the Ericsson solutions provided at the beginning of the 3G rollout. The use of 900 MHz also allows operators to reuse existing GSM 900 antenna systems for UMTS 900.


  • After the fiasco of a successful bidder for Nitel who did not have one of its key shareholders (China’s Unicom) committed, the Nigerian Government has now suspended indefinitely the Director General of the Bureau of Public Enterprises (BPE), Dr Christopher Anyanwu.

    Several informed sources last week told us that a prominent figure in a Government owned communications organisation was connected with the bid and this may be the reason behind the suspension. A range of operators and analysts have told us that the bid price was well over what the company might be worth.

    Hajia Zainab Ilyasu, acting Chief Executive of Nitel told local paper, the Daily Trust in a telephone interview last week that she was optimistic the removal of the BPE boss would not affect the current effort to sell of 75% stake of NITEL to investors. "The National Council on Privatisation (NCP) had already approved of the transaction. I do not expect the DG's removal to affect the process because the exercise was transparent," she said. However, with suspension of the Director-General of BPE, a meeting scheduled today (Friday) to discuss the transaction will not take place. The curse of Nitel has is taking its toll, not least on its employees whose pay is 20 months in arrear.

    Daily Trust

  • Telkom has resorted to deploying armed guards to hide in bushes overnight to try to stop gangs from stripping phone lines in the Western Cape. Sources have told the Cape Argus that one of the hardest-hit areas is the Elgin Valley, where a 1km stretch of phone line had been stolen during the night on at least six occasions recently - leaving a number of farms without phone lines.

    Another stretch of phone line, in Valley Road which leads off the N2 to prominent apple and wine farms, had been stolen 10 times, a source said. Telkom has now instructed its hired security guards to sleep out on farms and on roadsides to try to ambush the gangs. Sources said the thieves cut through cabling, rolled it up, then gave the call for bakkies or light trucks to fetch it when the coast was clear. They usually struck between 9.30pm and 3am.

    Another source estimated that R2-million worth of cabling had been stolen recently in the Elgin Valley alone, and that other farming areas such as Vyeboom, Villiersdorp and Stellenbosch were also hard hit.

    Telkom spokesperson Pynee Chetty confirmed last week that the parastatal had taken a range of steps to combat cable theft. Certain stretches of phone lines were now alarmed and others were patrolled. The company was also burying cabling in particularly vulnerable areas. Telkom was also pushing for the government to reclassify copper cable as providing an essential service, whereby its theft would be classed as sabotage.

    Cape Argus

  • Telkom Kenya has announced that it will be making shifts in its strategic focus this year as it attempts to get back on the track to profitability on the back of a US$124 million loss last year on revenues of just under US$138 million. The company has also gone into negotiations with the Government over reclaiming some of its purchase price on the basis of “lost assets” (see On The Money below).

    Speaking at a press briefing last week, Telkom Kenya CEO, Mickael Ghossein, said the company had encountered severe conditions in the last trading year that had affected its ability to generate profits.

    “We are now focusing on providing quality services, innovating and providing value for money. Our grand plan is to move the market towards true broadband connectivity, offering speeds of up to 8 mega bits per second,” he said. It took its first major step towards this objective by launching a 2 mbps “double play” service offering voice and Internet.

    The announcement comes at a time when the local telephony industry is in a state of flux. On the one hand, traditional forms of communication such as the fixed line are being challenged by newer technologies such as the GSM services, popularised by mobile players.

    In 2006, when the incumbent national operator was seeking a fresh injection of cash from a prospective buyer, the company estimated its average revenue per user (ARPU) amount to be $43.

    In its latest earnings release, France Telecom, which bought the firm in 2007, says the company is now getting $19 from its fixed line clients, reflecting the downward pressure high competition in the telephony market has inflicted on revenues.

    In the mobile segment, which Telkom Kenya entered in earnest in 2008, the picture is even more bleak since the company makes $1.8 in ARPU from its mobile customers. By comparison, Safaricom is getting US$6 per customer and Zain US$4 per customer.

    Speaking at the Digital Africa Summit in Kampala this week, Ghossein explained that the transformation of the company was a massive task as previously different parts of the company operated without reference to the impact they might have on other parts of the company. He said that there were lots of technologies in the company but everyone had been operating in vertical silos.

    He said the customer was not interested in what technology delivered it. He gave the example of how a customer who has an ADSL line that goes down could be migrated to its EVDO service whilst the problem is fixed. However, he spoke candidly when he said that “we are not succeeding as well as hoped (yet) with a converged staff dealing with all technologies.”

    (Various sources including Business Daily)

  • - The dispute over the jurisdiction of government ministers in Zimbabwe’s telecoms sector appears to have been abruptly ended by President Robert Mugabe, who allocated the administration of the Posts and Telecommunications Act to the Ministry of Transport, Communications and Infrastructural Development, reports Zimbabwean state-backed newspaper The Herald.

    - New mobile communication businesses now have a platform to globally show case their innovative products, following the launch of Mobile Monday Kampala (MoMoKla) in Uganda. MoMo, a global network of mobile industry professionals and startups has a presence in 100 cities globally. The Kampala chapter was officially unveiled by Igeme Nabeta, the chairman of Parliament's ICT Committee on Monday in Munyonyo. It is now the second African chapter after Mobile Monday South Africa.


  • Global telecoms giant Tata Communications was set to increase its investments in Africa to capitalise on the arrival of new submarine data cables, CEO Srinath Narasimhan said last week.

    Speaking to Business Day at Tata' s Global Media Summit in London, Narasimhan said the launch of the West African Cable System (WACS) - a high-speed communications cable running from SA to the UK that is expected to become operational next year - would lead to Tata "opening up more opportunities on the west coast of Africa".

    The world's largest wholesale international voice carrier, Tata has hitherto made few significant investments on the continent beyond a 56% stake in SA' s fixed-line operator Neotel. "There's not the infrastructure in place yet to deliver a full portfolio of services in West Africa," Narasimhan said. "But we will have that once the WACS cable comes into operation."

    The company had already begun pursuing opportunities in Kenya and Tanzania following last year's launch of the Seacom cable, established by a consortium including Tata.

    "We'll start with wholesale services, setting up a point of presence for IP (internet protocol), Ethernet or clear bandwidth, depending on what the customers want," Narasimhan said.

    Neotel was set to benefit from Tata 's drive to strengthen its managed services component, said Narasimhan - notably through the parent company's focus on telepresence, an advanced form of videoconferencing. The first service provider to launch public-room telepresence services, in July 2008, Tata operates 13 locations worldwide, including one at Neotel's Johannesburg headquarters. It expects to open 25 more this year.

    Business Day

  • South Africa’s Regulation of Interception of Communications Act (Rica) gives some idea of the complications that arise when you mandate the registration of customers. For Rica is not just for those with cellphones -- it affects all Internet users too. Whether you get your internet through your phone line from a service provider (iBurst, MWeb, Neotel) or through a data card on your cellphone, section 40 of Rica says that you must be registered in terms of the Act.

    Rica makes it compulsory for everybody with cellphones, everybody buying a new SIM card, and all broadband internet users to register at their service provider with proof of residence and their identity document or passport. It was introduced to help fight illegal activities, particularly organised crime, where the criminals buy cheap pay-as-you-go SIM cards that cannot be traced.

    But while Rica-ing your cellphone number may be a matter of simply visiting the local branch of your mobile service provider, customers of Internet service providers (ISPs) may find the process somewhat more challenging.

    Rica stipulates that the ISPs must personally verify the documents that their customers are required to submit before a service can be activated. But many ISPs are online businesses, which means they sign up customers and maintain relationships with them over the Internet.

    "An ISP may be based in Cape Town but provide Internet access to the whole of South Africa. It is not clear … how such an ISP will be able to verify Rica documentation in person where its customers are hundreds or thousands of kilometres away," said Dominic Cull, regulatory adviser to the Internet Service Providers' Association of South Africa (ISPA), in a press release.

    Rica a long and costly process. Cull claimed that the registration of cellphone users is costing the mobile service providers a "massive" amount of money, and that it appears the process will not be completed by the end of December 2010.

    "If the mobile providers are struggling to comply with personal verification then it follows that personal verification will be close to impossible for ISPs to comply with. Most of our members have a purely online relationship with their customers since they do not provide a physical component for their services, such as a SIM card," said Cull.

    Tlali Tlali, spokesperson for the Department of Justice, told the Mail & Guardian it was aware there will be challenges with the implementation of Rica. "It is the responsibility of the service providers to ensure compliance with Rica. We are not naïve to the fact that there will be challenges, but this is not an excuse for failure to comply. But we will deal with each situation as it arises, on its own merits."

    The ISPA has noted that the Department of Justice has taken "a number of steps" to address its concerns about the logistics of customer registration and verification; "In particular, the amendments to section 39 of Rica that will allow ISPs to use agents to verify customer documents."

    But the ISPA questioned why Rica did not allow the verification of documents in electronic format when the Electronic Communications and Transactions Act of 2002 created a framework to do this. "South African law clearly provides for verification of documents in electronic format, and the ISPA is not sure why this framework is not being used for customer registration under Rica."

    Tlali explained that some things are still under consideration, and details were still being worked out. He added that meetings will be held with all stakeholders on a six-monthly basis to discuss the situation with regards to implementation of Rica across the sector. "We do not want to cause inconvenience to anyone; we want to be flexible, but without compromising on the terms of the Act. We want to get as much compliance as possible."

    Cull told the M&G that the ISPA has not been involved in any sort of stakeholders' consultation meeting. "But we would absolutely welcome it," he said.

    Cull noted that relooking at the definition of an ISP would help to lessen the doubt over who exactly Rica applies to. "If you cut down on the broad definition of ISPs -- at the moment it could extend to varsities, offices, and even families -- and just make it apply to those companies with licences who provide access to the internet.

    "We have no problem with the concept of verification, but we would like common sense to prevail. All ISPs are in a state of uncertainty, a grey area. We're doing our best but it's difficult for us to personally verify our customers," he added.

    Mail & Guardian

  • The new electronic system launched by the Uganda Securities Exchange that started with the opening of accounts is gathering pace. A significant number of brokers have been opening e-trading accounts.

    The exact number of accounts opened could not be established at all the brokerage firms although at one at least over 20 people had opened accounts within two weeks. African Alliance, MBEA, Baroda Capital Markets and Renaissance brokerage firms did not disclose the number of clients who have opened accounts. Uganda has at least 10 brokerage firms that are currently the Securities Central Depository agents where accounts are being opened.

    “An account creates a profile for the investor,” a broker told East African Business Week. “Once the account is fully open then an investor will pay any amount of money to the brokerage firms’ account and then give the firm a go ahead to purchase shares,” he said.

    At the launch of the new system Joel Lutamaguzi, the manager of the Securities Central Depository (SCD) system at USE, said they expect investor numbers to grow because account opening remains for those who wish to hold securities.

    “One doesn’t necessarily need to purchase shares in order to have an account. Holding an account means in case of an IPO, purchasing and transacting of securities will be made easy,” Luttamaguzi added. According to the SDA’s Most of the people opening accounts are mainly ones who already own shares in various companies.

    The first phase of implementing the SCD system involves the investors opening accounts with the Securities Depository Agents (SDAs) will give way to automated trading of stocks on the USE, which will be the second phase to be completed by the end of the year. The SDAs include all the brokerage firms licensed by the Capital Markets.

    The East African

  • - Telkom South Africa which is responsible for much of the telecoms and broadcasting requirements for the World Cup, has now turned to Seacom for additional international capacity and redundancy. According to one source Telkom did not have much of a choice about incorporating Seacom into its 2010 network, and despite recent capacity upgrades to SAT-3/SAFE the fixed line provider still needed Seacom to ensure it has adequate capacity to serve its 2010 needs. It is understood that Telkom has inked a deal with TATA Communications, which is part of the Tata Group (Neotel’s biggest shareholder), to gain capacity on Seacom.

    - The Tunisian website "" recently launched a new service of electronic news via mobile phones. The new version is expected to offer easier access to the website. "Leaders' founder, Tawfik Habib said that this new service is offered free of charge to readers on cell phones without the need to use computers.

    - Vizada and Nairobi-based Indigo Telecom launch the ThurayaIP satellite service in Kenya comprising broadband mobile satellite terminal, communications airtime, prepaid billing, and technical support. The full package will be provided to customers based in Kenya and operating in other parts of East Africa, notably southern Sudan and Somalia. These include security companies, non-governmental organizations (NGOs) working on food programs and media organizations.

    - In South Africa, a special inter-ministerial committee is to be set up to finalise government's broadband policy, government spokesman Themba Maseko said.

    "The policy seeks to, among other things, address availability, accessibility, and affordability of broadband, building an information society, as well as to promote uptake and usage of broadband."


  • The government is proposing a ban on second-hand computers to curb dumping and encourage local assembling. A study on electronic waste conducted in Kenya in 2008 indicated that the country generated 3,000 tonnes of e-waste from computers, monitors and printers in 2007. Information and Communications PS, Dr Bitange Ndemo, says his ministry is proposing to Treasury to include in the next year's Budget a ban on used computers.

    The government zero-rated duty on imported computers in 2006, a development that led to rise in imports. Dr Ndemo said last week over the years many government incentives have made new computers affordable, adding there was no need for imports with short life span that led to accumulation of e-waste.

    While new computers can last up to eight years, the second-hand machines can only go for three years. "The organisations shipping in these used computers are being paid to get them out of those countries but are disguising themselves as donors assisting Kenya's schools," said the PS. "It is cheaper for companies in the developed world to pay these organisations to bring the computers here than destroy them."

    A study conducted by Eco Ethics International in 2007 on the impact of imported second-hand computers in the country show that those dealing in these computers started bringing them in 2003 but the number doubled after the removal of VAT.

    "When asked on the development of the business over time, we were shocked at their response," reads part of the research report. "The business only picked up in 2003 and doubled in 2006 when the government removed VAT."

    During this year's Budget read last year, the government announced a one-million laptop campaign where it was to guarantee interests on loans borrowed from banks for buying a laptop or personal computers (PCs).

    However, the private sector, mainly the telecommunications companies embarked on a similar initiative that made the government to retreat, leaving it to the private sector. The operators have partnered with various financiers and are offering laptops from Sh25,000 and Sh75,000. On the other hand, refurbished computers retail from as low as Sh15,000.

    Several non-governmental organisations, such as Computer-Aid International and Computer for Schools Kenya (CFSK) are among those who have been receiving computers from donors and distributing them to the learning institutions. However, CFSK is among the organisations that have embarked on projects to reduce e-waste in the country.

    Business Daily

  • Search engine giant, Google, has announced the start-off of it's annual African software programmers competition which is coming barely two weeks after the launch of it's latest map domains which featured an elaborate and very extensive navigable map of Nigeria and that of thirty other African countries.

    This competition tagged Google Code Jam Africa will throw African computer students against each other as they flex brain muscles trying to break software codes and algorithmic whizzes designed by the most ingenious minds on the planet. Participants coming from Nigeria are expected to be extensively exposed to software programming and coding to be able to stand a chance in the competition.

    According to a release published by Google Africa Developers on their official website "this will be a chance to compete against fellow African programmers and then practice for the Global Code Jam 2010". Scheduled for Dublin in April, it will run till the last week of July. Outstanding performers will stand the chance of undergoing internship training at Google's Engineering Headquarters in Zurich, Switzerland, should they wish to apply.

    Last year, Nigeria's Oduntan Odubanjo, was one of four computer students selected from Africa for an internship programme at the Google office.

    During this period, he worked with the Africa Engineering team on a project to link Google SMS Tip Search data with the web. His current interests lie in mobile applications, mobile marketing and mobile advertising. He is currently in his final year of Computer Engineering at the Obafemi Awolowo University, Ile-Ife where he serves as Google Campus Ambassador.


  • The Education Minister, Alex Tetteh Enyo has said the one laptop per child (OLPC) concept is a good one, but issues of sustainability and security needs to be properly addressed before the programme can be continued.

    He said this when he responded to a question as to how the first batch of laptops under the OLPC were distributed to school pupils and when the exercise will be completed. The Education Minister added that his Ministry has found it necessary to review the scheme in terms of its cost implication and sustainability.

    He said the Ministry is committed to deployment of ICT in the teaching and learning process, with efforts being made to provide class or laboratory solutions, and not 'one on one' solutions at the pre-tertiary levels, in view of the capital intensive nature of ICT deployment.

    The Minister told the legislative house that last year the Ministry took delivery of one thousand XO laptops from the OLPC programme, under an agreement made between the Ghana OLPC foundation and the OLPC organisation of the USA for the supply of ten thousand laptops for distribution nationwide.

    He added that this followed a pilot project had been implemented by the Ministry in two schools, namely Kanda Estate '5' School in Accra and Bonsaso Primary School in the Amansie West district in the Ashanti Region.

    Tetteh Enyo explained that the regional directors and district directors of Ghana Education Service (GES) were invited to identify primary schools that had electricity supply and secured structures for the computers. "A final list of thirty beneficiary primary schools was prepared and the distribution was done in August 2009", the Minister said.

    The Ghanaian Chronicle

  • - Leabridge Technologies, a Zimbabwe ICT firm, has been engaged by South African firms to provide advanced technology security services at the 2010 World Cup.

    - Uganda is reconsidering its ban on the importation of used electronics following complaints from traders and other stakeholders over the indiscriminate nature of the policy. State Minister for Trade Tourism and Industry Gagawala Wambuzi told The EastAfrican that they were adopting a more targeted approach to the implementation of the ban to focus on technology that is harmful to the environment instead of uniform application to all second hand goods.

    - The Government, through Rwanda Information Communication Technology Association (RICTA) is set to boost ICT development in the country by coming up with a new strategy that will ensure a vibrant sector. RICTA and the Government have come up with policies on how multinational companies can partner with local ICT companies in the country in order to build local capacity.

Mergers, Acquisitions and Financial Results

  • France Telecom will start negotiations with the Government a sum in compensation almost equal to the purchase price of the company because it says that it is not able to trace some of the assets that were on the books of the former parastatal at the time it was put on sale.

    The company now wants the government to compensate it to the tune of a massive $385 million - an amount almost equal to what the French company paid for its 51 per cent share of Telkom Kenya.

    As part of preparations for sale of Telkom Kenya, all the information about the company, including assets and audited accounts for five years - was deposited in a data room to which all interested bidders were allowed access.

    Did unscrupulous individuals grab assets of Telkom Kenya between the time the data room was established and the time of the actual sale of the company to France Telecom? Is the French company to blame for not having conducted a proper due diligence before signing on the dotted line?

    These are the pertinent questions at the heart of a dispute that has cast doubts on the integrity of one of the largest privatisation transactions in the history of Kenya, in which the government pocketed a whopping $390 million - the largest sum ever obtained from the sale of shares of a parastatal to a foreign investor.

    Both sides are still tightlipped. A party who was involved in the transaction for France Telecom told The EastAfrican that actual negotiations between the government and the French company were yet to begin - pointing out that the view of his side of the divide was that the matter should be kept away from the media attention for now.

    An e-mail with questions sent to France Telecom's Michel Barre, who was reportedly visiting Nairobi to engage the government on the dispute, went unanswered.

    Neither did the government side want to release the details of the dispute. But sources have confirmed to The EastAfrican that the government side has gone ahead and engaged a Nairobi law firm to lead the negotiations with France Telecom. Negotiations begin in earnest on March 21.

    Aside from assets that the French company claims have disappeared from Telkom Kenya's books, it is also accusing the government of non-disclosure of material contracts at the time of the transaction. The French claim that after taking over, they stumbled on supplier contracts with huge liabilities that had not been disclosed in the data room at the time of the transaction.

    More questions: Did some people in Telkom Kenya rush to commit the company to opaquely procured supply contracts between the time the data room was opened and the time France Telecom took over?

    Second, the French have reportedly made claims questioning the integrity and accuracy of Telkom Kenya's audited accounts that were lodged in the data room at the time of the transaction.

    Third, France Telecom is accusing the government of non-disclosure of material information with respect to tax liabilities, uncollectable debts, suspense accounts and unreconciled bank accounts.

    Technically, the claims by the French are based on what is referred to in legal parlance as warranties -- a situation where a party is allowed to claim monies from the seller of an asset if it turns out later that all facts were not fully disclosed before the transaction was concluded. Apparently, the share purchase agreement signed between the government and the French company issued a number of warranties.

    How the tussle turns out remains to be seen. But sources who understand the transaction told The EastAfrican that in cases where the government gave clear warranties such as the pension fund liabilities and tax arrears to the Kenya Revenue Authority, it is likely to agree to paying up.

    "That agreement does not have warranties against the accuracy of financial accounts," said the source, pointing out that France Telecom cannot turn around at this stage and take issue over matters it should have questioned at the time it was doing due diligence on Telkom Kenya.

    Indeed, opinion among experts who were involved in the transaction is unanimous that the claim by the French is excessive. "How can they claim $380 million when they paid us $390 million? Did we give Telkom Kenya to these French people for free?" asked a local investment banker who had been hired by one of the bidders as an investment adviser to the transaction.

    The East African

  • Egyptian Company for Mobile Services (MobiNil), Egypt’s largest mobile network operator by subscribers, has revealed that it has set a deadline by which it aims to complete the acquisition of broadband provider LINKdotNET (Egypt), Reuters is reporting.

    MobiNil, which is currently at the centre of an ownership dispute between France Telecom and Egyptian telecoms group Orascom Telecom, has said that it aims to finalise the acquisition of LINKdotNET from Orascom within a month, with MobiNil chairman Alex Shalaby noting: ‘We have set an internal target, within the board, that we would like to see this completed and concluded within 30 days, within a month from the board meeting yesterday [9 March].’

    The development follows reports in December 2009 that saw Orascom announce it had suspended sale talks until the MobiNil ownership dispute; earlier this week CommsUpdate reported that an Egyptian court had delayed the next ruling on the matter until 27 March.


  • A major landmark achievement had been made in the nation's e-payment system, following the completion of the Nigeria Central Switch (NCS) project by the Nigeria Inter-Bank Settlement System (NIBSS), a body set up in 1993 by the Bankers Committee. With this development, all payment cards issued by banks in Nigeria will be accepted on all acceptable devices deployed in the country.

    Speaking on Tuesday in Lagos, the Chief Executive Officer of NIBSS, Paul Lawal, said the completion of the project which started in 2004 will impact positively on the nation's economy, stressing that cardholders will now enjoy tremendous freedom to use their cards in a safe and secure manner in any place in the country, while delivering substantial benefits to all stakeholders.

    Lawal disclosed that four banks and the major scheme operators in the country which include: Interswitch, e-transact, Valuecard and Chams are already connected to the project, stating that a globally renowned company in the area of electronic payment system technologies, ACI Worldwide Incorporated, is the technical partner. He listed NCS' benefits as: direct and immediate gains to the economy by providing great savings in foreign exchange, and also, banks and other players in the payment industry will rely on NCS while concentrating in their respective core functions.

    Daily Trust

  • MTN Group revenues increased by 9,2% to R111,9 billion and earnings before interest, tax and depreciation ("EBITDA") by 6.7% to R46,1 billion based on a sound operational performance for the year ended 31 December 2009. Movements in exchange rates in the year, mainly in the South African Rand ("ZAR") and Nigerian Naira ("NGN"), had a substantially negative impact on the Group's financial results. To illustrate this, had there been no change in currency rates during the year, reported revenues at year end would have been 11 percentage points higher, and EBITDA 12 percentage points above that reported. Adjusted headline earnings per share ("EPS") decreased by 16.6% to 754.3 cents and, excluding the impact of the functional currency losses, increased by 8.5% to 878.9 cents.

    Said MTN Group President and CEO Phuthuma Nhleko: "The solid performance of MTN operations in most of the countries in which the Group has a presence was achieved despite economic challenges, increased regulatory changes and growing competition. Continued delivery in accordance with an aggressive network rollout strategy remained key throughout 2009, enabling MTN to maintain or improve its market share in most of its operations. Better distribution and a focus on segmental product offerings were other contributory factors. As a result, subscribers increased by 28,0% to 116,0 million for the period under review, indicating a continuing demand for mobile services in countries where mobile penetration is still relatively low".

    MTN initiated several Group projects during 2009 which are being rolled out through most operations. Although many of these projects are still in progress, this Group-wide approach allows MTN to differentiate itself from the competition, thereby ensuring a stronger brand and product preference whilst leveraging its regional footprint. These projects include the following:

    A coordinated effort to improve operational efficiencies through centralised procurement, best practice guidelines for site build, network management, safety and activity based costing.

    Continued investments in Internet Service Providers ("ISP") across all regions have been made to ensure that MTN is favourably positioned. MTN South Africa acquired Verizon Business South Africa (Pty) Ltd in early 2009 and successfully integrated the company with Network Solutions. The combined entity was launched in September 2009 with a key focus on converged services to the corporate segment. It is envisaged that MTN Business, although South African based, will provide a Pan-African opportunity to service the corporate sector across and beyond MTN's footprint.

    MTN has committed in excess of USD191 million in various submarine cables to ensure high-speed connectivity and improved quality and capacity of voice and data offerings. These include the East Africa submarine cable ("EASSy"); the Europe India gateway ("EIG"); SAT-3/SAFE; the East Africa Marine system ("TEAMs") and the West Africa Cable System ("WACS").

    With an initial focus on money transfers, Mobile Money has been launched to date in South Africa, Uganda, Rwanda, Ghana, Côte d'Ivoire, Benin and Yemen. The success of MTN Uganda, which was first to launch the new service in March 2009, is indicative of the scale of the opportunity: to date, Uganda has more than 680,000 Mobile Money subscribers.

    There have been many regulatory changes within the telecommunications industry over the past year, particularly focused on SIM registration and reductions in Mobile Termination Rates ("MTR"). Constructive and early engagement with regulatory authorities by management teams have ensured that MTN's operations have been generally well prepared for compliance with the regulatory changes implemented in 2009, and will be for those to follow in 2010.

  • - The Egyptian government is believed to be considering the sale of a portion of its 80% stake in fixed line incumbent Telecom Egypt, Reuters reports. A final decision has yet to be reached on such a divestment, but commenting on the development, Tarek Kamel, Egypt’s communications minister, said: ‘When I was asked a question on whether it was possible to put an additional stake from Telecom Egypt on the stock exchange in the future, my response was yes, dependent on ongoing studies with experts and consultancies.’ No timeframe for a final decision on a stake sale has been suggested, and Mr Kamel also noted that any such action would require approval by the cabinet.

    - Orascom Telecom Holding (OTH) says that it has lost the appeal against back-dated tax claims that were landed on its Algerian subsidiary Orascom Telecom Algérie (OTA). The company doesn't have to pay the full amount yet but will be required to pay a further 20% of the claim pending its next appeal with the Central Commission.

Digital Content

  • About Rwf60 million has been moved in daily transactions, with the use of the 'Mobile Money' facility, a month after it was launched, MTN Rwanda officials said last week.

    Andrew Rugege, the MTN Chief Executive Officer (COO) told Business Times on Friday that daily transactions had increased since the 'Mobile Money' platform was launched and added that active subscribers are close to 30,000 of the over 1 million MTN mobile clients. "The majority are active mobile money customers who have been on MTN. We have a good number who have come on board since we launched because of this value added service," Rugege said.

    "Public interest has been overwhelming. Evidently people were looking for safe, cost effective and convenient means to transact day-to-day business across the country or simply from one end of the city to another," he added.

    'Mobile Money' is a product that was pioneered by MTN Rwanda and launched at the beginning of February this year. It is a facility which allows one to send and receive money from the convenience of ones mobile phone.

    Beneficiaries can also buy airtime for themselves. According to officials, in the near future, customers will be able to purchase cash power, pay for taxi fares, purchase groceries and probably buy airline tickets.

    The company spent over $2 million as initial capital investment to implement this service. It enables customers on the MTN network sign up and transact at will through the 120 agents that have already been aligned.

    The telecom company which is the largest in Rwanda by market share is targeting 100,000 'Mobile Money' customers by the end of 2010. According to Rugege, "this number is achievable" despite the number challenges being faced.

    "Some of the challenges include the fact that agents apprehend or the fear handling the technology. This has been addressed by providing continuous training. The other challenge is the lack of service penetration in remote areas but are continuing to expand the number of accredited agents to ensure that the product is available easily," Rugege said.

    "Agents also were overwhelmed by the volumes of transactions. Some were initially overwhelmed by the number of customers coming to them wanting to transact 'Mobile Mobile'. The addition of new agents will spread the load more evenly," he added.

    MTN Rwanda is currently working with Commercial Bank of Rwanda as the major partner of the scheme. The company expects other financial institutions to come on board. The National Bank of Rwanda (NBR) as the regulator of all financial institutions in the country, is supporting the product. The central bank governor Francios Kanimba said a weeks ago that NBR will endeavour to have the electronic transactions law passed. This law will regulate all 'Mobile Money' facilities as well.

    The New Times

  • Just as purchasers of electronic goods can buy extended warranties in case their TV goes wrong, farmers in parts of Kenya can now mitigate the risk of weather shocks by insuring their inputs at the point of sale.

    The programme, dubbed “Kilimo Salama”, Swahili for “safe farming”, was launched on 5 March in the Rift Valley provincial capital, Eldoret. It takes advantage of the ubiquity and multi-functionality of mobile phones in Kenya.

    “Every time a farmer buys seeds, fertilizer, or other agro-chemicals, they can insure them, even for those who buy in very small quantities,” Rose Goslinga, the coordinator of the Agricultural Index Insurance Initiative at the Syngenta Foundation, told IRIN.

    Policies, costing 10 percent of the inputs purchased, split equally between farmer and manufacturers, who hope to increase sales as a result, will be sold by agricultural suppliers armed with mobile phones loaded with dedicated software.

    “To insure a farmer, the stockist first scans a code with all relevant product information via the phone’s camera; then he selects the weather station closest to the farmer’s fields.

    “Finally, the stockist enters the farmer’s mobile number and sends the registration to our server. An immediate text message sent to the farmer provides him with his policy number and insurance confirmation,” said Goslinga. “You have to make it very easy for the farmers to try the insurance,” she said, adding that the main administration costs incurred were sending out the text alerts.

    Weather stations monitor rainfall amount and distribution in the field, which are then compared with the crop's water requirement vis-à-vis historic rainfall patterns. In case of crop failure due to drought or too much rain, farmers will receive a text message informing them of a payout, which they will directly receive through M-PESA, a cash transfer service run by telecoms operator, Safaricom.

    Index-based insurance “pays out in events that are triggered by a publicly observable index, such as rainfall recorded on a local rain gauge”, notes a December 2009 International Food Policy Research Institute (IFPRI) report, Innovations in Insuring the Poor.

    As the insurance is based on an independent trigger that cannot be influenced by actions of the farmer, it reduces the likelihood of insured individuals taking greater risks. However, there is a basis risk in that payouts may not always exactly match the losses farmers experience, which can be difficult for farmers to understand, noted IFPRI.

    The Kilimo Salama programme was piloted on a group of 200 farmers in the central region of Laikipia during the 2009 long rains. “They [the farmers] thought it sounded too good to be true,” said Goslinga, adding that the farmers were now taking more insurance after experiencing the benefit. Some of them received a payout of up to 80 percent.

    “For farmers the biggest risk is weather. To minimize exposure, they tend to use as little inputs as possible. As a consequence, their harvest is below the optimum even when rains are good. Insurance gives them the security of a payout in case of a full crop failure, therefore promoting investment in farming inputs and subsequently improving productivity,” she said.

    The insurance programme is targeting at least 5,000 farmers in Central, Rift Valley and Western provinces, covering maize and wheat, which are facing considerable weather risk.

    Said Goslinga: “A key challenge is that insurance is new to farmers and it generally has a bad reputation. Capacity building and trust are key challenges.”

    “These new tools to manage risk will need to be complemented with investments that reduce the risks faced by poor households, such as low-cost irrigation schemes and drought-resistant seed varieties,” the IFPRI report stated. “To make index insurance viable, a long-term, reliable, and homogeneous database of weather information is needed, as are weather stations that report weather data quickly.”


Telecoms, Rates, Offers and Coverage

  • - Telkom Kenya Ltd (TKL) is breathing life into its copper fixed line with the activation of a new service that enables calls to be diverted to other lines when there is a cut on the wire. Working on the principle of call forwarding in case there is a cut on the fixed line, the call automatically redirects to either the CDMA or GSM line. To access the service, CEO Mickael Ghossein says, customers will not be required to meet any additional charges for the call forwarding and any calls made from the extra numbers will be billed to the normal line.


  • Two new ICT ministers have been appointed. Colonel. Houga Bi Jacques is taking on the job in Côte d’Ivoire following a government reshuffling. In Niger, Ms Takoubakoye Aminata Boureïma will head the ICT ministry in the new transition government.


    16-17 March 2010, Johannesburg's Emperors Palace, South Africa


    23-25 March 2010, Maputo, Mozambique

    At a time when ICTs are defining the way the world lives and conducts business, it is important for African governments to evolve themselves to meet the demands of changing trends in order to deliver effective services and to improve the quality of life of their citizenry. This also requires the formation of Public Private Peoples Partnerships to be geared towards achieving developmental goals through the application of ICTs to governance (e-governance/e-government), electoral processes (e-democracy), food and nutrition (e-agriculture), health delivery (e-health/telemedicine), learning and capacity development (e-education) and trade (e-commerce), among others.

    For further information on the conference visit the CTO’s website


    25-26 March 2010, Continental Hotel, Victoria Falls, Zimbabwe

    The theme of the AGM have been chosen as it is being recognised that it has been more than two decades since the first ICT regulator was established in the region. We recognise the fact that regulation is essential to achieve the goals of the public policy and therefore better regulation is to be considered in SADC so as to improve the policymaking process.

    As we drive towards greater competition, credibility and welfare of SADC citizens, we should recognise the critical need for high quality regulation and regulation that is only used whenever appropriate.

    In this regard, the Secretariat in coordination the NetTel@Africa is coordinating a training workshop prior to the AGM on the “Southern Africa Impact Assessment Training Workshop II” This is a follow up workshop on the same theme that was held in Dares Salam Tanzania in September 2009. The workshop will be held from 22 to 24 March 2010 at Elephant Hills Continental Hotel.


    12-15 April 2010, Sandton Convention Centre, Johannesburg, South Africa

    SatCom Africa 2010 is Africa's only satellite exhibition conference. SatCom Africa 2010 gives you an executive business experience where you meet real decision makers, a content driven and networking focused agenda and new business, new markets, new opportunities.


    26-27 April 2010, Sharq Village Hotel, Doha, Qatar.

    The TMT Finance and Investment Middle East 2010 Conference and Awards Ceremony is the premier networking hub for executives of telecom operators, technology providers, investors, financiers and advisers active in mature and emerging markets of the Middle East, Africa and South Asia. Now in its fourth year, the conference takes place again this year in Doha with support from Qtel, Booz&Co and Clifford Chance. The event features an outstanding academy of expert speakers from across the region and internationally debating opportunities in M&A, strategy, wireless broadband, financing, mobile payments and cloud computing.


    11-12 May 2010, Lagos, Nigeria

    Technology presents great opportunities for the financial sector to extend reach, improve service and reduce costs. However, in the drive to implement the very best that technology vendors have to offer, the focal point of the banking process is often forgotten – the customer.

    AITEC Banking & Mobile Money West Africa 2010 will therefore focus on the customer experience in relation to all technology implementation and services, challenging suppliers and bankers alike to evaluate their systems in the light of customer needs and preferences.

    For further information on the conference visit AITEC’s website


    23 May-4 June, 2010, Kigali, Rwanda

    The African Network Operators' Group (AfNOG) and the African Network Information Centre (AfriNIC) are pleased to announce that the 11th AfNOG Meeting and the AfriNIC-12 Meeting which will be held in Kigali, Rwanda during May & June 2010. The jointly organised two-week events include the AfNOG Workshop on Network Technology (offering advanced training in a week-long hands-on workshop), several full-day Advanced Tutorials, a one-day AfNOG Meeting, and a two-day AfriNIC Meeting. In addition, several side meetings and workshops will be hosted in collaboration with other organizations. Further details are available at the AfNOGand AfriNIC websites

  • Extended Term Consulting (ETC) Assignment: Task Manager, Mobile Applications Laboratories

    InfoDev ( is a research, capacity building and advisory program, coordinated and served by an expert Secretariat housed in the Global ICT Department (GICT) of the World Bank Group.

    From 2010-2012, infoDev will implement an ambitious program entitled “Creating Sustainable Businesses in the Knowledge Economy”. This program, jointly organized by infoDev, the Government of Finland and Nokia, will undertake a range of activities including establishing regional mobile applications laboratories; linking mobile entrepreneurs via a social networking initiative; using business incubation initiatives to stimulate small business creation; assisting small and medium-sized enterprises (SMEs) to seek new markets overseas; ensuring that SMEs have appropriate access to finance (A2F); starting international working groups for ICT and agribusiness entrepreneurs and incubators; and creating resources for project leaders to incorporate ICTs and innovation systems into agriculture development projects.

    The deadline to apply is March 19, 2010.

  • Dovetel and Obsidian - Tanzania

    Obsidian Systems has rolled out the Zimbra open source messaging and collaboration suite for 20,000 end-users at Dovetel, a Tanzanian Internet service provider and mobile operator that trades under the Sasatel brand. The deal is Obsidian’s biggest Zimbra installation outside South Africa and marks the company’s entrance into a new African market. Obsidian Systems is active in a number of African territories, but Tanzania is the farthest north it has ventured into sub Saharan Africa to date. Says Edson Mdanguzi, ISP Manager at Sasatel: “We selected the Zimbra platform to underpin Sasatel’s email solution, Sasamail, and provide email services to our business customers and consumers based on the affordability, scalability and reliability of the solution. The fact that Zimbra has an excellent track record as an email platform in the ISP space also counted in its favour.”

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