Issue no 504 14th May 2010
Two weeks ago, Telecom Malagasy (Telma) in partnership with the bank BFV-SG (part of the Société Générale banking group) launched “MVola”, the first mobile money service in Madagascar. With MVola, Telma joins the ever-growing group of African mobile operators that seek new revenue streams by offering m-money services to a population that remains largely unbanked. Isabelle Gross spoke to Patrick Pisal Hamida, Telma’s CEO about this new offering and what his expectations are.
The Mvola service will enable the Malagasy people to safely transfer money using their Telma mobile phone. The service is open to all Telma’s users. All they need to do to start using MVola is to open an account. It is a quick process, whereby the Telma customer needs to present his or her I.D. and sign the MVola subscription contract with one of the 250 registered dealers anywhere in Madagascar. An MVola account can be opened with a minimum deposit on as low as 100 Ariary (US¢5) – the maximum is up to 5 million Ariary (about US$2,500).
As soon as an initial deposit is made, MVola customers can send money (Vola) from their Telma mobile phone to any recipient, irrespective of whether or not the beneficiary being a Telma Mobile customer. This flexibility is appealing as it extents the reach of the service to subscribers of competitor mobile operators Orange and Zain. MVola customers can also top up their airtime account or pay Telma fixed or mobile phone bills, through their mobile phone anywhere in Madagascar. According to Patrick Pisal Hamida, “this new mobile money service enables Telma to strengthen its position of most innovative operator in a strong growth potential country”.
While the initial deposit and the top-ups of a MVola account are free of charge, the money transfer attracts a fee that varies according to the amount transferred and whether the receiver holds an MVola account or not. For example, a 5,000 Ariary transfer (about US$2.50) to an MVola receiver will cost 250 Ariary (about US¢13). The same transfer to a non-MVola receiver will attract a fee of 750 Ariary (about US¢37). On the other hand, cashing out this amount from a registered dealer will cost a further 350 ariary (about US¢17) to an MVola customer but will be free for a none MVola customer. The bigger the transfer, the more attractive the fee becomes.
A dedicated network of 250 MVola agents has been set up, and includes Telma branches, Moov Agencies, and Telma Kioska franchisees as partners from the start of the service, as well as 49 Tiavo cashier’s desks (the first micro-finance institution for the South East of Madagascar) and 66 Jovenna service stations. The mobile transfer platform has been supplied by Utiba, a Singapore-based company specialised in mobile transaction systems, which has already provided Telma with its calling credits top-up application.
According to Telma’s CEO, the general feedback, two weeks after its launch, is very positive and encouraging. Taking the success of Safaricom’s M-Pesa mobile service in Kenya as a gauge, Patrick Pisal Hamida excepts that Telma’s MVola service will have 3 million users in 3 years time. On an island where 97% of the population remains unbanked, this target doesn’t sound too unrealistic. Furthermore, the new mobile transfer service has been welcomed by the Ministry of Finance and Budget, the Ministry of ICT, the Governor of Madagascar’s Central Bank and the IMF representative who see it as a step forward to strengthen the development of the country’s banking sector.
The mobile operator is also keen to introduce in the near future additional services like the payment of salaries or utility bills, international remittance and e-commerce transactions. However, according to Telma’s CEO, there are currently gaps in the local legislation with regard to SMS payments that will need to be addressed first. When it comes for example to prove that a payment has been made or received, a bank statement is an enforceable document but a SMS message not yet.
With so many M-money services launched by mobile operators (MTN, Orange, Zain, etc) in the last twelve to eighteen months, is it the case that they are becoming the next-generation African bankers?
Telecoms operators which opposed to newly gazetted regulations on competition, got a temporary reprieve after the government promised to open fresh talks with the industry for a possible review of the contentious segments.
Information minister, Mr Samuel Poghisio, said the review would aim at fine-tuning certain aspects of the regulations for clarity and to address the feeling among certain operators that they were being unfairly targeted.
Telecoms market analysts, however, described Mr Poghisio’s move as cosmetic and merely aimed at appeasing investors who have expressed nervousness about the Kenyan market since the regulations were introduced.
“Legally, a gazette notice can only be nullified through publication of a subsequent one and not by merely addressing a Press conference,” said a lawyer who requested not to be named.
The government’s retreat is partly being seen as an indicator of the immense clout that Kenya’s leading mobile telecoms service provider, Safaricom, has and a damage control measure aimed at foreigners who have invested in Kenya’s information sector.
Dr Bitange Ndemo, the Information permanent secretary, promised to publish specific details about the amendments to be discussed with the stakeholders.
Mr Poghisio, however, reaffirmed the government’s commitment to implementing the Fair Competition and Equality of Treatment Regulations 2009 and the Kenya Communications Tariffs Regulations 2009 – clearing any doubts about this latest move.
“The consultations will not affect the implementation of the regulations,” said Mr Poghisio.
The contentious regulations, aimed at curbing anti-competitive behaviour in the telecoms market, have met fierce opposition from the dominant player Safaricom, which insists it has not abused its market dominance and is therefore being unfairly targeted.
The regulations allow the Communications Commission of Kenya (CCK) to impose certain conditions, aimed at levelling the playing field, on a player who has been declared dominant and is found to be abusing its market leadership position.
CCK, the agency that is tasked with identifying the dominant players in various telecoms markets and thereafter, establish whether they are abusing their dominance, said it would forge ahead guided by the regulations.
“We plan to conduct the study as provided for under the regulations. The process is ongoing,” said Mr Charles Njoroge, Director-General of the CCK. “We will be looking for specific instances where dominance is seen to have been abused.”
Mr Njoroge also said his office would wait for the said amendments before acting, but he confirmed that the rules remained in force beginning on the date of their publication in the Kenya Gazette.
Notably, the State signalled its intention to widen its net to include more players in the country’s telecommunications scene.
Mr Njoroge said the rules would apply to all telecoms players including those in the data, voice and infrastructure fields— meaning more players will come under CCK’s microscope in the coming months.
This is likely to have wider implications for industry players such as Telkom Kenya, whose range of data products and extensive fibre network are unmatched by any other player.
The development follows a barrage of claims from a section of players that the new rules would stifle growth in the sector.
It is hoped that the new regulations will provide a framework for determining tariffs and tariff structures while promoting fair competition in the industry.
Most operators agree that the regulations will benefit the industry even as some of their counterparts vigorously opposed them.
Safaricom has been the most vocal opponent of the regulations citing the sections that give CCK the right to control interconnection tariffs.
Mr Michael Joseph, the Safaricom chief executive, has specifically singled out Sections 7, 8 and 9 of the new Tariff Regulations, which state that dominant operators cannot review or reduce retail tariffs without the approval of CCK and that give CCK leeway to advise on tariff structures, as unacceptable.
“This is clearly an introduction of price controls in what is a liberalised and indeed very competitive sector of the economy. I do not believe that the Kenya government endorses price controls and this should not be allowed in the telecommunications industry,” said Mr Joseph.
Mr Poghisio said that his ministry was not in a position to implement price controls.
“Our regulations cannot override the country’s fiscal policy. Neither the ministry nor CCK has the mandate to control prices,” said Mr Poghisio.
Although the government appears to have softened its stance following a rise in industry tensions after the new regulations were published, it did not retract any part of the current legislation.
Orascom Telecom Algeria, or OTA, must end talks with South African telecom group MTN if it wants to start negotiations with the Algerian government, reports Algerian daily newspaper El Khabar.
"They must halt discussion with MTN to start discussing with the government", reports the paper, citing the Post and Telecommunication Technologies Minister Hamid Bessalah.
Bessalah also said that discussions would be conducted with the Algerian unit OTA and not with the mother company Orascom Telecom Holding, the newspaper reported.
The Algerian government had said previously that it opposed any deal for South African MTN Group Ltd. to acquire OTA, also known as Djezzy, which is 90% owned by Orascom Telecom directly or through subsidiaries, and warned that any transaction could lead to the withdrawal of the business' telephone license.
The assistant executive secretary of SADC, the Angolan João Caholo, expressed the view that the Southern African region should acquire competitive advantages over other African and world regions in terms of Telecommunication and Information and Communication Technologies.
João Caholo stressed this desire whilst speaking during the opening ceremony of the SADC meeting of the telecommunication ministers, and justified it with the fact that SADC successfully started a process of implementing efficient legal and guiding frameworks, as well as predictable policies characterised by confidence in the market.
He also defended that the region registered a high competitive level, regular investments and sustainable growth of the sector of Telecommunication and Information and Communication Technologies (ICTs).
On the other hand, and in face of the challenged resulting from the dynamic observed in terms of technological development, SADC's assistant executive secretary stressed the essential need for investors of this sector to obtain returns from investments before overcoming the technology.
The source said that SADC needs to take advantage from the convergence of platforms of information and communication technologies, taking into account the experiences recorded in the technological industry.
According to João Caholo, these convergences quickly increased the region's capacity to use a unique communication network to provide several integrated services through a unique one stop shop.
In this 26th meeting, the ministers of Telecommunication and Information and Communication Technology of SADC discussed issues relating to internal and regional roaming services in the community, the evaluation study of the regulating impact, the guidelines for the defence of consumers and their rights in the field of ICTs and the implementation plan of migration for digital television in the region.
Salary arrears owed to workers at Nigerian Telecommunications Limited (NITEL) and its mobile subsidiary, the Nigerian Mobile Telecommunications Limited over 2 years, have hit N13bn.
Elias Kazzah, the company’s staff union leader, said in an interview with NEXT that, “We have not got any information from the Bureau of Public Enterprises (BPE) over our two years salary but we have been consulting and contacting government officials to look into our case.
“It is a pathetic case; workers are dying, can’t cater for their families. We have also reported the case to the Human Right Commission that this is unfair, that citizens of this country are been maltreated like this without salaries for over two years. Recently, our junior workers visited the minister of state for information and communication; Labaran Maku to brief him on the situation. But as I am talking to you, we have not received any positive result,” added Mr. Kazzah.
However, Mr. Kazzah said though workers have no new idea on how to handle the situation, they have not lost hope.
“We have done everything possible, but we are thinking of assembling all our members at our office in Abuja, this week. At that meeting a decision would be taken on how to go about the issue,” said Mr. Kazzah.
- After a four-year wait, the Independent Communications Authority of South Africa (ICASA) is on track to release regulations governing the awarding of scarce spectrum by the end of the month, it says. Local telecoms providers had all but given up hope of ever seeing the regulations on spectrum in the 2.6GHz and 3.5GHz bands, which many of the local telcos need or want to develop WiMax and LTE networks.
- In Zimbabwe, mobile phone operators have started implementing per second billing in response to a directive by the Postal and Telecommunications Regulatory Authority of Zimbabwe for a billing system that is fairer for customers.
- Tanzania will soon launch a service through which medicines and other medical supplies being distributed in rural areas can easily be monitored using mobile phones. Health and Social Welfare Minister Professor David Mwakyusa said the service, code-named SMS for Life largely targets rural areas and described it as one of the latest innovations in the country's health sector.
- In Nigeria, state coordinator of the National Environmental Standards Regulation and Enforcement Agency (NESREA), Isa Abdulsalam said the organisation would soon start examining the telecommunication masts in residential areas in Nasarawa State to determine if they were injurious to the health of residents.
- German-based ICT consultancy DeTeCon International has been awarded a contract by Angola Telecom to restructure the state-owned telco’s operations. According to a press release, reported by South African news site ITweb, the main areas of intervention for DeTeCon will be ‘in the context of more effective development of Angolan telecommunications, including quality of service, tariffs, revenue and investments, traffic, number of subscribers, organisation, training and human resources.’ DeTeCon is a subsidiary of T-Systems International, part of the Deutsche Telekom group.
Warid Telecom and MTN Uganda have joined their competitors in the internet price war by cutting rates aimed at drawing more subscribers to their networks. Warid Telecom slashed its monthly internet charge for unlimited internet to Shs60,000 from Shs85,000 while its daily unlimited mobile internet service reduced to Shs4,000 from Shs5,000. Warid Telecom has as well reduced its annual mobile internet connection charge to Shs600,000 from Shs756,000 in an attempt to woo more mobile broadband subscribers to its network. However, the cost of the company's mobile modem through which their internet service is delivered has remained at shs150,000 compared to the industry's average of about Shs180,000. Mr Shine George, Warid’s head of products and services, told Daily Monitor in an interview "The reduction in rates is in line with our efforts to make it more convenient for Ugandans to have access to fast and affordable data services." MTN Uganda has also introduced new fixed line handsets with low costs internet bundles ranging between Shs9,500 and Shs28,500 for between 50 megabytes and 180 megabytes. The handset also comes with between 50 to 180 voice minutes that a customer can make use of once he or she has acquired one at Shs1,09,000. MTN and Warid's new internet offers closely follow reductions made by Zain and Uganda Telecom in the last two months. Among the top four telecoms, Zain has the cheapest mobile internet modem at Shs53,000, while Orange Uganda and Warid have the lowest monthly mobile internet service connections at Shs49,000 and Shs60,000 respectively. The low internet rates are expected to boost the number of internet users in Uganda from under three million, to a higher figure in the months ahead. However the quality of the service varies from one network to the other. Some service providers are offering very slow speed for costly packages. Although Uganda like the other East African states are now realising faster internet speeds due to the landing of undersea fibre optic cables, more complaints are being made about the reliability of the internet delivered. Mr Joseph Barungi, the general manager Africa Online Uganda, recently said internet reliability varies between 97 and 98 per cent instead of 100 per cent as demanded by customers. The poor reliability is attributed to East Africa poor national communication infrastructure and inconsistent in internet supply from bulk suppliers like Seacom.
Vodacom has announced the arrival of Linkbook - a low-cost compact computer designed to provide users with simple and affordable Internet access.
The Linkbook’s operating system is geared primarily towards a user-friendly web experience; from email to social networking and browsing, as well as basic Open Office.
Everything works off the desktop - including shortcuts to popular local online content and e-commerce websites.
“Linkbook is the first handheld computer of its kind available globally and aims to broaden web and computer access in emerging markets, tackling the digital divide and enhancing Vodacom’s strategy to make the Internet more accessible to all South Africans,” says Shameel Joosub, Managing Director of Vodacom South Africa.
“South Africa is a market eager for more ways to get online. We expect that Linkbook will be particularly successful locally due to low PC penetration and we hope that by introducing a low-cost user-friendly Internet-focused computer bundled with 300 MB of data per month, this initiative will help to kick start local economies by encouraging entrepreneurs to create a range of locally-inspired business models and services.”
The Linkbook, which has an embedded SIM card, as well as two USB ports, will be available on a 24-month contract at a subscription fee of R199 per month, including a monthly 300 MB data bundle, from participating Vodacom outlets, nationwide.
"Linkbook is an idea whose time has come," says Mark Levy, co-founder of Linkbook. “It's compact and highly intuitive and will bring easy-to-use wireless internet to millions. The cost of the actual computer to the consumer over the two-year contract period comes in at R40.00 per month. It is a massive step in the direction of the $100 computer.”
"Customised for South Africa including links to the country's top online sites, it's a global first. No other laptop in the world does this, so it's something we as a country should be extremely proud of. It also runs on a Linux operating system called Ubuntu."
When Paul English, the co-founder of travel search engine Kayak.com, says that he has a "big, big project" ahead of him, he's not kidding. That's because he's planning to cover all of Africa with free Wi-Fi, and he wants it to be "completely self-sustaining," to boot. He aims to bring this about through JoinAfrica, a non-profit/for-profit mishmash that'll get underway this summer. English himself has already gotten his hands dirty, using the wealth he's gained from his website's success to buy satellite dishes and the other equipment needed to deliver Wi-Fi to villages in countries such as Uganda and Zambia. "Having e-mail and Skype has been transformative for the handful of villages I've worked in," he said. Now he wants to expand those efforts — which will probably take the better part of a decade — using his own money as well as having African companies build upon the networks he creates and enlarging them over time. The African Wi-Fi will, for the most part, be the kind of Internet connection you'd have in a public library here in America, meaning you'd have access to sites such as Wikipedia and Gmail and services such as Skype, though bandwidth-intensive video streaming and "non-essential" stuff, like pornography, would be restricted. Will he be able to pull it off? English is in talks with potential partners to help provide infrastructure, and has already solicited the support of half a dozen African countries. It's a small start, but English isn't looking to keep it small: "If you take something, raise it up a couple of notches, and say, let's do something on a massive scale, it changes the conversation."
- Vodafone Ghana has decided to establish a 45-megabite high speed internet link at the Kwame Nkrumah University of Science and Technology (KNUST), in Kumasi. The facility is to help improve Information and Communalisation Technology (ICT) connectivity and enhance research work, teaching and learning, especially the distance education, tele-medicine and video conferencing.
- As part of its determination to provide effective, reliable and fast broadband internet services to more Nigerians, leading telecommunications company, Starcomms Plc, has launched its award winning iZAP broadband data services in Abeokuta, Ilorin, Kaduna and Zaria.
- In a sudden twist of events, the parliamentary committee on information and communication technology (ICT) of Uganda has given the Chinese firm, Huawei Technologies, a green light to complete the laying of the controversial data transmission cable. This change of heart comes hardly a month after the ICT watchdog, the National Information and Technology Authority (NITA), directed that the project is halted following local and international expert opinion that Huawei was laying the wrong cable.
- India's Tata Communications and Infinity Africa of Tanzania have partnered to expand an Internet protocol network in East Africa. Infinity Africa managing director Hussein Dharsee said the partnership would lead to the provision of reliable high speed Internet access to the increasing number of customers. Tata Communications in East Africa provides a resilient and diverse backbone with connectivity between Kenya and Tanzania to South Africa.
- After it emerged that 85% of parliamentarians in South Africa are computer- and Web-illiterate, GetSmarter and the University of Cape Town (UCT) have offered complimentary Internet training for parliamentarians, worth R110 000. Speaking at a parliamentary budget vote debate, parliamentary house chairman Obed Bapela ordered parliamentarians to improve their IT skills, since they fail to make use of the laptops issued to them.
Impressed by the system of conducting examinations into Nigerian tertiary institutions, the Kenya government has indicated interest in copying the system adopted by the Joint Admission and Matriculation Board (JAMB).
At the monitoring exercise of the maiden Unified Tertiary Matriculation Examination (UTME) recently, the Kenya Deputy Secretary for National Examination Council, Eddah Muiruri, who led a team of foreign observers noted that they were impressed by the arrangements put in place by JAMB for the examination.
She said Kenyan's National Examination Council has a lot to learn from JAMB on how it conducts examinations.
"What we would really like us to adopt and admire is the e-registration that Nigeria is currently using, which we are not currently doing in Kenya. We are actually looking at that aspect so that we can start the e-registration when we go back to Kenya."
She explained that there has been an understanding with all the examination bodies in Africa, noting that they have exchange programmes.
"When we conducted our examinations in Kenya, we invited them and they came and saw what we did and we benchmarked. They actually came and went through all the processes, the registration, the administration, the upgrading to the end and we are doing the same here," he said.
A member of the team, Kennedy Abujeh, said Nigerian has done well in the area of e-registration, noting that candidates use scratch cards to register on-line, which Kenya is set to adopt.
While giving insight into why foreign observers came to monitor the examination, JAMB Registrar, Dibu Ojerinde disclosed that six weeks ago, chief executives of some examination bodies in Africa visited Nigeria to see how things were being done in the area of examination administration.
"They include those of Kenya, Cameroon, Sierra Leone, Ghana and Tanzania and we took them to our office.
They went round our office and they felt highly impressed that some good things are happening."
Restrictions of the Official Secrets Act and the fear of massive job losses are slowing down plans by the government to roll out a shared information platform, players have said. They said government departments were stalling because they feared digitising information under their custody might render their staff irrelevant. Only the Attorney-General's chambers and Treasury - the two departments that have volunteered to take part in the pilot project for e-governance - have digitised information so far. Promoters of the shared information platform say government employees, just like private sector players and regulatory agencies, stand to save time and money in a system that has worked well for developed economies. "It will take much shorter time to locate information in the system and government offices will become more spacious and neater once all information is digitised and all cabinets currently holding hundreds of manual files are removed," says Communication and Information PS, Dr Bitange Ndemo. Under e-governance, all information relating to documentation are kept in the computer software as separate windows, each assigned a specific dialling code. Users of the government services can simply get all the information and documentation they need to effect any transaction by accessing the relevant window instead of visit in different offices under the manual system. For example, if a trader imports goods , all he has to do is to dial the four- digit code allocated to the transport ministry's window from where a call centre leads all the way to the Mombasa port and finally to the port of the country where the goods are coming from. By the time a trader leaves Nairobi for Mombasa, he already has the information that his cargo has arrived in Mombasa, the port charges and the time it will take him to clear it. The participation in the single window pilot project by Treasury means agencies such as KRA whose customs department has been singled out for causing delays in border clearance process will greatly improve its services. "This is the way to go on campaigns to reduce the backlog at the port and border points and everyone is excited about the single window concept," says the EAC ministry Permanent secretary David Nalo. East African countries are currently consulting with international experts on implementation of e-governance at regional level to facilitate the sharing of custom revenues once the common market is launched, rendering the internal border posts irrelevant The system allows a trader who wants to contact a trade attaché in US, for instance, to do so by just dialling a number assigned to trade ministry the same way he would dial local numbers and wait as a call centre connects him to the right officers. He will pay for the services at normal rates for local calls,--a radical departure from the present mode of operation where international calls draw higher tariffs. Dr Ndemo assured that none of the serving government employees face retrenchment in the switch to e-governance. "Instead of facing inefficiency of a whole government department, citizens will have to deal with call centres which can easily be replaced in case we get complaints," he said By cutting the direct interface between people seeking services and government officials, Dr Ndemo believes cases of corruption in civil service will also go down. But government agencies are still resisting the calls to digitise their information, the first step towards developing a common information database that facilitates e-governance. Lawyers say the arbitrariness of the official secrets law is likely to discourage many regulatory agencies and government departments from sharing their information on an online portal. "Most government offices--especially disciplined forces--will find it difficult to decide which information to digitise because from time to time, the cabinet can sit and declare any document or aspect of their operations a government secret," says a Nairobi advocate, Mr Sekou Owino. Generally, the Official Secrets Act has been blamed for the creating an information gap between the government and the private sector with the resulting lack of public scrutiny seen as the breeding ground for corruption. Once a document or information is declared a Government secret, Mr Owino adds, such information can only be shared with the general public after 30 years. The single window concept has seen marked success in European countries and they are said to be avoiding countries that still follow the manual system. EU uses the system to apportion tariff revenues among member states, depending on the size of the country's population and import consumption
Internet Solutions, a subsidiary of dual-listed Dimension Data, has earmarked $35 million for additional data centre capacity this year.
The company has already spent about $4 million on expanding current capacity, and is now looking for somewhere to build a new centre to the tune of $31 million. The company has a budget of $35 million – or R261 million – for additional capacity this year.
Allan Cawood, CEO of Dimension Data Middle East and Africa, says the company is evaluating where to place the next major data centre. It already has three centres in Johannesburg, two in Cape Town and one in Durban.
Cawood says the company is considering a few opportunities to build a centre, either in the centre of Johannesburg, or Midrand.
He explains that the budgeted amount would be spent mostly on refurbishing a building (which would be leased), infrastructure, flooring, cooling, generators and technology aspects such as servers.
Although Internet Solutions mostly offers services to local clients, the rapid development of undersea cables along Africa's coast lines means it will be able to host African clients, says Cawood.
He explains that Internet Solutions is investing in new capacity to make sure it is not usurped as the leader in hosting in SA.
Internet Solutions' turnover was $156 million in the six months to March, a 10% increase on the previous period. The unit accounts for 7% of Dimension Data's revenue.
- In Uganda, members of Parliament on the Information Communication Technology (ICT) committee have asked Parliament not to approve a supplementary budget of sh27b requested by the internal affairs ministry for the national information system. The ICT committee chairman, Nathan Nabeta, accused the internal affairs officials of rushing to sign a contract without addressing some of the issues like who will store the information and how it will be accessed by other agencies.
- Local ISP RSAWEB has launched True Cloud Servers, a cloud hosting platform that allows users to deploy and provision fully operational servers in just minutes. The first of its kind in South Africa, RSAWEB’s True Cloud Servers offer benefits previously unavailable to businesses hosting locally. The two main differences between True Cloud Servers and any similar products that are currently available are the speed at which servers can be deployed and provisioned, and the flexibility and scalability of the offering.
- South Africa’s Software provider SilverBridge plans to buy a software company targeting the short-term insurance market to sustain its growth. The company provides software products and support services to banks and life assurance companies. In the life assurance market, the software is used to administer clients' policies. "There are good synergies between life assurance and short-term insurance. Some of our clients require a supplier to offer both short-term and life assurance software systems," CEO Jaco Swanepoel said.
The reduction in mobile termination rates is starting to bite telecommunications company TeleMasters, which yesterday reported a decline in interim earnings.
TeleMasters provides least-cost routing services to assist companies cut telecommunications bills by switching calls made from land lines to the cheapest network.
The interconnection rates were reduced from R1,25 to 89c in March and further reductions have been proposed from July this year.
TeleMasters receives the bulk of its earnings from least-cost routing services, but it was in the process of diversifying into other areas.
As the cost of cross-network calls falls, there will be less need for least- cost routing services, so providers that offer them as their sole service are under threat.
"Interconnect rate regulatory changes had a direct impact on our profitability. Due to this factor, and expected changes in mobile termination rates, we decided to hold back on renewing expired SIMs and therefore did not earn connection incentive bonuses," said CEO Mario Pretorius. The decision not to renew SIM card contracts contributed to an 11% decrease in gross profit to R19,4m for the half year to March.
However, Pretorius said it was a temporary freeze and the company had started renewing the contracts.
"We held back between R2m-R3m that will come through in the second half of our financial year since we have started renewing the expired SIM cards," he said.
TeleMasters was targeting a 15% growth in earnings per share this year, but that depended on new retail cellphone rates for least-cost routing packages following a reduction in wholesale mobile interconnection rates. According to Pretorius, Vodacom has announced its new rates, which decreased by less than 5% to R1,22. MTN and Cell C new rates are still pending.
He is confident that the company could reach its earnings per share growth target because the reduction so far was not as substantial as initially expected.
Cash generation, however, increased 136% to more than R17m. "This is the most important factor we measure our business by" he said.
Revenue rose to R117,4m from R113,7m. "Revenue is up and we held back on claiming funds that will increase the margin until we have certainty, but above all we are satisfied that the engine is working and is pumping cash," Pretorius said.
Earnings per share dropped 7,76c to 8,68c , driven by a range of factors such as an 11% rise in employee costs, rental costs of additional office space to accommodate increased staff, and a write off of R1,6m in debt from one of its clients, which closed shop.
Pretorius said the factors that negatively effected the company's earnings per share and gross profits were temporary.
Despite the decline, Pretorius said TeleMasters remained well positioned to capitalise on the sustained growth it achieved during the downturn.
"We expect this growth to continue in future months," he said.
Morocco's Maroc Telecom has reported revenues of EUR 660 million, a 3.1% increase compared to the first quarter of 2009 (up 0.5% at constant currency and constant perimeter). The company's customer base stood at 22.4 million on March 31, 2010, a 14% increase compared to end March 2009, as a result of the continued growth in the mobile businesses both in Morocco and among all the subsidiaries in Africa.
Maroc Telecom Group's EBITDA were of EUR380 million, a 4.0% increase at constant currency and constant perimeter (+0.4% at actual currency and perimeter) and an EBITA of EUR284 million, a 6.3% increase at constant currency and constant perimeter compared to the first quarter of 2009 (-0.7% at actual currency and perimeter).
The Group’s operations in Morocco generated net revenues3 of MAD 6,095 million in the first quarter, down 0.7% year-on-year, and earnings from operations of MAD 2,898 million, down 3.1% year-on-year, chiefly due to the impact of marketing and communications efforts.
In Morocco, gross revenues generated by Mobile services in the first quarter rose by 3.6% to MAD 4,537 million, driven by the positive impact of customer growth and a stabilization in ARPU. The customer base5 grew by 6.5% year-on-year to 15.578 million at March 31, 2010. Thanks notably to the success of the loyalty program for prepaid customers introduced in 2009, the annualized mixed churn rate for first quarter 2010 came to 22.8% down 14.7 points year-on-year. Blended ARPU6 remained unchanged from the prior-year period at MAD 91, essentially due to the
impact of customer growth and an increase of almost 15% in inbound revenues, with a marked upturn in International inbound revenues.
Gross revenues generated in the Fixed-line and Internet segments in Morocco came to MAD 2,193 million at March 31, 2010, down 7.7%, resulting from the decline in Voice revenues, due to encroachment by Mobile. At end-March, the Fixed-line network had 1.232 million lines in service, a level virtually unchanged from the end of 2009. The ADSL customer base totalled 474,000 lines at March 31, 2010, up 1% versus end-2009 and down 2% relative to the prior-year period. The 3G Mobile Internet customer base amounted to 265,000 customers (versus 174,000 customers at end-2009).
The Group’s operations in Mauritania generated net revenues of MAD 282 million, up 3.3% (up 10.4% at constant exchange rates), thanks to a solid performance in the Mobile segment. Mauritel posted MAD 85 million in earnings from operations, down 7% at constant exchange rates2, mainly due to the impact of promotional efforts. At end-March, the number of mobile customers stood at 1.473 million while Mauritel had a further 43,000 fixed-line customers and 7,000 Internet customers.
The Group’s operations in Burkina Faso generated net revenues of MAD 461 million, up 13.2% (up 12% at constant exchange rates) and earnings from operations of close to MAD 168 million, up 92.5% at constant exchange rates2, thanks to a very solid performance across the Mobile, Fixed-line and Internet segments. At end-March, the number of mobile customers stood at 1.812 million while Onatel had a further 153,000 fixed-line customers and 24,000 Internet customers.
The Group’s operations in Gabon generated net revenue3 of MAD 273 million, down 7.9% (down 8.9% at constant exchange rates). Buoyed by rigorous control of fixed and variable costs, earnings from operations amounted to MAD 36 million, up 56.5% at consant exchange rates. Gabon Télécom achieved significant commercial successes in the first quarter of 2010. At end- March, the number of mobile customers stood at 528,000 and it had more than 36,000 fixed-line customers and close to 20,000 Internet customers.
The Group’s operations in Mali generated net revenues of MAD 340 million, up 13.7% on a comparable basis, and earnings from operations amounted to MAD 17 million. Sotelma turned in a strong commercial performance in the first quarter of 2010. At end-March, the number of mobile customers stood at 911,000 and it had 69,000 fixed-line customers and close to 10,000 Internet customers.
High profile speakers, animated presentations, and the occasional F-bomb on stage all characterised the proceedings at what is fast-becoming one of South Africa’s hottest tech conferences.
Net Prophet, a free one-day conference established by the RAMP Foundation last year as a means of social investment to debate and grow the local Internet economy, attracted about 800 people from all walks of life.
This year’s line-up included Erik Hersman (Ushahidi), Vinny Lingham (Yola), Adriaan Pienaar (WooThemes), Stefan Magdalinski (Mocality), Richard Mulholland (Missing Link), Patrick Kayton (Cognician), Sarah Lacy (TechCrunch), Stephen Newton (ex-Google SA), Stephan Ekbergh (TravelStart), Stuart Ntlathi (SNSET), and Arthur Goldstuck (World Wide Worx).
The real story at Net Prophet, however, came in the form of Stuart Ntlathi, one of South Africa’s most important young entrepreneurs, who ironically you’ve probably never heard of.
In 2000, when Ntlathi was only 13-years old, he started a science club with a group of friends in order to share their passion for science and technology and spread this enthusiasm amongst their peers.
Ten years later, the North West Province-based Stuart Ntlathi Science, Engineering & Technology Institute (SNSET) has won local and international awards and offers various training programmes and a support structure for more than 21 000 registered learners across South Africa as well as Taiwan and the US.
In a country where only 20% of matric pupils passed Maths with a grade of 50% or higher in 2009 according to research firm Eighty20, Ntlathi is clearly making a much-needed contribution to the South African tech industry.
Whether he realises it or not, a huge responsibility rests on Ntlathi’s shoulders as he is ultimately grooming South Africa’s next generation of biotech entrepreneurs — a reality that would break most 23-year olds, except he appears to revel in it.
Ntlathi is on a mission to “give young [mostly underprivileged] people the platform to be part of the developing world”. The term that he’s coined for his personal mission statement is “The Infinity Dream”, which basically means to always strive for what appears to be unattainable.
SNSET is currently involved in several innovative projects. One of them gives pupils 14 hours to conceptualise and build a prototype for a new invention made solely out of recyclable materials. Many of these inventions have been turned into working products and some have even been patented. Examples include a “portable shoe polisher”, “auto cooling umbrella”, and a “14-in-1 microwave oven”.
It appears that the Net Prophet crowd weren’t the only ones impressed and inspired by the work that SNSET is doing as they’ve also caught the attention of CNN and Reuters, who are sending production crews to South Africa to do a documentary later this year.
If the SNSET story is anything to go by, then tech entrepreneurship has a bright and diverse future in South Africa.
France Telecom has increased its stake in Orange Botswana to 69%, in a deal that saw a consortium of local investors sell around a 20% stake in the cellco to the French telecoms group, Batswana newspaper Sunday Standard reports. ‘We offloaded 20% of the company’s share and now we are left with 26% in Orange,’ Satar Dada, one of the investors in Mosokelatsebeng Cellular, a consortium of Batswana investors, told the paper. Dada revealed that the transaction was effected in December 2009, although he did not disclose the value of the deal. The report adds that the move was aimed at pre-empting a takeover offer from an unnamed South African mobile operator seeking to enter the market in Botswana. According to TeleGeography’s GlobalComms Database, Orange Botswana launched mobile services as Vista Cellular in June 1998. It was rebranded under the Orange banner in March 2003, following the acquisition of a 51% stake in Vista by France Telecom. At the end of March 2010 the cellco reported a mobile subscriber base of 791,000, placing it second in the market behind Mascom Wireless (1.22 million) and ahead of BTC Mobile (350,000).
Kuwait's Zain has recorded first-quarter consolidated revenues of KWD 329.7 million (US$1.146 billion), an increase of 11% compared to same period in Q1-2009. The Company's consolidated EBITDA reached KWD 139.2 million (US$483.7 million) and net income dropped by 31% to KWD 51.55 (US$179.1 million). The company has a one-off gain of KWD 33 million (US$116 million) in the year ago period.
- Orascom Telecom Holding has reported that its first-quarter revenues rose by 1.6% over the previous year to US$1.22 billion, but was down by 6.1% compared to Q4 09, mainly attributable to lower revenues of its Algerian subsidiary by 8%.
- IT solutions and services company, Dimension Data has announced its results for the six months ended 31 March 2010. The Group, which is listed in London and Johannesburg, reported sales of $2.2 billion - up 11.1% in reported currency over the prior period. Operating profit increased by 21.0% to $107.5 million, and the operating margin expanded to 5.0% (H1 2009: 4.6%, before exceptional items), in reported currency. The widening in the operating margin was driven by an improved gross margin following a higher contribution from Services and good containment of overheads. Earnings per share grew 20.0% to 4.2 cents and the Group ended the period with cash of $493 million.
- South Africa's largest retail bank, Absa, and Western Union have enhanced their joint service offering to Absa accountholders by allowing them to conveniently access the Western Union(R) Money Transfer(SM)service to send or receive cross-border money transfers using either a cell phone or Internet banking.
- In South Africa, the struggling technology group Faritec filed for liquidation for its wholly owned operating subsidiary after it failed to secure funding. Faritec has been trying for the past six months to raise R60m to fund its working capital, which is under pressure. The group was in discussions with creditors of Faritec Enterprise Solutions to convert their debts into Faritec shares. The company told shareholders that, despite its efforts, it has not been successful in raising the necessary funds to implement the turnaround strategy.
The announcement last week by News24 that in April it hit the two million mark for South African unique users is no small potatoes.
When you consider that the South African internet audience is estimated to be between five and 6.5 million, it means that Naspers's News24 has certainly got the recipe right for general news websites in this country.
And that 2.1 million users figure from Nielsen released by Online Publishers Association (OPA) excludes the popular value-add zones such as Women24, Sport24 and Health24. Counting international users, News24 had 2.87 million unique users in April. The experts point that part of News24's growth is organic as the internet audience in South Africa is on the upswing but let's give credit where it's due: These are good figures and puts News24 streets ahead of its competitors.
Nielsen's figures puts the Independent Newspapers-owned IOL News and Avusa's Times Live at 1.51 million 1.14 million and unique users respectively.
On the value-add zones, JP Farinha, the CEO of Naspers's 24.com digital division under which News24 falls, told Bizcommunity: "In terms of numbers both Sport24 and Fin24 are pretty big with between 400 000 and 500 000 uniques each. Health24 is next and then we have Women24, Wheels24, Weather, Food24, Channel24, Careers24, Parent24 and Gotravel24. Time spent on site is highest on Careers24, Blueworld, Games and our email product because of the types of activity. Our blogging platform, Letterdash, gets substantial audience but is spread across all our brands so can't be counted as a single destination but its users also tend to spend more time on site."
News24's milestone comes at a critical time for media houses in South Africa as they ponder whether to put up pay walls on their sites - giving away users but hopefully gaining subscription revenues, more time spent on site and demographic information of paying users so that they can net advertisers which want more targeted audiences. Avusa is preparing to do just that with the websites of its Eastern Cape newspapers, the Daily Dispatch and The Herald.
However, for national general new sites such as News24, putting up a pay wall is not an option as a user can just as well head off to the competitors as they all offer much the same commoditised news. So News24, IOL and Times Live are in the game of achieving critical mass - making the audience numbers so compelling that advertisers will finally catch the drift.
In the UK, there is a similar story with Mail Online, the website of the Daily Mail national tabloid. The Mail Online is the UK's most visited newspaper website with 2.2 million average daily browsers in March 2010 and its online publisher recently said he believes the site is now big enough to make the advertising model pay. On the other side of the spectrum in the UK, the website shared by The Times and the Sunday Times has withdrawn its audited web traffic figures as it prepares to put up a pay wall in June.
In Britain online advertising is undoubtedly on the rise and last year it beat TV ad spend for the first time. A study released by PricewaterhouseCoopers and the Internet Advertising Bureau showed that online spending in the UK grew almost 5% to £1.7 billion (about R19.44 billion) in the first half of 2009 while TV spending shrank 16% to £1.6 billion (about R18.3 billion). (Though one must bear in mind that the UK online ad-spend calculation includes e-mail campaigns, classified adverts, display ads and search marketing.)
South Africa is way behind on this curve and, according to the OPA, online ad spend last year in SA was at about R419 million though this doesn't take into account ad spend with Google South Africa. By comparison, Nielsen's AdEx figures put TV ad spend at R10.4 billion last year, print at R8.9 billion and radio at R3 billion. AdEx figures, however, are calculated on rate cards and do not factor in discounting and media houses doing deals across their different titles or stations.
While more and more South Africans are getting online, internet penetration for our 49 million population is also low. The OPA points out that Belgium, which has an online ad spend of about US$500 million (about R3.805 billion) annually, only has an internet user audience of only 5.5 million but then the population of the country is only 10 million.
One would think that News24 has reached critical mass, for crying out loud, to start making that elusive advertising model work.
Farinha says he thinks News24 has had critical mass for quite a while but the online advertising market has a lot of catching up to do.
"Although online penetration is still relatively low in SA as a whole there is high penetration in the mid to high LSM segments," he says. "The current 2% of online advertising share is far below the 9-10% world average so we feel there is lots of growth to come even if penetration remained as it is."
"This last year was a tough one, given the economic climate, but we still managed very good growth while the overall advertising market declined. We still foresee very strong growth in online advertising over the next five years."
For the foreseeable future advertising will be the chief earner, says Farinha, but other revenue streams such as referral fees from Kalahari.net and subscription and listings revenue on Careers24 are growing while News24 is starting to test out payment for online games.
"So we are diversifying our revenues and will continue to do so," he says.
It is certainly peculiar that advertisers continue to sit on the fence while online audiences in this country grow. I'd say a huge opportunity exists for those willing to be first to market on this score.
MTN Rwanda says that transactions through the mobile money service have reached Rwf590m, barely five months after the launch of the mobile operator's service that enable users to transfer money electronically with their phones without having to move location.
The service dubbed "MTN Mobile Money" was officially launched in February.
"People have shown interest in this service. The first impediment we are addressing is the cost of sending the money around the country," Albert Kinuma, the head of mobile money told Business Times on Thursday.
Sending money through the service attracts a fee of Rwf250 for any transaction between Rwf1,500 and Rwf300,000 for somebody registered while the transaction cost varies between Rwf600 to Rwf4,000 for somebody unregistered.
Rwanda's largest mobile operator by market share says within the first three months, the service has managed to attract about 83,000 users with at least 71,000 active mobile subscribers utilising the platform.
While response from the public has been positive, the biggest challenge remains the financial muscle of the dealers. The company says the success of the product largely depends on local entrepreneurs becoming partners and making the businesses grow.
"We have realised that in some instances agencies have been overwhelmed by the volumes and during the course of the day, one of the agents runs out of money," Kinuma observed.
So far, MTN has only 201 dealers countrywide of which 80 are around Kigali.
"What we are trying to achieve is having a network that anyone in Rwanda does not have to walk more than 5 kilometres to find an agent."
However, the official says MTN is continuously engaging the business community to increase investment into the business.
"It is something we are addressing and it is improving - we do not want to find ourselves in a situation where some agents might run out of money."
The product in which MTN Rwanda invested over $2 million, also allows users to buy airtime once they have registered for the service.
But according to Kinuma, there are other unexploited possibilities that the money transfer service can offer such as paying utility bills and salaries.
"The first service we started with was the ability to send and receive money across the country - because it is something very simple and easy to understand for everyone - as well as the ability to purchase airtime from your phone, for yourself and other person. The next step is cash power,"
Though the mobile money transfer service -the first of its kind in the country, MTN says it is taking advantage of their wide network coverage (over 90 percent) to enhance access to financial services.
"Our target was to achieve 130,000 users on the platform by the end of the year and we are already half way the mark and we should be achieving that in the next couple of months."Kinuma said.
- Pioneer cable channel, Supersports, mobile handset manufacturers, Nokia and telecommunication giants, MTN have devised a means to bring matches of the 2010 World Cup live to football enthusiasts in Nigeria even when they are stuck in traffic. The companies unveiled a mobile handset, Nokia 5330 which is specially designed to convey DStv signals only for MTN subscribers. Announcing the partnership with the other two allied services companies, Mayo Okunola, general manager, Dstv (West Africa), told a crowded press conference in Lagos that the tripartite arrangement was aimed at pushing the frontiers entertainment by making compelling live television coverage available to Nigerians on their mobile handsets.
- According to the latest research from Strategy Analytics, mobile handset sales in South Africa will grow a healthy 17 percent to 11 million units in 2010. Growth is being driven by economic recovery and the feel-good factor of the upcoming World Cup soccer tournament. South Africa is the fourth largest handset market in Africa. Nokia and Samsung are currently the top two vendors in South Africa and they will benefit from South Africa's rising volumes.
- For as low as US$0.10 each, Sierra Leoneans worldwide can now send and receive SMS messages through an international text messaging platform launched by U.S.-based Teleficient. The service, which connects with all mobile carriers worldwide, can be accessed up via the company’s website, and allows messages to be sent by either mobile phone or computer. This way, Sierra Leoneans can text for a flat rate of $0.10 per international text wherever you have mobile phone or can access the Internet.
- Mobile solutions provider Thumbtribe has created a directory of top local mobile sites called 'Best of the mobile Web'. According to the company, the directory focuses on the top South African mobi-sites where users can find content divided into 17 categories, including news, sport, celebrities, brands, and downloads. Sites include well-known media brands like MNet, TimesLive, Junkmail, Private Property, Car, Getaway, Soccer Laduma, You magazine, Shape and Sports Illustrated, among others.
- The chairperson of the Dar es Salaam Stock Exchange (DSE) governing council, Mr Peter Machunde, has resigned over what appears to be pressure over his opposition to the recently enacted Electronic and Postal Communications (EPOC) Act, 2010. The Bill had a number of contentious clauses, including the one compelling mobile telephone companies to list at the DSE, and was strongly opposed by the firms.
NOG-11 AND AfriNIC-12 MEETINGS
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.
WEST AND CENTRAL AFRICA COM
16-17 June 2010, Le Meridien, Dakar, Senegal
Following 2 incredible years in Nigeria, West & Central Africa's ONLY dedicated event telco returns to Senegal.
Join 700+ decision makers and a panel of 50+ visionary speakers including 25 CEO level operators for a pre-event seminar on Fibre Optics, a 2 day strategic conference and 50+ stand exhibition.
Gain all the contacts, insights and ideas you will need for your operations in the region.
For further information visit Informa's website
COMMON RESPONSES TO A GLOBAL CHALLENGE
17-18 June 2010, BIS Conference Centre, London, UK
With the critical information infrastructure of Estonia coming under attack in 2007, the focus of Cyber security was elevated from an individual perspective to a National perspective. Importantly this incident highlighted the need for developing countries to implement robust and effective Cybersecurity frameworks, without which the entire Cyber World will be at risk.
Continuing with the work carried out by the Global ICT stakeholder community, most notably ICANN and ITU, the CTO’s Cybersecurity Conference aims to:
Create awareness of the many facets of cyber threats and alert stakeholders of the need to adopt robust Cybersecurity frameworks
Build capacity of the key decision makers in developing countries to implement strategies aimed at preventing and responding to the growing menace of Cyber threats
Provide the key decision makers with the means to adopt resilient technical measures, establish appropriate organisational structures and create robust legal/regulatory frameworks
Promote international cooperation in Cybersecurity to help developing countries to leverage the strengths of developed countries
Broker partnerships between the different players in Cybersecurity to facilitate the flow of information, expertise and resources
For further information visit the CTO's website
CAPACITY AFRICA 2010
21-22 October 2010, Nairobi, Kenya
The most comprehensive African wholesale telecoms conference bringing together local and regional fixed-line and mobile operators from across the continent
For further information visit Capacity Media's website
[HIPSSA/CA-4] Calls for Applications for the development of ECCAS model laws on electronic communications
For this HIPSSA project’s activity implemented in collaboration with the Economic Community of Central African States (ECCAS), a team of two consultants will be set up.
The team will be responsible for developing ECCAS model laws on telecommunications and ICT and assessing the national legislation and regulations for telecommunications and ICT of ECCAS member states.
A senior legal expert will work in collaboration with a senior regulatory expert.
To download the job description, please click on the job’s reference number. For further information visit the ITU’s website
CCK and PortinXS - Kenya
Netherlands based PortingXS says that it has won a contract from the Kenyan telecoms regulator to manage Mobile Number Portability in the country. PortingXS will start number portability services in a few months, depending on the consultations with national providers and the Communications Commission of Kenya (CCK).
iBurst and Ciena – South Africa
Ciena(R) Corporation, a network specialist, announced that iBurst, South Africa's leading wireless broadband service provider, has deployed Ciena's Carrier Ethernet Service Delivery (CESD) platforms in an innovative transport network capable of supporting wireless backhaul for 3G and 4G wireless networks. iBurst has replaced its existing Layer 2 infrastructure with Ciena's wireless backhaul solution, which leverages connection-oriented Ethernet, to provide higher performance service levels in its radio cell collection network. This architectural approach has enabled iBurst to develop a highly-resilient and scalable wireless backhaul network.