Issue no 543 25th February 2011

top story

  • With the changing of the guard at Africa’s mobile operators, their CEOs seem to be in the mood for a significant degree of disclosure. Last week it was the turn of Bob Colleymore, CEO of  Kenya’s Safaricom. This week, it’s Rajan Swaroop, CEO of Airtel Nigeria. He talks to Russell Southwood about the performance of this most important and largest of all of Airtel’s country markets.

    Q: What are the differences you see in Airtel in Nigeria and from your experience in India?

    A: There are two reasons for differences. Either because the company has been managed in a different fashion or because the people are culturally different. Most of the differences I see arise from the way the company was managed. In India, there is a high level of accountability. Here things like quality and cost might have been forgotten and this may be as a result of the last management or multiple past managements.

    There is an issue of (employees) understanding where their boundaries are. We’re an entrepreneurial set-up and there are few boundaries. Here there was an attitude, I’ve done my bit, I don’t go outside my boundaries. That’s not cultural, that’s a people issue.

    Q: How might this affect your ability to compete in the Nigerian market?

    A: There is a difference in the way the whole industry is here. It is more competitive and therefore operators themselves have speedier systems to market. It’s about getting ahead of the competition and this has been a good ground for MTN. There has not been significant competition to them (in the past), only pockets of competition.

    Q: So will you adopt the low tariff strategy that Airtel has introduced in places like Kenya?

    A: We have not dropped prices significantly (in Nigeria). It’s no good having a too good N12 product that is actually a N14 product. But with our new tariffs, we’ve created excitement and pull.

    Q: Has it actually changed your overall market share?

    A: There’s not been huge numbers but there has been some change. We wanted to see what kind of reaction there would be to this kind of offer and galvanise our sales distribution process. The question was: can we galvanise our own teams. If the answer was positive, then I think we can stand and fight. We didn’t want to do disruptive price packages because we don’t believe the lead to customer stickiness or loyalty. I’m going to see how I can take some customers from others but we don’t want to destroy the value in the business.

    Q: That’s voice. What’s happening with your data offer in Nigeria?

    We’re building a 3G infrastructure and by the time we’re finished, we will have covered 70-80% of the population and that’s maybe one year away. We currently have 100,000-150,000 subscribers but we believe the overall potential for is something like 2 million subscribers out of an overall  total of 16 million.

    Q: Are you going to be offering data to the home like some of your competitors elsewhere?

    A: Data to the home is driven by FWA and DSL and we’re not going to be doing that. We’ll stick to data on mobile.

    Q: Glo has been testing LTE. Will you also be doing it?

    A: Not yet.

    Q: What is happening about the introduction of Zap Money in the Nigerian market?

    A: Regulation of this sector is governed by the Central Bank of Nigeria and it has come up with its own criteria for mobile commerce. A bank would have to hold the licence for this activity. But it’s not clear how things will work out. The Central Bank of Nigeria has asked for proposals from the banks and then it will licence them. The model will be one where the banks and mobile operators all sit on the same platform in partnerships. It may take up to a year for anything to happen.

    Q: What’s the position in terms of the international fibre and your acquisition of capacity?

    A: We have taken capacity on both cables (Glo One and Main One). The price per meg is down to US$300-350 per meg per month at volume and this price is a substantial drop and what was available previously. We will probably double our capacity in the next 6-12 months and prices will come down again. They are currently pretty high compared to rates across the world. In India, it’s sub US$10 per meg.

    Q: So what are you keeping satellite for? Remote base stations?

    We’re in the process of exiting existing contracts and we only have a very small number of base stations on satellite.

    Q: Basic mobile services are all very similar outside the branding. How do you differentiate yourself?

    Services are sometimes down from one network therefore customers use another network. Therefore the first thing to do is to have a high level of availability. We want to take it from 95% to 98%+. The closer you get to the higher number, it gets more difficult. We need architectural changes and to manage infrastructure differently. Unfortunately factors like theft of diesel at base will not allow us to reach the levels achieved in India. This is a key enabler for loyalty.

    Q: What about customer care which operators often say differentiates them?

    A: We need to provide higher levels of customer service. 90% of our customer care calls failed to get though to the call centre. We’ve added 1,400 people and bought this number down by 30%. By April this year, we should have cleared the backlog out and got that figure down to 5% or less. We’re also enabled customers to use self-help services. And for example on what’s the balance a the end of a call?, we pumping up capacity on that. We’re setting a level of quality of service we should be able to sustain.

    Q: How is the business performing financially?

    A: Over the last 12 years, the performance of the business has been declining. Therefore the question is: how do you not allow it to decline? We have a major investment in infrastructure but that should be self-funding and we hope to be cash-flow positive in 18 months time.

    We want to encourage the regulator to introduce Mobile Number Portability. Then the best provider will be successful.


  • Mobile users in Rwanda will have to wait a little longer to start enjoying Mobile Number Portability (MNP), a service that allows subscribers of one network to migrate to another network while maintaining their original phone number including the network code.

    Rwanda Utilities Regulatory Agency (RURA) says that it is putting the move on a hold to allow current mobile operators to consolidate themselves in the market. The service was expected to be introduced this year.

    "We have decided to postpone the introduction of the service to 2012 because the market is not yet ready for it; we also want the market to have a 60 percent (mobile) penetration," RURA's Director General, Regis Gatarayiha told Business Times in phone interview.

    The country has 36.2 percent mobile penetration, the second lowest in the East African Community (EAC) region after Burundi.

    "The bigger advantage for a subscriber comes in the form of better network connectivity with competitive tariff plans. Only those service providers who will deliver on these two fronts will retain a customer," Gatarayiha explained.

    The New Times
  • Moroccan mobile, fixed and broadband group Maroc Telecom’s consolidated subscriber base grew by 19% in 2010 to reach 26 million customers, the company announced this week.

    With operations spread across Morocco, Mauritania, Gabon, Burkina Faso and Mali, revenues for the year grew by 4.3% to MAD31.7 billion (USD3.8 billion). Operating income rose 2.3% to MAD14.3 billion, representing an operating margin of 45.3%, whilst group net profit increased by 1.2% to MAD9.5 billion.

    The operator added that it forecasts ‘moderate’ growth in revenues in 2011, with profitability levels expected to be ‘maintained’. Domestic revenues for 2010 totalled MAD26.2 billion, an annual increase of 1.7%, helping to drive a 1.0% operating profit increase to MAD13.2 billion, as the Moroccan mobile customer base grew by 10.6% to 16.9 million.

    3G/3.5G mobile broadband internet subscribers more than tripled during the year to reach 549,000, overtaking the operator’s ADSL fixed broadband base. Maroc Telecom’s other African subsidiaries had a total of 6.8 million mobile customers between them by end-2010, up 58% year-on-year.

  • The Executive Vice Chairman of the Nigerian Communications Commission Engr. Eugene Ikemefuna Juwah has emphasized the need for cooperation among all the regulatory agencies in the country to ensure interest of government and business operators are not jeopardised.

    Engr. Juwah who was a guest to Corporate Vanguard last week said the NCC is the agency that is charged with ensuring that environmental standards are maintained in the setting of masts at base stations.

    He said that "by law, the operators should carry out the environmental Impact Assessment (EIA), whenever they want to build their base stations, which is done in conjunction with the environmental agencies concerned. However, we actually should be the organ that should set these standards because we regulate the telecom industry".

    There have been issues between telecom operators and NESRA over violation of environmental standards in setting up of telecom masts at base stations Engr Juwah said "I know there was a time when telecom operators were having issues of Environment regulators over the masts at base stations, We are supposed to be the one to give them this standards. We know base stations. We know if they are radiating bad waves and by law, we are authorised to define this standards. There are issues that we will continue to dialogue with our sister agencies”.

    “We have been talking and dialoguing with them. We give them this standards. We can go as far as measuring this standards for every base station in this country and certifying it for them".

  • MTN wants to become a serious force to be reckoned with in the mobile content and application space, with plans to launch an app store and offer digital music downloads and other value-added services.

    The strategic shift in direction comes as growth in data on networks in the 21 countries in the Middle East and Africa in which it operates continues by far to outstrip the growth in its traditional voice business. The group had more that 116m customers on its books at the end of 2009.

    Christian de Faria, formerly the vice-president for MTN in West and Central Africa and now the group’s senior vice-president for commercial and innovation, is leading the initiative.

    De Faria, who has also taken on procurement and marketing responsibilities for the group, says the rise of services like Facebook in recent years have resulted in a dramatic change in the way consumers use their phones. He says MTN has to respond to these changes if it’s to prosper in a world of smartphones and tablet computers.

    “The time when operators could dictate what they offered to customers is over,” he says. Competition has increased dramatically in the markets in which it operates and consumers are being exposed to an ever-wider spectrum of products. “We realised we needed a function at group level that could really ensure we were on top of the game.”

    Though De Faria is reluctant to provide details of what an MTN-branded app store might look like, or even what it will be called, he hints that a number of offerings are in the pipeline, including a digital music download service. “We have concrete plans to broaden our offering in music, but I can’t be more specific. It is our strategic intent. But that’s all I can tell you at this stage.”

    Operators worldwide are concerned that they will become little more than low-cost (and low-margin) “dumb pipes” over which third-party developers will provide and profit from services. It’s clear MTN doesn’t want to be left out of the application and content party.

    “It’s no longer about selling airtime,” De Faria says. “Now it’s about bundling airtime with products and services. We need to ensure we can offer a range of services, from app stores to music to value-added services like m-health.”

    MTN, he says, is “shifting from distributing airtime to being a solution provider” to customers. “We could do it on our own, but we are going into partnership with content providers to offer services such as cloud computing, solutions for small and medium enterprises and to provide rich content in terms of music, gaming, entertainment and news.”

    These services will begin to be rolled out in 2011, though De Faria is reluctant to say when an MTN-branded app store or music service will be launched, citing competitive reasons.

    Although the shift in focus will mean that MTN will compete more directly with products such as Apple’s iTunes Store and Nokia’s Ovi Store, he says the group is also keen to work with those companies to provide services.

    “We have to develop solutions on our own or together with partners,” he says, adding that MTN won’t create a division specifically staffed to develop apps that compete with products like Facebook.

    MTN is already working on payments engines to make it easier for its customers to purchase apps and content. De Faria says the group wants to make it easy for consumers to buy services, even if they don’t have a credit card — using mobile wallets or airtime for payments, for example.

  • The Competition Commission of Mauritius (CCM) announced an investigation into Mauritius Telecom’s MyT offering under the Competition Act 2007.

    MyT is a ‘bundled’ product offering high-speed internet access, TV, international calls and other services as a package. The Competition Commission is concerned that Mauritius Telecom might be using its effective monopoly of the ADSL (broadband internet) products to gain a competitive advantage in the sale of competitive products such as TV services and international calls. This could take the form of refusal to supply the higher-speed ADSL products except as part of a package, or for example through pricing the MyT bundle against the “ADSL-only” service in a way that unduly influences customers to choose MyT.

    The investigation is being carried out under the “monopoly situations” provisions of the Competition Act. If following an investigation and report by the Executive Director, the Commission finds that MT’s actions have the object or effect of “restricting, preventing or distorting competition”, then the Commission can impose remedial measures on MT. Whatever the outcome, there is no possibility of any financial penalties being levied in this case, as these relate only to collusive agreements between several competing companies.

    John Davies, Executive Director of the CCM said: “Several people have come forward to express concern about MT’s ‘MyT’ offering. The package mixes together broadband internet – a product in which MT has a monopoly - with products such as international calls and TV services, in which it competes with other companies. There is nothing necessarily wrong with that. Such packages might be in the interests of vigorous competition and convenient for customers. But if customers are unduly influenced towards buying TV services and international calls from MT, just because of its broadband monopoly, that could damage competition in those markets. I decided that we needed to investigate this matter in detail, in order to understand whether the current offering has anti-competitive effects. I look forward to working with MT, its competitors, ICTA and other interested parties on this matter.”

    The CCM has a memorandum of understanding (MOU) with the Information and Communications Technology Authority (ICTA), setting out how the two agencies will work together in exercising their respective powers in the sector. Under the provisions of the MOU, the CCM has informed the ICTA of its intention to investigate this matter and the two bodies have agreed that it is more appropriate for the CCM to act, in this instance. The CCM will conduct its investigation independently, but will seek the advice and opinions of the ICTA throughout the case.

    If it finds a breach of the monopoly provisions of the Competition Act, following an investigation, the Commission has the power to force sales of assets or businesses, or require changes in company behaviour, to remedy the situation.
    The investigation is expected to take about a year.

  • Portugal Telecom (PT), the largest telecommunications provider in Portugal, regards Africa as "a priority" and Mozambique as "a strategic market", according to the company's Chief Executive Officer, Zeinal Bava. Speaking at a Maputo press conference marking the second anniversary of the launch of the PT internet portal, Sapo, in Mozambique, Bava said that PT's ambition "is to be in the Mozambican market in the medium term" - despite the failure of its bid for Mozambique's third mobile phone licence. Portugal Telecom has long regarded Africa as a strategic priority but has made little progress in realizing its ambition.

    MTN has signed a deal with the German Society for International Cooperation (GIZ) to manage the disposal of old cellular handsets and create development in the electronic waste (e-waste) industry in South Africa. The deal was signed by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development, and is aimed at increasing awareness of safe recycling of electronic products.

    Determined to succeed in the planned SIM card registration, the Nigerian Communications Commission (NCC) has come out tough on telecom operators, directing them to place all new SIM cards on 'receive only' in a bid to ensure compliance with the ongoing nationwide subscriber registration. NCC issued the directive to operators that new SIMs released into their distribution and sales channels must not be activated to make calls until their users have been registered.

    The leading two mobile phone firms, Safaricom and Airtel, have scooped a number of awards at the premier Mobile World Congress is Barcelona, Spain, putting Kenyan's name into the global map of innovations once again. Airtel Africa scooped two awards at the premier Mobile World Congress (MWC). The telecom services provider was awarded the Best Mobile Money Product; and Best Customer Care and Customer Relationship Management for its recently launched payment product known as Airtel OnLine Pay and a customer relationship management solution named Airtel Treasure Hunt. Safaricom bagged the Mobile Money for the Unbanked Award courtesy of its money transfer service M-Pesa.

    Millicom International Cellular (MIC) S.A., operator of the Tigo brand has blamed the relatively low revenue from its Africa operations in 2010 on the telecom price war in Ghana and Tanzania. The company also blamed its relatively low additional customers of 320,000 in the fourth quarter of 2010 on SIM card registration in the same countries.  This is in the company’s annual report ending December 31, 2010.


  • Baharicom has refuted speculation that the R5.4bn ACE cable is no longer coming to South Africa’s shores. TechCentral reported earlier on Monday about growing speculation that the cable, which runs from France, will terminate instead at São Tomé and Príncipe, a Portuguese-speaking island nation in the Gulf of Guinea in West Africa.

    The speculation prompted Steve Song, author of a well-known cable map, to recraft the map to show Ace terminating at São Tomé. Baharicom, one of the larger investors in ACE, says the cable is still expected to arrive on South Africa’s shores sometime between August and October next year. However, Sentech, the original landing partner, is no longer involved.

    Parliament revealed last year that Sentech had signed a partnership agreement with the Ace consortium to use its licence to land the cable in the Western Cape. “We are in advanced discussions with two SA companies that have valid licences, one of which will land the cable,” says Baharicom CEO Carey Phillip.

    He will not say which two companies are vying to land the cable as discussions are ongoing. However, he says government owns neither of the companies. Phillip says more details should be available within the next fortnight.

    ACE will follow a similar course of its direct competitor, the West African Cable System, better known as WACS, which is expected to be ready for service later this year. Both cables have design capacities of 5,1Tbit/s.

    Phillip says construction of the Ace cable began in December and the project is on track to arrive at Yzerfontein, north of Cape Town, late next year. “How much of the capacity we light up when the cable goes live will depend on the demand in each country,” he says.

    Alcatel-Lucent has won the construction and maintenance agreement for the cable, which will extend for 17 000km along the coast and offer terrestrial links to landlocked countries like Mali.

  • The government will develop a content management web portal to market Kenyan films on a digital platform to raise international visibility. The portal, to be run by the Kenya Tourist Board (KTB), will showcase the sectors' products that players say have been hit by poor marketing and lack of awareness. According to Information PS Bitange Ndemo, this will save producers the costs of marketing and distribution.

    "The Kenya Tourism Board through the content management portal will host all our local productions and make them accessible for preview and e-commerce," said Dr Ndemo during the release of a research to establish the economic contribution of film and TV industry in Kenya.

    "Distribution and exhibition of films in Kenya is almost non-existent. The majority of the theatrical distribution industry in Kenya is predominantly located in Nairobi," the research reads in part.

    The study, done by Strategic Public Relations and Research Limited says that majority of Kenyans prefer watching movies from their houses, vindicating the shifting of viewership trends to homes that has seen several theatres close.

    According to the study released by the Kenya Film Commission, 85.1 per cent of the respondents watch movies in their houses, 18 per cent watch movies in theatres, 4.7 per cent watch movies in their local or estate movie halls and 2.8 per cent watch movies via mobile cinemas.

    Rental shops remain the best source for movies with 48.9 per cent of the respondents saying they source their movies from rental shops, 31.8 per cent source from street vendors, 6.7 per cent get theirs from film theatres, 6.7 per cent from supermarkets while 3.5 per cent download movies from the internet.

    The web portal will shift the source of information about local movies to the internet as film producers will be expected to present their work alongside short previews for the purposes of teasing the audience.

    Analysts say the growth in take-up of 3G handsets, smartphones, iPads and other portable devices, the proliferation of high-speed fixed and mobile internet connectivity in the country will be the key drivers of the online marketing tool. The study reveals that the film industry contributed Sh1.8 billion directly to the economy in 2008.

    Indirectly the sector is estimated to have generated Sh48billion from ripple effects that include proceeds from filming licences, visa application fees for foreign film makers, tourism, spending by film makers in local hotels, skills and labour supply, culture and merchandising. The Film Commission says the sector is currently generating over Sh3 billion annually.

    The study cites high costs of production and the perception that Kenyan movies are inferior as some of the challenges stifling the sector's growth. "But it is difficult to tell the exact value of the industry since it's not mandatory to register a film or television production," said Peter Mutie, CEO of the Kenya Film Commission.

    Bitange says research findings will help the ministry to lobby for a revolving fund to support the local producers."We have been missing figures to use to convince the government on the contribution of the film industry on the economy. With this study, we can now convince the relevant ministries abotu the need to set up a revolving film fund to promote the industry," said Dr Ndemo. "Banks will also begin to understand what is happening in the sector," he added.

    The faster internet speeds have also been blamed for the sectors' woos having made it easier for traders to download movies and re-produce them in a matter of hours denying movie houses revenues a move that has seen several cinema halls in Kenya including Kenya Cinema, Odeon Cinema, Globe Cinema and Shan Cinema close shop.

    South Africa's Nu Metro exited the local market last year and sold its assets to Nigeria's Silverbird after it failed to stem losses. The research recommends calls for a study to estimate the revenue lost as a result of piracy as part of the contribution of the film industry to the Kenyan economy.

    The Copyright Board of Kenya launched an authentication device to be placed on all audiovisual material meant for sale to clamp down on the pirated movies. But the survey finds that Kenyans prefer to watch movies with local content over those with foreign content. In the survey 41.6 per cent of respondents said they would prefer to watch local productions while 35 per cent are slightly likely to watch a movie with local content over foreign content.

    Daily Nation
  • Vodacom answers questions as to why they haven't reduced their data pricing and suggests that rigid contract terms may become a thing of the past

    A couple of weeks ago I wrote a letter to Vodacom. To be fair I could have addressed that letter to MTN as well, but as a long term Vodacom customer I have a vested interest in getting the chaps from Midrand to deliver better value to their customers. Writing about what you know is also a lot easier than writing about abstract concepts.

    As a result of the letter, I was summoned to Midrand to answer for my impertinence. Okay, the truth is that Richard Boorman (the media liason at Vodacom) called me and asked if it would be helpful if I sat down with Pieter Uys (the Vodacom CEO) and had a chat about some of the issues I had raised. Of course I agreed. The discussion with Uys ranged fairly wide and as such there are a few issues that he touched on that I would like to talk about.

    One of the issues I raised in the letter was how Cell C appears to be kicking Vodacom all over the place in the broadband market. When we are paying significantly higher prices per MB on Vodacom than we are on Cell C, it would appear that Vodacom are falling behind the curve. Uys said that the price of data was going to fall, but that to engage in a wholesale price slashing would have a real impact on the quality of service that Vodacom customers experienced on its network.

    The problem Vodacom is facing is that while Cell C has built its HSPA network out in limited areas, Vodacom has a nationwide broadband network; a total of 4,000 base stations. That is out of the 8,000 base stations that Vodacom has in total across its network.

    Right now the bottleneck on the network is backhaul, getting data from the base stations to the core network. In most of the metropolitan areas Vodacom has built out a fibre network to enable it to self-provision the connections to its base stations. Although the core network is mostly built, Uys said that the company is having real problems getting local municipality approval to lay the cables that connect the base stations to the core network. That would require some digging and approvals for doing that have not been forthcoming.

    With a bottleneck on the network that already provides internet services to 9 million of its customers and which has 2 million regular users, you can understand why the company is not exactly keen to encourage even more people to use the network. The fact is that the more people that use the network the lower the quality of service will be. Encouraging power users to hammer the network by dropping costs will reduce the experience of the network for all users and I think we can all understand why Vodacom would not want that to happen.

    My impression is that Uys knows that broadband prices are higher than they should be but that the company is holding them steady until the network is ready to cope with additional load. His argument that it is better to provide a steady 1Mbps to all consumers than 42Mpbs to one consumer is something that resonates with me. Leave the heavy downloads to the wired connection and give us a decent connection for our smartphones, tablets and laptops and you will keep most of your customers happy most of the time.

    The other issue that I raised was that of contracts and why, in my view, contract customers seem to get the short end of the stick. Uys said that there have been, over the past year, increases in the amount of free minutes that contract customers have been entitled to as a way of increasing the value that they get from their contracts.

    The more pertinent issue is that looming on the horizon is the consumer protection act. This act will fundamentally change the way that the mobile networks structure their contracts. According to Uys, we can expect to see various contracts that offer: just a basic connectivity contract; a contract with a financed phone; and a contract with a subsidy and a financed phone. Essentially the consumer protection act allows you to cancel a contract at short notice with only limited recourse on the part of the service provider to penalise you. He said that if these new contracts aren’t already available they will be very shortly and that is good news for all of us.

    I would have preferred that Vodacom (and the other networks as well) were more proactive in getting their contracts in line with what they will be forced to do when the consumer protection act comes into effect, but at least when it does happen we should all be a bit better off.

  • The Europe India Gateway (EIG) undersea cable system is live and ready for commercial use. The cable will provide additional capacity to North Africa and provide an alternative route for telecommunications traffic for South African operators. A consortium of 16 operators from the Middle East and Africa, including Telkom and MTN, funded the US$700m system. India’s Bharti Airtel will manage the networking on the cable.

    Twenty four percent of adults living in urban centres are now using the internet, according to the latest Zimbabwe All Media Products and Services Survey (ZAMPS). The figure represents a 2 percent increase in the last 3 months alone. Most people are accessing the internet from internet cafes, some have access at their work places and at home, and around 2 percent are using mobile broadband. The power of new social networking tools like Facebook also came to the fore, with the research showing this website to be the most popular among Zimbabweans. Around 83 percent of internet users go online at least once a week or more.

    The El Moudjahid website is reporting that Algeria's telecoms regulator, Autorite de Regulation de la Poste et des Telecoms (ARPT) has withdrawn the operating licences of 34 internet service providers (ISPs) with immediate effect. ARPT has declared that the ISPs have neglected to pay their annual licence fees or 'number management service charges', despite prior notifications. The ARPT has reportedly said that the licence cancellations do not affect its right to pursue legal action and recover the debts in court.

    South Africa’s SNO, Neotel does not have immediate plans to offer FTTH services. Neotel CTO Angus Hay said that they have no short term plans to roll out a fibre access network to residential customers as the business case simply does not make sense.


  • Members of the East African Legislative Assembly (EALA), last week began a five-day tour to assess the state of information and communication technologies within member states.

    They are members of the Committee on Communication, Trade and Investment in the regional assembly.

    The delegation which is led by Dr James Ndahiro, the chairman of the committee, will establish the impact of ICT development in the region, especially of new infrastructures like the fibre optic cable.

    According to a statement from EAC secretariat, the delegation will meet various stakeholders in the ICT sector in all member countries. The findings of the tour will acquaint EALA members with pertinent facts on the status of ICT development in the region, existing opportunities and challenges associated with the sector.

    The Committee is expected to take stock of the observations and recommendations and report back to EALA. The tour will further devise ways and means of how the environment and human population can be protected against negative effects of the ICT gadgets used in connectivity.

    The New Times
  • The Parliamentary Accounts Committee has endorsed the proposal to set up a technology park at Konza, Eastern Province. This means that the centre, known as Konza Technology City, and intended to be one of the key ICT sites in the country, will be built as planned beginning June.

    The centre will be put up on a 64 square-mile stretch covering about 5,000 acres of land. The Ministry of Communication and Nairobi Metropolitan said that all preparations had been finalised. Nairobi Metropolitan Permanent Secretary Philip Sika said his ministry would be launching the project master plan next month.

    He said the park will have a more modern plan that will take into consideration possible expansions in future. Poor planning is one of the reasons blamed for congestion in Nairobi and other major towns in Kenya. The centre was proposed last year as one of the key drivers of the achievement of Vision 2030.

    The government has already allocated Sh1 billion for the initial stages of the project although the entire initiative is estimated to cost as much as Sh1.2 trillion. A feasibility study has already been conducted and according to Information permanent secretary Bitange Ndemo, Konza will be the most strategic place for the project.

    The government will use the construction to woo organisers of the GSMA annual conference to be hosted in Kenya in 2018. "We are doing everything to ensure that we've put up all facilities for that conference to be held here (Konza)," Dr Ndemo said.

    The annual ICT conference is usually hosted in one city for five consecutive years before moving to another and requires massive investment in accommodation facilities as well as communication and transport infrastructure to cater for over 60,000 delegates who attend.

    New structures like railways, roads, technology firms and stadia are likely to come up. Dr Ndemo said the government is planning to set up a link road between the Mombasa highway at Konza to Namanga to cut the distance covered by tourists between Amboseli National Park and the proposed hotels that will be built at the city.

    Much of the funding will come from the International Finance Corporation. However, private investors were also invited last year to take a share of the project. House team chairman Julius Kones dismissed earlier reports that the local community had rejected the project.

    Daily Nation
  • South Africa’s National treasury has allocated R2.2bn over five years for the department of home affairs’ “Who Am I Online?” project, which has been stalled by a legal dispute with Gijima, Finance Minister Pravin Gordhan said in his budget speech on Wednesday.

    “Although only partial funding has been allocated for the project, national treasury has approved the business case for the total lifecycle cost of R2.2bn beyond the [next three-year] period.” The department suspended a contract with Gijima (formerly GijimaAST) after it emerged that it was awarded R4.5bn, though the tender limit had been R1.9bn.

    Gijima threatened legal action, but is currently in the final stages of talks with the department, treasury and the SA Revenue Service about an out-of-court settlement, according to home affairs minister Nkosazana Dlamini-Zuma.

    She expressed frustration last week that the dispute had forced her department to put on hold plans to set up an integrated IT system to process identity documents, birth and death certificates, visas, work permits and passports online.

    Dlamini-Zuma said a settlement was imminent, but denied reports that the state had agreed to a R2bn pay-off for Gijima. Gordhan confirmed that to date, R390.4m has been spent on the stalled project. Home affairs’ other allocations in treasury’s estimates of national expenditure document show that streamlining immigration processes and regularising the status of immigrants from Southern Africa remain a top priority.

    The department’s immigration budget of R587m will be spent on extending the special dispensation of documenting illegal immigrants from Zimbabwe to other nationals in SADC, overhauling immigration management and facilitating entry for foreign nationals with special skills.

  • Zimbabwe’s local software dealer Chips Computing Services walked away with six awards for its role as a Sage software dealer at a recent Softline conference in South Africa.

    Nigeria's NGOs have been told to work out plans of action that would enable them have access to the digital solidarity fund being made available by United States agency at the Nigerian Communication Commission (NCC) meant for the development of Information Technology (IT) infrastructure in developing countries. Former Minister of State, Information and Communication, Alhaji Ibrahim Nakande who made this call, said that the fund was made available by the USA to help developing countries have access to computers and internet connectivity, but regretted that not a single agency or NGO in Nigeria had made use of it.

    The United Nations agency tasked with promoting education and the West African monetary union have signed an agreement to launch a $12million project to boost the information and communications technology (ICT) capacity of universities by creating a regional virtual library network.

Mergers, Acquisitions and Financial Results

  • Mobile operator Telekom Networks Malawi (TNM) has announced its results for the twelve months ended 31 December 2010, reporting a 21% year-on-year increase in revenue to MWK9.93 billion (USD64.8 million). Earnings before interest, tax, depreciation and amortisation (EBITDA) for full year 2010 totalled MWK3.647 billion, up 25% compared to the MWK2.91 billion reported in the previous year.

    TNM attributed the rise in turnover and EBITDA to aggressive investment in infrastructure and related marketing activities. However, rising investment increased the depreciation charge by MWK571 million in 2010 to MWK1.61 billion and increased the levels of short-term debt, which resulted in a rise in borrowing costs by MWK273 million. As a result, net profit declined from MWK1.21 billion in FY 2009 to MWK1.06 billion a year later.

    The company said its key achievements in 2010 included the commissioning of a new pre-paid billing platform, the construction of 70 new base stations to boost coverage, and the launch of new voice and data tariff bundles for pre-paid users. TNM said it increased its market share from 33% to 37%, but did not release any subscriber figures.

  • The World Bank has provided $79 million - that is, about N11.8 billion - financing for IHS Plc, one of Nigeria's leading telecommunications infrastructure providers, to help it develop mobile phone coverage infrastructure across the country.

    The fund, which is coming through International Finance Corporation (IFC), the private sector arm of the World Bank, would enhance IHS's efforts to build and acquire mobile phone towers in Nigeria and sub-Saharan Africa, thereby reducing communications cost across the region.

    This Day gathered that the World Bank investment, which is subject to regulatory approval, came after the signing of an agreement between Investec Asset Management (via its African private equity funds), IFC and the Netherlands Development Finance Company (FMO).

    IHS is one of the largest telecommunications infrastructure providers in West Africa with more than 2,700 towers under management and is aggressively expanding its ownership and leasing operations throughout Africa.

    The company owns, manages, and leases space on its mobile towers to telecom companies, helping to bring down costs, expand coverage, accelerate technology rollouts and improve the quality of service for subscribers in Africa.

    Commenting, Executive Director, IHS, Issam Darwish, said: "the additional financing package also include up to $115 million of IFC-led senior debt, mezzanine and syndicated loans, which will allow us to continue our leadership role in providing managed and co-location services to mobile operators and users in Africa."

  • Mobile operator Essar Telecom Kenya Ltd operating as yu, has terminated its contract with its sister firm Aegis Services Kenya Ltd, raising anxiety for more than 70 customer care employees over their jobs.

    The operator has instead opted for Horizon Contact Centre to handle its call centre services with affected employees being asked to reapply for their positions.

    This comes at a time when heightened competition, which has seen mobile tariffs fall to as low as Sh1 per minute, coupled with the enlisting of subscribers with low disposable income has seen the average revenue per user (ARPU) drop to record lows.

    Aegis, in its communication to employees, says its contract had been terminated by Essar Telecom and hence has been forced to move out of Kenya. "The business has been awarded to a new service provider. As a result Aegis has been given notification that they were not the successful service provider," said a communication to employees.

    Some of the staff, whose contract expires on February 28, 2011, told the Daily Nation that most have not been recruited by Horizon, while those who have been taken in will receive nearly half pay of what they have been earning.

    When contacted, Essar Telecom Kenya country manager Atul Chaturvedi said that Aegis along with three other local Kenya operators were recently evaluated for call centre business with Horizon Contact Centre emerging victor. "Aegis, like any other business organisation, assessed their business plans and have expressed their intention to withdraw their services in Kenya," he added.

    He, however, refused to discuss salary issues raised by employees, saying that Essar Telecom has no role in deciding the contractual terms of the agents who work on their assignments.

    Daily Nation
  • The Social Security Fund of Rwanda (SSFR) is Rwf125.65 million richer, after its Safaricom shares recorded a higher dividend over 2010. SSFR owns 0.24 percent shares in the giant Kenyan telecom company.

    In 2007, the Fund bought Rwf4.2 billion worth of Safricom shares. SSFR’s returns from the telecom company in 2009 were Rwf68.9m.

    Facing tight competition from major telecom companies like Airtel, Orange and YU, Safaricom is the market leadership with 78.3 percent or 17 million subscribers and a net profit of 15 billion Kenyan Shillings in 2010.

    A source at the Fund disclosed to the Business Times: “Shareholding by SSFR is a long term investment and does not immediately result into profit. Currently SSFR maintains a 2 percent increase in interest rate annually for clients who have been contributing for fifteen years and more.”

    Currently, SSFR holds shares valued at Rwf38.6 billion in 17 companies. In 2010, it registered contributions worth Rwf17.3 billion from its 37,274 members.

    The New Times
  • The Bureau of Public Enterprises (BPE), last week, revealed bluntly that it has recommended to the National Council on Privatisation (NCP) to revoke Nitel's sale to New Generation Telecom, the consortium which won the bid to buy it and Mtel since February 16, 2010. The recommendation follows the inability of New Generation to pay the initial 30 percent of the $2.5 billion (N375 billion) it bidded to acquire 75 percent stake in Nitel/Mtel almost one year after they were sold.

Digital Content

  • Competition in the digital marketing field is heating up as firms scramble to gain a larger share of the budding sector. Over five firms are now jostling for a share of the online advertising space, hoping to mark their territory ahead of mass adoption of internet services in the country.

    Analysts estimate that spending on digital media is set to reach Sh200 million by the end of the year on the back of aggressive advertising on social media websites such as Facebook and LinkedIn. Last week, listed media services firm Scangroup deepened its foray into the digital marketing field with the launch of a qualitative research house that will be known as Firefly.

    Scangroup hopes to tap into the growing influence of internet based communication in Kenya by providing specialised research services to companies which are considering using digital marketing. "There are fundamental shifts in how consumers communicate that brands must understand if they are to keep in touch with their customers.

    "In Kenya, a 372 per cent jump in Facebook users over the last year, signals the need for companies to start thinking about reaching their customers on the site," said Rakesh Kumar, Regional Head for Firefly. The venture is the latest in string of moves by Scangroup that have seen it diversify its product offering by creating focused consultancy offices that specialise in targeted communications.

    Recently, the firm launched Squad Digital, a digital marketing firm and a market research and insights company Millward Brown East Africa that Firefly falls under. It also announced a partnership with the South Africa based Smollan Group, a pairing that offered the firm an opportunity to tap into the Sh2.5 billion research industry, taking on incumbents such as Synovate, Research International and Consumer Insight.

    As the latest addition to Scangroup's stable, Firefly will offer corporate clients in the region enhanced research capabilities by helping them to navigate the relatively new digital marketing field, with an emphasis on social media use.

    The last six months have seen heightened interest by investors in social marketing initiatives, with a South African based company, Habari Media, being the latest firm to set up in the area. "The increasing levels of acceptance of Facebook as a major force in advertising have had a momentous effect on the advertising industry as a whole," said Adrian Hewlett, CEO Habari Media.

    Scangroup's competitor in the advertising space, Young and Rubicam, has also restructured its operations to focus on digital marketing in the recent past due to increased demand from clients who want to extend their brand presence online.

    The moves are informed by the fact that Kenya is among the most progressive markets on the continent when it comes to use of social media, with small businesses and news outlets dominating use of websites such as Facebook, Twitter and LinkedIn. According to data from social media monitor Socialbakers, the number of Kenyans on Facebook is growing by 35 per cent every month.

    Socialbakers research reveals that the most active brands on the site belong to Safaricom, Airtel and Yu, while news delivery is dominated by NTV, Citizen and Capital FM, in that order. Apart from the mobile firms, small businesses form the next largest group of users who use social media to market their goods.

    "While small retail outlets are dominating use in the country, the time has come for larger companies to start engaging their customers using social media outlets," said Kate Davidson, Qualitative Director at Firefly.

    According to a study carried out by Firefly in Kenya, 11 per cent of Kenyans have accessed internet in the past four weeks, and among those 53 per cent have accessed it on their mobile phone. This study was carried out across five regions. Firefly says that Kenya has just over one million Facebook users, representing 2.8 per cent of the population.

    Daily Nation
  • The traffic police department has introduced online registration to ease the process of applying for a driver’s license. Chief Supt. Vincent Sano, head of traffic police, confirmed this last week in an interview with The New Times. He explained that registering to sit for provisional tests, one sends an SMS as ‘ID No.-space-District-space-P-space-0’ to 3126.

    For those registering for the practical tests, he said, they send the SMS as ‘ID No.-space-District-space-Category required-space-Number of previous licence obtained’ to 3126.
    Both parties, he added, get a feedback message with the Identity number, district where one will sit the tests from and the category and the registration number, as confirmation.

    “We chose this system to avoid several malpractices that used to arise from the previous registration system,” said Sano. He noted that previously, aspirants would register more than once so as sit for tests in several areas as a way of increasing their chances of passing. He added that some aspirants would also hire people to do the tests on their behalf, and that under age people (below 18 years) would also register for the tests.

    The New Times
  • National treasury has allocated a significant budget to the department of communications over the next three years to assist in the country’s migration from analogue to digital terrestrial television. The department has been allocated more than R1bn over the three years for the project, with the money going to three state organs.

    Sentech, the SABC and the Universal Service & Access Agency of SA (Usaasa), which administers the Universal Service Fund, will play an integral role in the migration. Sentech has been allocated about R622m over three years to build new broadcasting infrastructure using the digital standard. It will receive R279m in the next financial year, R169m in 2012/2013 and R176m in 2013/2014.

    Sentech received R271m in 2010/2011 for migration. Usaasa has been allocated R220m for the subsidy of the set-top boxes (decoders) for the poor. This is in addition to the R180m it received in 2010/2011. The decoders are needed to receive digital TV signals.

    To support Sentech during the dual-illumination period, when both analogue and digital signals are being broadcast simultaneously, the department will give the company R120m the next financial year. It was given R110m in the current year for the same reason.

    The Department of Communications wants 96% population coverage for digital TV by 2013. The target for switchover to digital is December of that same year. To date, the department has allocated R515m for migration.

    This year, government plans to create a decoder manufacturing strategy meant to stimulate the sector. It will also put together a scheme that will govern the subsidy of set-top boxes. The department will present its proposals to cabinet by June. It will also start work on a local content development strategy, which it says should be completed by August.


Telecoms, Rates, Offers and Coverage

  • In Tanzania, telecoms operator Sasatel has launched a new campaign to reward all new internet customers with free unlimited internet access. Customers will enjoy absolutely free unlimited Sasatel internet for one month if they purchase selected Internet enabled phones at newly discounted prices from any Sasatel shops and Dealers' outlets.

    Sierra Leone will be part of the 16 African countries to benefit from the IBM and Bharti Airtel partnership aimed at making mobile communications more affordable as the two firms announced the completion of the IT infrastructure agreement a couple of months ago.

    Angola’s private sector mobile provider Unitel has recently expanded its roaming service to Iraq and now has roaming agreements with 145 countries.

    Airtel Nigeria has once again brought smiles to the faces of post-paid individual customers with the introduction of 2Good tariff for post-paid. Post paid customers will now pay 20 Kobo per seconds for calls to any Nigerian number irrespective of the network and time of the day. Also, calls to Canada, UK and US will now cost 20 Kobo per second.


  • Former Safaricom CEOMichael Joseph has been appointed the first World Bank global advisor on mobile phone banking. Joseph was named a World Bank fellow under a newly launched global fellowship program aimed to tap new expertise into the bank's development work and strengthen its knowledge network.

    In a surprise development, Dave Smith, the CEO of state-owned telecommunications infrastructure provider Broadband Infraco CEO has resigned. The resignation takes effect immediately.

  • 5th Africa Economic Forum 2011
    7-9 March 2011, Cape Town, South Africa Venue BMW Pavilion, V&A Waterfront

    Our 5th Africa Economic Forum 2011 (AEF-2011) in Cape Town at the BMW-Imax Theatre, with Africa Exhibition is a landmark Conference on Africa and significant business networking occasion for the top corporate players active in, across and involved with the development of the African continent - Cape-to-Cairo, with Governments and officials in key industries and state institutions.
    Contact: or click here for further information:

    Cloud Computing World Forum Middle East & Africa
    9 March  2011, Grand Millennium Hotel, Dubai

    The Cloud Computing World Forum Middle East and Africa is a Free-to-attend event and will feature all of the key players within the Cloud Computing and SaaS market providing an introduction, discussion and look into the future for the ICT industry.
    This one day conference will provide the most complete and comprehensive platform for the global Cloud Computing and SaaS industry. Register Free today and get inspiration on how to address your latest issues with advice from real-life end-user case studies and practical examples.
    For more information please click here:  or contact the Keynote team on +44 (0) 845 519 1230 or email

    Broadband World Forum MEA
    14-15 March 2011, Dubai UAE

    Network, learn and do business with 750+ decision-makers from across the regional Broadband ecosystem to deliver you inspiration, insights and ideas that will further your regional business.
    The conference programme features 60+ visionary speakers presenting across keynote plenary sessions, 4 in-depth technology tracks and a Rural Coverage and Connectivity focus day.  Co-located to the conference is a 35+ stand technology exhibition showcasing some of the region’s latest cutting-edge broadband technologies, applications, solutions and services to hit the market.
    Limited FREE passes for operators and early booking discounts apply to all others.  Register with VIP code: BBM11BAA
    For more information click here:

    Event: HR4ICT11 - Business Continuity Planning: Strategic and Organisational Imperatives in a Global Economy
    Date: 21-23 March 2011, Hilton Nairobi, Nairobi Kenya.

    The Commonwealth Telecommunications Organisation is holding its annual HR4ICT Forum in Kenya, beginning 21 March 2011. The event will take place over three days addressing the human resource management aspect of business continuity planning.  With a theme focused on "Business Continuity Planning: Strategic and Organisational Imperatives in a Global Economy", HR4ICT'11 will focus on the challenges faced by major communications user groups (telecommunications, IT, finance, transport, energy, etc) in developing and implementing effective business continuity programmes. Visions, ideas, challenges, needs, success stories as well as best practices on the development and implementation of effective business continuity programmes, will be discussed by a selection of expert speakers.
    For more information click here  or email:

    ICT For Development in Africa – Sustaining The Momentum, Extending The Reach
    23-26 March 2011, Ota, Nigeria

    The conference will initiate research and practice agenda where ICTs will aid the academia, organizations - public and private and non-governmental to improve socio-economic conditions and directly benefit the disadvantaged in some manner.
    For further information click here:

    Managed Services Growth Markets 2011
    4-5 April, Movenpick Jumeirah Beach, Dubai, UAE
    Now in its 4th year and attended by over 200 attendees in 2010, Informa Telecoms and Media’s Managed Services for Growth Markets event will take place on 4th - 5th April at the Moevenpick Jumeirah Beach, Dubai, UAE.With a proven track-record and repeat sponsorship from leading suppliers Alcatel-Lucent, Ericsson, NokiaSiemens Networks and Motorola, this event is truly established as the ultimate meeting-place for the Managed Services industry in the growth markets.A 50% discount for operators ensures a high percentage operator attendance.  Extended break times and additional social functions will guarantee a further enhancement to the already unique networking opportunities. Informa’s Managed Services for Growth Markets conference is the only established event in the region, proven to deliver an industry focussed agenda, the highest level speakers, superior networking opportunities, and top class delegates year on year.
 For more information click here:

    Ghana ICT and Telecom Summit
    28-29 April 2011, Ghana-India Kofi Annan ICT Centre Accra, Ghana

    The summit will bring together over 200 decision-makers from Ghanaian operators and international stakeholders with an interest in the market to share experiences, knowledge and ideas with a view to overcoming the industry challenges. The 2 day summit agenda will address all aspects of Ghanaian ICT & telecoms strategies for attracting investment, broadband connectivity for all, solutions to boost operator ROI, Regulatory challenges & opportunities, infrastructure development, VAS and local content for Ghanaians, subscriber acquisition and retention strategies, mobile banking, customer loyalty, future trends and more.
    For further information visit here:

    eLearning Africa 2011 - Spotlight on Youth, Skills and Employability
    25-27 May 2011, Dar es Salaam, Tanzania

    The 6th event in the series of pan-African conferences and exhibitions will focus on Africa's youth. Africa has the highest percentage of young people anywhere in the world. How can it unlock the vast reservoir of talent? How can technology support education and training?
    For further information visit here:

  • Oracle DB System Integrator – West Africa
    Oracle DB System Integrator required for a rolling contract in the EMEA region.

    You will be responsible for:
    Solaris jumpstart installation & IP configuration
    Accton LAN Switches – power-up & configure VLANs
    Big IP Load Balancers – power-up & configure.
    Brocade SAN Switches & 1 x StorageTek 2540 RAID Box – setup Storage & SAN.
    Solaris Data Cluster for NFS service
    Oracle RAC + DB installation & configuration.
    Oracle DG + DB installation & configuration.
    SNMP integration of HW, OS & Middleware to NMS server
    Document the final setup into “Implementation Guide” with the following details. 1. Access details to all equipments, servers & middleware (NFS, Storage Management, Oracle, etc) 2. Details on Sun Servers & Solaris, NFS service, Oracle RAC setup 3. Details on Network setup.
    For further information click here

  • Tigo and Alcatel-Lucent - Ghana
    Alcatel-Lucent and Millicom Ghana Ltd, under the brand of Tigo, one of Ghana's mobile network operators announced a strategic partnership to introduce the first permission- and preference-based mobile advertising service in Ghana. The innovative new service, Tigo Ads, is based on the Alcatel-Lucent Optism mobile marketing solution and enables Tigo’s customers to opt in to receive targeted promotions on their mobile phones. Subscribers can share information with Tigo about their preferences and receive interactive text messages containing important news, promotions, discounts and exclusive offers from their preferred brands.

    Airtel and Morvitu – Madagascar

    Movirtu, a provider of Mobile Identity Management (MIM) solutions to wireless telecommunication service providers, announced a contract with Airtel Madagascar to implement the Movirtu Cloud Phone services nationwide in Madagascar. The main channel for purchase will be the Village Phone Operators (VPOs) with whom the service has been piloted. Airtel has a stated goal to attract new subscribers from rural areas in Madagascar. 70% of rural consumers do not have access today to mobile. Cloud Phone and its associated mobile payment and information services will target those on between $1 and $2/day and in rural areas at a highly competitive price.

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