Issue no 582 25th November 2011

The Federal Government has commended National Carrier, Globacom for its leading efforts in innovation and other milestones even as Globacom calls for government support in the provision of communication infrastructure to be shared by all players in the industry. This according to it, would help reduce the heavy cost of installation being borne by the respective players, which ultimately is transferred to the subscribers.

Speaking during a courtesy visit to the minister by Globacom officials, led by its Group Chief Operating Officer (GCOO), Mr. Mohamed Jameel and the Head of Glo 1, Mr. Folu Aderibigbe, the Minister of Communication Technology, Mrs. Omobola Johnson, described Globacom as a very important player to the GSM services industry in Nigeria. She particularly commended Globacom for being a catalyst in price reduction and for being a leader in value added services.

On the challenges facing the industry, Jameel lamented that if conscious steps are not taken to save the medium and small players in the GSM category, their fate may soon follow the trends in the CDMA category who have been sapped dry due to heavy and unbearable interconnect charges paid to the dominant player. He also drew attention to multiple taxations from local youths, local government authorities, state governments and federal government authorities, pleading with government to publish a common Code of Conduct to govern the demands of the various tiers of government.

On multiple taxation, the Minister criticized some arms of government for over-levying successful companies. She explained that contrary to existing laws governing all aspects of taxation, the level of compliance has been rather low saying that some state governments are "under pressure to shore up internally generated revenues which has made them descend so heavily on the industries they perceive as "successful", including telecommunications operators". She however informed the team that discussions are on-going to get the various arms and layers of government to comply with the laws governing the telecoms industry.

Mrs Johnson added that as Nigeria is trying to build a local ICT industry, it cannot allow the any operator in any category to die, because they address dire and specific needs of the populace. To this end, she said government is working with a team of consultants to see that interconnect fees are reduced to something fair to all players.

Telecom operators have been warned that the renewal of their operating licenses will now be dependent on the quality of the service. The frequency of surveys is also likely to increase to as often as every seven days, a senior government official said last week.

Recent technical surveys by telecoms regulator, the Uganda Communications Commission (UCC) between May and September, revealed that none of the seven mobile telephone service providers met the standard for a maximum 2% for dropped and blocked calls.

The survey established that Airtel dropped 15.2% of its calls, uganda telecom 11.4%, MTN 11.1%, Warid 8.75% and Orange 3.75%. Dropped and blocked calls are those that are unable to establish connection with the intended call recipient or those that lapse midway due to network problems.

"Now that we have about 20 million mobile phone subscribers, what we need is quality.
Before we renew a license we have to ensure that the service is excellent," Nyombi Thembo, the ICT state minister said at the opening of the Orange Telecom Expo..

African Prepaid Services Nigeria (APSN), a now-mostly-dormant company in which JSE-listed Blue Label Telecoms has an effective 37% stake, is claiming US$481m, or about R4bn at the prevailing exchange rate, in damages from Multi-Links, Telkom’s former Nigerian subsidiary, after Multi-Links walked away from a lucrative, 10-year contract with the company. Multi-Links has filed a counterclaim of $123,9m.

Though Telkom has sold the Multi-Links business — the sale to Hip Oils Topco became effective in October — part of the agreement of sale stipulates that the JSE-listed telecommunications group must accept liability for “certain litigation claims” against Multi-Links if these claims exceed $10m.

However, Telkom said this week it was “not considered probable” that the claims would exceed $10m and also that it had filed a counterclaim against APSN. Telkom had not responded to a query from TechCentral by the time of publication seeking details for its reasons for filing the counterclaim. However, it has said APSN has filed its defence to the counterclaim.

Arbitration between the parties is set down for hearing for a year from now, from 5 November to 14 December 2012. Blue Label Telecoms’ head of investor and media relations, Michael Campbell, says confidentiality agreements preclude him from providing detailed information about the dispute. What he will say is that APSN has sold most of its assets and is now little more than a shell company after it lost Multi-Links as its primary customer.

In June, Blue Label said it had decided to terminate its business activities in Nigeria on the back of the cancellation of the Multi-Links contract. This would allow it to “redeploy” its resources to its other international businesses, in particular India and Mexico, co-CEO Mark Levy said at the time.

Blue Label has an effective 36,7% stake in APSN by virtue of its 72% shareholding in Africa Prepaid Services. APSN signed a 10-year contract with Multi-Links in 2008 for the exclusive distribution of its wireless products to the Nigerian market.

Telkom has lost billions of rand through its investment in Multi-Links, which owns a CDMA) network in a market thoroughly dominated by companies that operate networks based on GSM, a rival technology.

Lusaka High Court judge Albert Wood has granted Zamtel an injunction restraining Zesco from preventing the communication company having the indefeasible right to use its optic fibre network as agreed in the agreement entered into by the two companies.

Judge Wood granted the order following an application by Zamtel for an order of an interim measure of protection for an injunction pending the resolution of the dispute through arbitration. The application was made pursuant to Section 11 of the Arbitration Act number 19 of 2000 and Rule 9 of the Arbitration (Court Proceedings) Rules 2001.

According to the order, judge Wood said, "It is hereby ordered that an order of interim measure of protection by way of an injunction be and is hereby granted to restrain the respondents whether by itself and or its servants or agents and whomsoever person or persons from preventing and interfering with and or disrupting the applicant's rights to the indefeasible right to use the respondent's fibre optic network as agreed to in terms of the indefeasible right of use agreement dated 17th December 2009 between the applicant and the respondent pending the hearing and determination of the arbitral proceedings and the applicant undertakes to indemnify the respondent for any damages that the respondent may suffer as a result of this order of an interim measure of protection by way of an injunction should the court afterwards be of the view that the order should not have been granted."

In an affidavit in support of ex-parte originating summons deposed by Zamtel managing director Hans Paulsen, by virtue of that agreement, Zesco agreed to grant Zamtel an exclusive indefeasible right of use of its fibre optic network including any future extensions or fibre networks based on the terms and conditions of the agreement.

He stated that in reciprocity, Zamtel also granted Zesco a non-exclusive indefeasible right of use for capacity of its fibre optic network including any future extensions or future fibre network based on terms and conditions of the agreement.

Paulsen said the agreement gave both Zamtel and Zesco the right to interconnect on each others fibre optic networks.
He further said as a result of the agreement and with the full knowledge of Zesco, Zamtel invested US $1,400,000,00 of the budgeted US $3 million in infrastructure and related developments of the fibre network.

Paulsen said sometimes in October this year, the Minister of Land, Energy and Water Development was reported as stating that the agreement between Zamtel and Zesco would be terminated.

He said following the purported pronouncement, on October 13, 2011, Zesco wrote a letter to Zamtel terminating the agreement on the premise that there was no notification from the electricity supply company confirming that all the three conditions of the agreement were satisfied and henceforth, the agreement had not become effective and that the three months period from December 17, 2009 had since elapsed.

Paulsen said his company believed that by the pronouncements in the press, Zesco had already formed a premeditated scheme to wrongfully terminate the agreement with no tangible and justifiable basis.

"…that the respondent's actions appear to be tainted with illegality and with ill motive in that it is calculated to deliberately disrupt the business of the applicant," Paulsen said.

"If the applicant is prevented from accessing the fibre optic network belonging to the respondent, the applicant shall be in breach of various contractual undertakings that it has with suppliers, engineers and other contractors who have been engaged on the strength of the existing agreement."

He added that both parties had been implementing the agreement unfettered since December 17, 2009.

"For instance, in August 2010, the applicant wrote to the respondent that it was planning to implement the optic grand wire across the Zambezi River at Kazungula to facilitate interconnection of the respondent's optic fibre network with the Botswana Telecommunications Corporation," stated Paulsen.

"The respondent accordingly confirmed to the applicant that it would provide it with 15 kilometers of the OPGW that needed to be used on the 66KV line at Kazungula between the respondent and the Botswana Power Corporation." The matter came up for inter parte hearing on November 21, 2011.

The Nigerian Communications Satellite Limited said the Nigerian Communications Satellite-1Replacement (NigComSat-1R) would be launched on Dec. 19. The managing director of NigComSat-IR, Timasaniyu Ahmed-Rufai stated this at the stakeholders' conference and exhibition on NigComSat-1R, entitled "Pre-launch Marketing and Sensitisation on NigComSat-1R." He said that the new satellite would be sent into the orbit from China.

The managing director noted that 18 months after the launch of NigComSat-1 on May 13, 2007, the satellite was de-orbited on November 10, 2008.

'We spent five months to analyse what happened to NigComSat-1 before commencing on the manufacturing of NigComSat-1R,' he said. He said the new satellite was a super hybrid geostationary satellite for communications and would also serve in telemedicine, e-learning, aircraft, aside others.

'The launch of NigComSat-1R is symbolic on different levels. For us at NigComSat Limited, it is the end result of many years of hard work and sacrifice. It is another step towards the fulfillment of our vision to be the leading satellite operator in Africa.

'For the federal government of Nigeria, it is a prerequisite for a knowledge based economy, and to the ICT industry, NigComSat-1R will serve as a critical infrastructure,' he said.

Ahmed-Rufai called for the cooperation of the government and the ICT industry to enable the average Nigeria to reap the benefits of the launch. According to him, whilst the de-orbiting of NigComSat-1 was disappointing, it paved the way for growth and improvement.

'The improved features will enable us meet our core mandate in covering the entire African continent and parts of Europe and Asia with clear, clean and high-resolution signals on our footprints.

'The NigComSat-1R satellite, therefore, will bring the expected bandwidth, not just to Nigeria, but the entire continent. We shall ensure the bandwidth is available for customers at competitive prices,' he said.

He called on the broadcast industry to take advantage of the opportunity to meet what he called the challenges of global migration in the industry. The NigComSat-1R has a life span of 15 years.

The Minister of Communications Technology, Mrs. Omobola Johnson, said the new satellite would add value and improve the fast growing ICT landscape in Nigeria, especially in the area of broadband Internet connectivity.

'Recently, the International Telecommunication Union (ITU) rose up from its yearly meeting in Geneva, Switzerland, with a marching order to its member countries to make broadband connectivity available in at least 40 per cent of households by 2012.

'Nigeria as a member of ITU will abide by ITU decision by creating an enabling environment for broadband Internet connectivity through adequate investment by both the government and the private sector,' Johnson said.

She added that NigComSat-1R would domesticate broadband services by curtailing capital flight of about 500 million dollars yearly.

In a matter of days it will be possible to send or receive money in Uganda across international borders at the push of a button on your cell phone. Subsequent to the $110m (sh282b) Visa Inc acquisition of Fundamo, a global mobile money firm, Africans especially those in Uganda and Nigeria will enjoy international mobile money transfers through a partnership with telecom company MTN.

The development is poised to increase amounts of money remitted to the country after media reports indicated that remittances from the diaspora increased to about $2 b (sh5trillion) from about $845 m (sh2trillion) between 2006 and 2010.

Central Bank reports indicate that remittances from workers in African countries like Angola, Namibia and South Africa are rapidly growing to match remittances from workers in overseas countries such as the UK and United States of America (USA) back home to Uganda.

At the end of 2010, the Money Remittance Fund had grown to sh1.9b in efforts to provide security to persons who deposit money with money remittance firms.

Jim McCarthy, head of product for Visa Inc says the company's VisaNet product will make reliable electronic payments a reality as well as increase access to formal financial services in the developing countries.

"Mobile technology has become the single most important driver of financial inclusion that is enabling financial institutions, mobile network operators and Visa to connect unbanked consumers to each other and the global economy," he noted.

Apparently, the new technology has the capacity to handle more than 20,000 transaction messages every second across more than 200 countries. This being the launch of the service, the jury is still out on the security of the transactions.

However, Visa and MTN give assurances that authentication through a PIN or password in addition to fraud monitoring capabilities will mitigate and prevent fraud.

Uganda and Nigeria are set to be the first beneficiaries of the service in Africa, according to press statements, as MTN rolls out the service to its 5.7m mobile money users on the continent.

"As the appetite for mobile technology grows, the launch of this product with Visa doesn't only enhance our current mobile money offering, but also represents yet another crucial milestone in our journey to bring value-adding services to the growing population of mobile phone users in our markets," said Christian de Faria, MTN Group boss.

Bank of Uganda regulates and oversees the mobile money operations of telecom companies Airtel, MTN Uganda, and Uganda Telecom (UTL) in the country.

Blue Label Telecoms shareholders on Tuesday approved a plan by the JSE-listed company to buy the 12% of the company’s shares held by US software maker Microsoft in a deal worth R390m.

Microsoft is selling the shares at a loss. It bought 91.9m shares in 2007 for R6,75/share and is selling them back to Blue Label, which intends to cancel them, for R4,25/share. Blue Label’s head of investor and media relations, Michael Campbell, says the two companies have “no further plans to work together”.

“Our strategies dovetailed well in 2007, reflected in [Microsoft's] investments in us and bilateral agreements, but circumstances have since changed,” Campbell says. “During the last four years as a listed business, our relationship has not continued to develop in the way that either party envisioned and there are no common denominators apparent to either of us going forward.”

Campbell says the parties have agreed not to disclose what percentage of shareholders voted in favour of the buy-back, but it had to be improved by a 75% majority.

Microsoft originally bought the shares when Blue Label listed on the JSE. It acquired the stake and entered into a partnership with the SA company to “exercise reasonable efforts to provide mutual assistance to one another in exploring new business opportunities”. 

Christine Ampeire, a second-year student of Software Engineering at Makerere University, was beaming with delight after her mobile app, Mafuta GO was announced winner of the AppCircus competition at Protea Hotel in Kampala.

The decision was reached by a panel of 6 members of the jury, composed of Veronica Ssempebwa, Evelyn Namara, Annie Njenga, Ali Ndiwalana Gerald Begumisa and Boaz Shani, after each of the ten shortlisted developers had presented their creations to the over 200 delegates at the Mobile Monday Kampala event.