Africa Telecom People Conference and Awards: Optimism on telecoms tempered by high taxes and degrading regulatory environment
This year’s African Telecom People Conference and Awards on 12 February was held in Paris and as a result was smaller than previous years’ events. Nevertheless, it was an interesting gathering as Laurent Marx and Sylvain Béletre from Balancing-Act discovered.
Marc Rennard, VP at Orange AMEA highlighted recent Orange progress in Africa, such as major investment to deploy new fiber networks landing on the continent.
He highlighted the content issue in Africa, mentioning that infrastructure should come before content but that local content can also boost usage demand."Orange is expecting double digit growth on the continent for 3G deployment, but that will most depend on the attitudes of the regulatory, fiscal and political bodies" he added, a clear reference to its current tussle with the Kenyan regulator CCK over the cost of 3G licences.
Rennard also confirmed that Orange Money successes could also be replicated in other African countries pretty soon on the basis that only 5% of Africans have a bank account. Orange is making large progress with content, investing in a new pan-african portal named StarAfrica.com, in football rights via the CAN (Coupe d’Afrique des Nations) 2010 partnership, and in local website revamping.
A recurring theme was that African Governments were killing “the goose that laid the golden egg”. Tax increases in many countries should stop and stabilise. Real ARPU (Average Revenue Per User) is now as low as USD 3/month in some regions. Data ARPUs in South Africa are USD 2 in South Africa. Observers should not evaluate companies on ARPU, but on AMRU (Average Margin Per User). Wholesale and roaming costs of African telecoms are still much too high to break the telecoms divide.
Not all the extra costs in Africa come from Government. Outside of the conference tracks, there was talk about a lot of money being wasteddue to stealing and hidden costs: "one day you build a post or dig some fiber, the day after it has gone! then the mayor comes to you and suddenly ask for extra taxes. Same from local inhabitants, they want money because you dig in front of their houses" commented a large operator. People steal telecoms equipment and bypass traffic which indirectly increases telecoms costs for local users.
Rémy Fekete, the partner responsible for Technology Media and Telecoms at Gide, provided an in-depth review of the telecoms' regulatory status and related issues in Africa. He raised a number of examples showing that, after a virtuous trend, the continent has witnessed a degradation of its regulatory framework over last year.
The lack of an attractive legal and regulatory environment is a serious threat to the capacity of the continent to move to 3G/Mobile internet generation. Significant investments - both in high capacity transmission networks and local content - are required to make mobile internet a reality in Africa.The significant degradation of the environment does not help to build PPP (public private partnerships) operations.
Diversification, intelligent competition and entrepreneurship should be further encouraged by governments to lower telecoms prices, increase bandwidth and telecommunication access.
There is an obvious lack of support from governments in supporting the telecoms industry: Fekete made a point that most regulators are not truly independent except in a few countries. Government need to put their voice into action and give full powers to follow up with regulators decisions and endorse the law. Competition has been decreasing in several regions as a result. There is a lack of will and means to implement universal access, except for example in Tanzania and Uganda where results are promising.
Demba Diop, Director of Business Services at MTN Ivory Coast mentioned that it had also invested several million dollars in football rights and on content. Diop said that his company has signed a deal with TraceTV - a channel present in the whole Africa which broadcasts in 145 countries - available via pre-paid offer "MTN Trace Mobile" giving the ability to download music video clips among other services.
The offer, set at USD 9 and targeting urban youth includes voice, a data pack available for free over week-ends and free SMS', as well as access to Trace club, an interactive platform.MTN Cameroon launched the offer at the end of Dec 2009, and Ivory Coast is planned for February 2010. Thanks to the offer, ARPU has already increased.
Corinne Lozé CEO of Orange StarAfrica.com described the launch of the newly launched Orange information and interactive portal, still in development. The Portal provides free news related to current affairs, sport, music and education (more at www.starafrica.com). The StarAfrica.com team has 5 full time employees and 15 correspondents from various African regions aggregating content. The portal lives on two financial sources: advertising banners and premium services.
The site will enable interactive user feedback and networking, thus boosting local content and sharing of opinions. It will also expand to cover new areas in order to promote communication from individuals and companies and enable blog-type functions. Lozé added: "internet growth is very rapid in Africa right now; Africans only reprents 2.5% of global internet users but it could fast catch up with the lead pack". Lozé called on African content providers to contact her team in order to increase content flows.
Nadine Berezak-Lazarus, MD of BMP telecommunications consultants GmbH in Germany described "PPP" processes, public-private partnerships on the deployment of regional fiber networks and the set up of universal access.
Serge Thiémélé, associate of the Global telecom center at Ernst and Young Cote d'Ivoire delivered a very interesting presentation on best financial practices and hidden details regarding kpi provided by telecoms service providers.
The conference ended with the awards evening gala which confirmed the following people had received awards:
Akwasi Agyeman, Investor Relations Officer at Starcomms Plc. in Nigeria said
"It was a great event and Starcomms was excited and grateful for the award.
When you think about all the major operators within West Africa and especially Nigeria, and Starcomms wins this The Best Operator Award, it speaks volumes of what the Board of Directors, the CEO and the Employees are trying to achieve – a clear focus on executing all initiatives including excellence in customer service.
We will continue to bring innovative products to the Nigerian community."