GTV Wounds Up

Gateway Broadcast Services, the fledgling satcaster that threatened to challenge the dominance of Multichoice in the African market, has closed its operations blaming economic conditions.

In perhaps the starkest reminder that the global economic meltdown is no phantom, GTV revealed it had invested $200m (about sh390b) in the business, but blamed “the current financial and global crisis that has caused excessive demands on the business,” for its demise. 

“Increased instability in global markets interrupted our ability to secure funding and left us no choice but to cease operations,” said a company spokesman. 

“We have tried every possible step but we are all unfortunate victims of the global economic crisis.” 

Stunned subscribers received only a short message telling them the channel had gone off the air. 

The defunct company supplied programmes to countries from Kenya to Botswana. 

Fans who had hitherto watched the English Premier League on the station will have to find another source of information this weekend, and in the future. 

But it won’t be only the subscribers counting the cost. 

Several African football federations and leagues will suffer the domino effect. 

GTV backed several domestic leagues, including Uganda, Ghana and Tanzania. The pay TV had undertaken to back the local Ugandan league to the tune of $500,000 (about 985m) a year for the coming five years. 

GTV had also just recently penned a $4m four-year sponsorship deal for the regional CECAFA Cup. 

According to the statement, the company had fruitlessly explored multiple ways of mobilising finance but that all had ended in frustration and failure.

“In determining to approve the company's plan of liquidation, the board and management carefully reviewed the advice its consultants,” the statement said, adding that, “The economic crisis that has emerged globally over the last few months has caused excessive demands on the business.”

The Africa-wide GTV service has an estimated 100,000 subscribers across Africa and has over the last two years invested a total of $200 million. Although the company didn’t indicate what it would do with its assets, newswire reports said GTV had in fact sold to Canal Plus, a subsidiary of the French media behemoth, Vivendi for $23.6 million.

According to a Bloomberg report, GTV needed 400,000 subscribers to breakeven, which is far too above its current number of customers. GTV has fought a fierce turf battle with DSTV across sub Saharan Africa but the latter has lately appeared to prevail, boasting of a subscriber based of three million. 

An official however, said that the deal with Canal Plus failed to materialise.

“That was the last straw. Canal Plus withdrew from the deal last week and that is what broke us down,” he said, adding, “I feel very said about it. I feel like somebody has died.”

He also said he does not know if there would be continuity with the programmes through an alternative service provider. GTV had 80 per cent broadcast rights of the English Premier League. South African-based Multichoice DsTV broadcasts 20 per cent of the English Premier League. It’s local franchise was non committal when contacted for comment.

Etisalat Profits Soar by 19%

Middle East and Africa operator Etisalat said that its annual net profit surged 19 percent to AED 8.7 billion, from AED 7.3 billion in 2007. The group recorded a net profit of AED 2.1 billion during the fourth quarter, before year-end adjustments, reflecting an increase of 18 percent.

Net revenues for 2008 rose 22 percent to AED 26.1 billion, while fourth-quarter sales stood at AED 7.1 billion, up 18 percent year-on-year.

The company's recent acquisition of licences in Iran and India is expected to drive growth in the years ahead. In its home market the UAE, the number of Etisalat mobile subscribers grew 14 percent compared to 2007 to reach 7.3 million, fixed-line subscribers grew 3 percent to 1.36 million and internet subscribers grew 31 percent to 1.15 million. 

Kenya: Orange Puts Money Transfer Service on Hold as Zain Clashes With central bank

Telkom Kenya and mobile phone service provider Orange are putting on hold plans to introduce a money transfer service, Kenya's Daily Nation reports.

This may have been occasioned by the stand off between the Central Bank of Kenya (CBK) and a commercial bank involved in the Zain Kenya money banking service which is sending out confusing signals to the market.

Zain Kenya had initially hoped to launch its money transfer service known as zap this month but is yet to get prerequisite approval. 

Zain and Standard Chartered Bank were due to meet the CBK yesterday with the hope of striking a deal.

Orange is the mobile brand of Telkom Kenya.

Orange head of marketing and strategy Jean-Michel Chanut said they were exercising caution with the plan. 

“We will certainly comply with the market trends of providing money transfer services but currently, that direction is confusing,” said Mr Chanut. 

“We all know what is going on at the moment with another player’s proposals for the same,” he added.

“We are exercising caution at the moment, we know our subscribers would want us to bring the service but not just now,” he said.

He spoke on Thursday during the launch of ring back tone service on Orange mobile that allows callers to the network to listen to downloaded music instead of the regular ringing tones. 

Telkom Kenya just before its commercial launch last September had indicated that introduction of a money transfer service was one of the directions it would take for value addition to subscribers. 

According to information it gave out then, the firm was to launch this by the end of this month.

Zain Kenya has been having a war of words with the Central Bank of Kenya over a delay in approving a similar service that they intend to launch, not only in Kenya, but in the East Africa region as well. "We will certainly comply with the market trends of providing money transfer services, but currently that direction is confusing," said Chanut

Zain together with Standard Chartered Bank was supposed to meet the CBK on 28 January hoping to reach a deal on its licence. Safaricom's M-Pesa money transfer service, which was launched in March 2007 and has dominated the market, caused an uproar from players in the banking sector, as it specifically targeted people who had no access to formal financial services.

The bankers and even some government officials have called for the regulation of M-Pesa and other subsequent services. Chanut also revealed that the company is nearing 500,000 active subscribers on the Orange mobile network.

The company's GSM network is already in 21 major towns across the country, barely four months after the launch, and plans are underway to expand into more areas using the Orange Fixed Plus and Telkom Fixed services. 

Zain Plans to Partner With PalTel

Kuwait's Mobile Telecommunications Co (Zain) says it is in advanced talks to become a strategic partner in Palestinian operator Palestine Telecommunication Company (PalTel), reports Reuters. PalTel operates in the West Bank and Gaza Strip. "We are in advanced talks and could conclude a deal soon," said a Zain spokesman, declining to say if Zain wanted to buy a majority stake as it usually does when entering new markets.

Kuwait's biggest mobile operator, which is spending billions to expand and now operates in 22 countries in the Middle East and Africa, gave no more details in a statement.

The Palestinian Securities Exchange said in a statement it had suspended trading on Paltel at Paltel's request until the merger was completed. A second Palestinian mobile network, Wataniya, is expected to come into operation this year. Wataniya is owned by Qatar Telecommunications Co and the Palestinian Authority's Palestinian Investment Fund.

New Regime May Review Ghana Telecom Sale to Vodafone

The Minister designate for Communications in the new Ghanaian government, Hon. Haruna Iddrisu has hinted that his ministry would review the sale of Ghana Telecom to Vodafone International.

He said though he would have to contact the Presidency for approval before his Ministry would embark on such a move, he was hopeful that the government would support the idea.

Speaking in an interview with The Chronicle in Accra yesterday, Mr. Iddrisu said the review was not meant to revoke the Sale and Purchase agreement that Vodafone International signed with the government of Ghana, but to ascertain whether the contract was a genuine one.

"My brother, I am not saying that we are going to take the deal from them but we are going to make sure that Ghanaians get value for their money," he reiterated. He was emphatic that government was going to evaluate and review most of such transactions that were executed by the former government.

The National Democratic Congress (NDC), while they were in opposition did not approve the $900 million Vodafone deal in Parliament, on the grounds that though they were not against the sale, the “secrecy” under which government was going about the process raises suspicions, and that some procedures did not conform to the Public Procurement Act.

The NDC questioned the basis upon which government decided to choose Vodafone Plc UK, as the sole investor to acquire majority shares in GT, while they were not part of the companies which showed interest in the deal. The Minority questioned the basis by which government exclusively negotiated with only Vodafone PIc UK, without considering other bidders who were likely to offer higher bids than Vodafone, and address the socio-economic needs of the country.

Prof. John Evans Atta Mills, the then flag-bearer of the NDC, who also joined the agitators who called for a transparent and better deal to dispose of GT to foreign interest, was or the view that the then government created a false impression about the opposition’s protest against the sale of GT.

The Minister designate for Communications, who was at the fore front for the demand of transparency in the sale of GT, told the paper that among his priorities as a Minister would be the setting up of a National Information Technology Council, to serve as an advisory body for the Ministry of Communications on Information Technology (IT).

He, said it was his plan to all citizens of Ghana, including the rural folks beneficiaries of IT.

Mr. Iddrisu indicated that there would be a lot of experts in the area of information technology, who would assist the Council to impact their knowledge for the growth of IT.

Touching on some of the reforms he intends to bring to the telecommunication industry; he gave the assurance that monies paid by Ghanaians would be worth the services rendered by the communications industry.

Etisalat Misr Exceeds Subscriber Number Target

Egypt's mobile service provider Etisalat Misr surpassed its subscriber target for 2008, with the operator reaching 7 million customers by the end of the year.

 According to Middle East online news portal MEED, the telecommunications operator had set a target of 6.8 million sign-ups by end-2008, and its end of year total represented a 126 percent rise against the same time a year earlier.

Etisalat Misr CEO Saleh Abdooli said that the company is now aiming to reach 10 million subscribers by the end of 2009, and has claimed that the company is on track to generate its first net profit in 2010.

Bintel to Expand Africa Operations

Middle East and Africa telecom service provider Bintel has announced major investment plans as part of its strategic expansion programme. The Bahrain-based company plans to enter at least three new markets in Africa in the next two years and has allocated USD 250 million for investment in the region.

In early 2008, Bintel acquired a majority stake in Telesonique, a Swiss-based wholesale traffic company, as part of its strategy to build a reliable network of telecommunications services strategic partners. Established in 2007, Bintel has Middle East offices in Bahrain, Dubai and Lebanon and operates GSM networks in Central African Republic (since mid-2007) and Somaliland (since mid-2008).

Vodacom Reports Growth in Subscribers, Revenues

Mobile phone operator Ton Tuesday reported that increased subscriber numbers, largely from non-South African operations, boosted the group’s revenues to R40,5-billion in the nine months ended December 2008.

This was a 13,7% increase in revenue when compared with the prior year.

An overall 14,3% lift in customers took Vodacom’s subscriber numbers to 37,8-million. Some 30%, or 11,3-million, of these subscribers where outside of South Africa, as the company continued its aggressive drive to grow subscriber numbers further into Africa.

"Expanding our African footprint beyond South Africa is one of the pillars of Vodacom’s growth strategy. I’m pleased to say that this quarter we reached an important milestone, with 30% of our total customer base now coming from our operations in Tanzania, the Democratic Republic of Congo, Lesotho and Mozambique,” said Vodacom group CEO Pieter Uys.

Mobile customers from Vodacom’s non-South African operations increased by 8,4% to 11,3-million at December 2008, from 10,4-million at September 2008.

Nigeria's GiCell to Enter Mobile Market

Nigeria’s GiCell Wireless is to begin providing a mobile network, with what it dubbed the cheapest tariffs in Nigeria.  Speaking to the Daily Trust Chief Executive Officer Usman Abubakar Gumi said his company will be rolling out a CDMA 450 network to provide voice and data services, initially serving five states.

“We intend to launch in the second week of February, and our strategic advantage will be to provide the lowest tariff to our subscribers as well as superior voice quality and wide Coverage”, he told the daily.

The project is supported by the World Bank.  GiCell was selected as the first Universal Access Service provider in Nigeria to provide telecommunications service to un-served and under-serve areas. The World Bank’s support of US$ 5 million is backed by funding from other banks and local investors.

Nigeria continues to be one of the fastest growing markets in Africa with triple-digit growth rates every single year. It passed Egypt and Morocco in 2004, and South Africa in 2008 to become the continent's largest mobile market.

Subscribers have grown from almost nothing in 2001 to exceed 53 million as at June 2008 and expected to cross 77 million by 2013 with a penetration rate of 28% and revenue of more than $10 billion per annum.

The Top-10 Fastest Growing Mobile Operators in Mid-East/Africa

The ten fastest growing operators in the MEA region added over 12m new customers in aggregate over the last three months, implying an average gain of over 1.25m. In fact, all but three of the ten managed seven figure gains.

Mobinil in Egypt produced by far the best result in the region, with 2.58m net adds - more than it connected in the first two quarters of the year and nearly one million more than second placed MTN Nigeria managed. The Egyptian market has been booming since the launch of the country’s third network, but as is so often the way, the incumbents have been the main beneficiaries. Vodafone Egypt was the fourth fastest growing company in the quarter, with 1.39m new customers, while Etisalat Egypt, the new entrant, only managed a gain of 310k, for 28th place overall.

An increased competitive threat also lay behind the strong performance by third placed Irancell and fifth placed TCI Iran. These two added 1.55m and 1.15m connections respectively, but this week, a third national mobile licence has been awarded to a consortium led coincidentally (or perhaps not) by Etisalat. This will have exclusive rights to offer 3G services, at least for the moment. Experience shows that agreements of this kind are rarely honoured if there is a licence fee to be had.

Kenyan companies take sixth and tenth. Safaricom, the Vodafone associate, added 1.12m new connections in the quarter to strengthen its lead over Zain Kenya. Zain remains the main threat in Kenya, but its 0.65m net adds in Q3 do not fully offset the loss of 0.98m seen in Q4 07 and Q1 08 and the company’s base is still down, year on year.

AsiaCell of Iraq and ScanCom Ghana (MTN) complete the top ten, with 0.76m and 0.72m respectively. A further 22 separate businesses added more than 0.25m new customers during the quarter, these representing some 19 different markets.

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Telkom SA takes Full Control of Multi-Links

South Africa's biggest fixed line operator Telkom has taken full control of Nigerian phone network Multi-Links buy acquiring the remaining 25% stake that it did not own. Telkom paid $130m to complete its ownership.

Telkom acquired the initial 75% in May 2007 at $280m. The increase in the proportionate purchase price is attributed largely to increased subscriber base over the twelve months to September 2008.
There has also been an increase in network capacity. The subscriber base swelled from 262,000 in September 2007 to over 1.7 million a year later.

The purchase price was arrived at after an independent expert was hired to asses the value.

Multi-Links operates a fixed wireless network on the CDMA platform in Nigerian cities, with a license it acquired in 2006 to offer voice, Internet and data services.

The acquisition is in line with Telkom's plans of expanding into the African market, a move that it hopes will improve upon its stagnated revenue base.

Maredi in Court Over Telkom Deal

South Africa's Maredi Telecommunications and Broadcasting has blocked Telkom from awarding a multimillion-rand tender to Ericsson South Africa and Telsaf Data by filing an urgent court application in the Pretoria High.

South Africa’s Business Times reports that the row has called into question Telkom CEO Reuben September's close business relationship with Ericsson's senior management. Parties crying foul over the tender include the Communication Workers' Union (CWU), which has since called for a probe into alleged corruption. The union said it had evidence that senior directors at Telkom altered documents to influence the tender. Telkom has denied allegations of any wrongdoing.

In court papers, Maredi Telecom and Broadcasting CEO Takashi Utsunomiya claims Telkom violated the Promotion of Administrative Justice Act, which deals with fair awarding of contracts by entities with a significant government shareholding. Utsunomiya said Telkom violated the Act because it acted capriciously and in bad faith and did not follow fair procedures. He said Ericsson did not comply with critical criteria as it twice failed physical tests in the tendering process performed in conjunction with a Telkom team led by technical manager Giel Laubscher.

But it is understood that Marius Mostert, Telkom's group executive for network infrastructure provisioning, overruled Laubscher's critical report about the equipment and said Ericsson should get another chance because its equipment had been damaged while in transit from Sweden. Utsunomiya said his company offered Telkom a technology that meets local and international standards, at "very competitive commercial terms and within a model that advances black economic empowerment".

The tender for a point-to-point microwave system was awarded to Telsaf Data and Ericsson in a 60:40 split. The microwave serves as the back-haul system for mobile base stations and Telkom's broadband wireless access network. Telkom confirmed to Business Times that it had received a court application to review and set aside an award for the tender. Since the matter is sub judice, Telkom cannot divulge any further information, said Telkom spokesman Pynee Chetty.

Tata Takes Control Of Neotel

India's Tata Communications has bought the 30 percent stake in South African fixed-line operator Neotel previously held by local investors Eskom and Transnet. This makes Tata the controlling shareholder in Neotel. Tata Communications CEO N Srinath said the acquisition reaffirms Tata Communications commitment to its expansion and investment plans in the emerging regions of Asia, Africa and the Middle East. Neotel CEO Ajay Pandey said it is very encouraging that a global telecommunications giant continues to invest in South Africa and Neotel in particular with the current economic climate in South Africa. No financial details of the takeover were released. 

Orascom Buys Namibia's Cell One

Telecel Globe, a subsidiary of Orascom Telecom, has acquired the Namibian mobile network operator Cell One for USD 59 million in cash, of which USD 32 million was already paid and the balance is due in January 2010.

Cell One operates a GSM 900/1800 network and has 198,000 active subscribers and over 20 percent market share. The acquisition will further enable Cell One to grow its customer base and deliver new services. Namibia had a mobile penetration of close to 50 percent at the end of 2008. 

These acquisitions are part of Telecel Globe's strategy to target licences and mobile operators in small and medium-sized developing countries that have high growth potential.

Orascom, Zain Win Lebanon Bids

Orascom Telecom and Zain have won the contracts to operate Lebanon's two mobile networks. Contracts to operate the MTC Touch and Alfa mobile networks had expired last month. Orascom said the new contract will run for one year, with an option for another year. The company has agreed to increase Alfa's subscriber base from around 600,000 currently to 1 million by the end of 2009.

Zain also confirmed it will manage the MTC Touch network for another year, from 1 February, and target another 400,000 customers on top of the existing 800,000. The Lebanese government has agreed to finance the capital expenditure for expanding the networks and will pay the two operators management fees based on operating costs per subscriber.

Lebanon has some 1.1 million mobile phone users out of a population of 4 million. The new operators are expected to increase the network coverage and bring prices down. The new contracts are a stop-gap measure until long-delayed privatization of the mobile firms takes place. The privatisation has been put on hold because of global market conditions.

MTN, Neotel Plan to Build Fibre-Optic Network

South African operators MTN and Neotel have signed a joint agreement to co-build a national long-distance fibre-optic network. The network will cover a distance of 5,000 km, connecting the major centres across South Africa.

The first route of the national fibre network will extend from Gauteng to KwaZulu-Natal, incorporating Pietermaritzburg and Durban. Construction of the first leg is expected to commence in the first week of March 2009 with a completion date scheduled before the Fifa World Cup 2010.

The network will provide both MTN and Neotel with bandwidth capacity to carry more voice and data traffic at higher speeds over greater distances using less power than copper cables. MTN said that its initial network will have a capacity in the Tbps range. The initial route will assist MTN and Neotel to link up with the undersea cables such as Eassy and Seacom currently under construction along the eastern coast of Africa. 

Maroc Telecom Annual Revenue up by 7.2%

Maroc Telecom posted a 7.2 percent rise in annual sales to MAD 29.5 billion, driven mainly by its mobile operations. In the fourth quarter, revenues rose a slower 3.9 percent to MAD 7.5 billion. The Moroccan operator expects to report growth in operating profit of over 13 percent for 2008. In its home market Morocco, revenues rose 6.6 percent last year to MAD 27.7 billion. For the fourth quarter, mobile revenues in Morocco improved 4.3 percent to MAD 4.7 billion and fixed-line sales rose 6.4 percent to MAD 2.5 billion. The company finished the year with 14.456 million mobile customers in its home market, up 8.5 percent from 2007, while mobile ARPU fell 8.4 percent to MAD 99.2. The number of fixed-line customers was down 2.8 percent to 1.299 million, while the fixed internet base grew 1.3 percent to 400,000. Marco Telecom also had 30,000 mobile broadband users and 10,000 IPTV customers.

Orascom mulls ISP Business

Egypt's Orascom Telecom is considering merging its ISP LinkDotNet and mobile provider Mobinil. Arab Finance reported that broadband operator LinkdotNet is considering selling a majority stake to Mobinil, or alternatively merging with other companies operating in the internet sector. Alex Shalaby, Mobinil's chairman, noted that negotiations between the two operators had not reached a conclusion, and stressed that the mobile company was considering other acquisition possibilities. Mobinil's rivals Vodafone and Etisalat already own ISPs and work on integrated fixed and mobile services.  

IFC to Buy into Burkina's Onatel

The International Finance Corporation (IFC) is to purchase up to 5% of Burkina Faso's telecom operator Onatel in an effort to support an ongoing IPO. IFC,  the World Bank’s private sector lender, in a statement said it would take on a stake of up to 5% by buying any unsubscribed shares.  The IPO begun on 22 December 2008 and closes on 31 January 2009.

Onatel intends not to displace any private investors.  Should all shares be subscribed to, according to IFC, the government will sell it a 3% stake.

Currently, Maroc Telecom has 51% shares in Onatel, which stake it acquired in 2006 when the government embarked on privatization of the network.  In the IPO, Burkina Faso's first ever, the government is offering a further 20% stake

IFC is also working closely with the Burkinabé government to improve the legal and regulatory environment and make it easier for entrepreneurs and private businesses to operate and contribute to economic development, according to the statement. In fiscal 2007, IFC invested $8.5 million in the country. On a broader scale, IFC is increasing its investments in Africa, particularly in the poorest countries and regions where the private sector has played a limited role in economic development thus far, the statement adds.

Vodacom Acquires Gateway Telecommunications

South African mobile phone operator Vodacom has announced the completion of the acquisition of the carrier services and business network solutions subsidiaries of Gateway Telecommunications SA (Pty) Ltd. The transaction has received approval from the relevant regulatory authorities in South Africa and Tanzania and from the South African Reserve Bank.

Gateway is Africa's largest independent provider of interconnection services via satellite and terrestrial network infrastructure for both African and intercontinental telecommunications companies. Gateway also provides an extensive range of high quality, end-to-end connectivity solutions to multinational corporations operating across Africa.

Commenting on the conclusion of the acquisition, Vodacom Group CEO Pieter Uys said:

"Vodacom has sustained double digit growth for more than a decade. As mobile phone penetration levels increase in South Africa, we are actively repositioning Vodacom as a total communications provider with new avenues for growth. The Gateway acquisition is a key part of this strategy and I'm pleased to announce that the transaction has now been concluded."

Discussing the future, Gateway CEO Peter Gbedemah said:

"Vodacom and Gateway are a formidable combination. Gateway has a physical presence in 13 countries and provides services across 40 African countries. We have a unique pan-African service provider model and to this Vodacom brings additional resources, efficiencies and a wider product range.

Zain Forecasts 30% Profit Growth This Year

Leading Africa and Middle East mobile operator Zain expects net profit to rise by at least  than 30 percent in 2009. The firm's CEO Saad al-Barrak told al-Watan newspaper that EBITDA would rise by around 40 percent this year. Reuters reported that a spokesman for Zain, which operates in 22 countries in the Middle East and Africa, confirmed the comments. In October, Zain, which operates in 22 countries in the Middle East and Africa, said it expected 2009 net profit to rise to around KWD 413 million, or by about 30 percent, buoyed by its overseas expansion strategy. Zain's financial situation is very healthy despite the global financial crisis, Barrak was quoted in the newspaper, adding the firm had paid back obligations worth USD 1.8 billion in December. This represents about 25-30 percent of the company's total debt, he told the paper. Zain sees its customer base rising to more than 94 million at the end of 2009, up from 64 million last year. For 2009, Zain would have a cash flow of USD 5 billion, Barrak said, without giving a comparison for last year.