Thursday, December 23, 2010

Airtel To Increase Its Zambian Stake to 97%

India’s Bharti Airtel is expected to increase its stake in its Zambian listed subsidiary from 79% to 97% following the conclusion of a mandatory offer to buy out minority shareholders, launched in November.

Bharti first acquired a stake in Airtel Zambia when it purchased the assets of Kuwait’s Zain earlier this year. Under local rules, companies are usually delisted if a single shareholder owns more than a 95% stak

Libya to List State Cellcos By April 2011

According to Reuters Africa, state-owned Libyan mobile phone operators Al Madar Telecomm and Libyana will definitely be floated on the North African country's stock exchange by the end of April 2011.

Gamal Al-Lamushe, the chairman of Libya's privatisation and investment board, told the news agency: 'We are working on it with Al Madar and Libyana. Probably about 2% to 5% - that is the maximum that will be floated'.
In October, chairman of the Bourse, Suleiman Shehoumi indicated that the two companies would each list 30% stakes on the local stock exchange in early 2011, but Al-Lamushe has contradicted Shehoumi's assessment, stating: 'I don't think that much will be floated. The capacity of the Libyan stock market is very limited. It will not be a good idea to float such a big amount of capital'.
Shehoumi said that the two cellcos would be among as many as 20 local firms expected to list themselves on the exchange in 2011. The move suggests further progress in the gradual opening up of Libya’s economy; long-standing international trade sanctions were lifted by the US in 2004, after Libya publicly turned its back on weapons of mass destruction.
Reports concerning the privatisation of Libya's telecoms sector have circulated regularly since 2007, adding an element of doubt to predictions that the flotation will go ahead as planned in 2011.

FT Continues With Plans To Purchase Korek

France Telecom (FT) is proceeding with the purchase of a stake in Iraqi cellco Korek Telecom, after it was chosen as a preferred bidder over South Africa’s MTN, according to a report by Middle East business intelligence service MEED.

The GSM operator, based in the autonomous Iraqi Kurdistan region, won a nationwide licence in 2007 and has proceeded to branch out from its northern homeland to cover central and southern regions of Iraq. Korek is Iraq’s third largest cellco by subscribers.

The MEED report adds that Korek, with a customer base approaching three million in a market with room for growth, is an attractive asset for the French group, which recently expanded in the Middle East and North African (MENA) region by purchasing a 40% stake in Morocco’s Meditel.

FT is looking to increase its territorial presence further via more acquisitions, with the overall aims of doubling its revenues and reaching 300 million subscribers worldwide. The deal, which is yet to be finalised, would also assist Korek’s further expansion plans with the investment of a global player, whilst also representing a cheaper option for FT than bidding for a new licence in Iraq and building a network from scratch.

Meanwhile, FT has recently established research and development labs in Amman and Cairo to create services and products specific to the Middle East market.

Providing a cautionary note, UAE-based Etisalat previously failed to negotiate a stake purchase in Korek, saying that the Iraqi firm demanded ‘too much for too little’ in talks with the Abu Dhabi operator more than two years ago.
Millicom International Cellular (MIC) has announced that its subsidiary in the Democratic Republic of the Congo, Oasis (Tigo DRC), has agreed to sell 729 towers to Helios Towers DRC, a direct subsidiary of Helios Towers Africa.

As a result of the transaction, Tigo DRC will receive at least USD45 million of cash up front and will retain a significant minority interest in HTD. Additionally, Tigo DRC and HTD have entered into a long term leasing agreement whereby HTD will provide Tigo DRC with access to wireless communications towers and a build-to-suit agreement to support the company's wireless networks.

HTD will seek similar agreements with other operators in DRC. The transaction is expected to create savings in both capital and operating expenditure for Tigo DRC. The specific number of towers and final purchase price will be determined at closing. First closing of the transaction, subject to customary closing conditions, is expected to take place around Q3 2011.

Mikael Grahne, President and CEO of Millicom, said: ‘This agreement with HTD in DRC is Millicom’s third such deal with Helios in Africa and it brings us to a point where nearly two-thirds of our towers in Africa are committed to be outsourced.
'We view the DRC as a very attractive market for asset sharing considering its size, lower average purchasing power and logistical complexities. We are confident that this and similar previously announced ventures will continue to produce satisfactory results and improved service levels as we have experienced in Ghana since the creation of the first tower joint venture in Africa with Helios in January 2010. These agreements, and any future sale of our remaining towers in Africa, will enable us to improve both our capital and operating efficiency by focusing on our core activities of sales, marketing, branding, distribution, service innovation and customer care.’

TZ Govt Owes TTCL $501,000

The government of Tanzania reportedly owes state-backed national PTO Tanzania Telecommunications Company Limited (TTCL) more than TZS7.2 billion (USD501,000) in unpaid communication services bills, making it hard for the telco to improve its financial position and roll out services to underserved areas.

The telco’s chief executive officer, Mr Said Said, is quoted as saying that his company needs TZS322 billion (USD230 million) to invest in the equipment necessary for the planned expansion, and to compete with rivals in the domestic market. Mr Said told the country’s minister for communication Prof Makame Mbarawa that payment of its bill would allow TTCL ‘to improve and extend our services and coverage in the country.’ The minister has promised to ‘work’ on the matter.

TTCL has been struggling with its finances for several years. Indeed, in October 2009 the nation’s Parliamentary Committee on Infrastructure requested that the government bail out its ailing national fixed line PTO, arguing the company could be close to collapse.

Angola: Movicel Enters Benguela Province

Angolan CDMA-based mobile operator Movicel has launched pilot GSM services in its second area, Benguela Province, following its initial launch of a GSM system in the capital Luanda at the end of November.

Benguela-based customers with compatible devices can now use a GSM SIM card in place of the CDMA equivalent. The company has promised a new range of products and services for GSM users, whilst it is introducing free calls between users of the new network, in which it has so far reportedly invested USD100 million

Tuesday, December 21, 2010

Airtel Rebrands Warid In Bangladesh

Indian giant Bharti Airtel has announced the launch of its Airtel brand in Bangladesh to replace the Warid Bangladesh name that its operations in the country currently operate under.

Bharti bought a 70% stake in the Bangladeshi cellco in January 2010 for USD300 million from UAE-based Abu Dhabi Group. Chris Tobit, CEO of Airtel Bangladesh, said the company would strive to improve services, whilst it would also ‘value the country's identity, culture and language ... while retaining the youthfulness and dynamism of the global brand so that our customers here can enjoy the same best-in-class brand experience as across continents.’

He added: ‘We have already begun to bring alive our promise of taking our mobile network deeper and delivering world-class and affordable mobile services ... Airtel customers will get to enjoy price advantage over competitive offers, which are brought on by Airtel's unique business model.’

Airtel Bangladesh customers will now be able to experience new multimedia content with the launch of ‘Airtel live’, a WAP portal offering games, video, pictures and various other value added services. With approximately four million customers, Airtel Bangladesh is the country's fourth largest operator after Telenor-backed GrameenPhone, Orascom-owned Banglalink and Robi (owned by Malaysia’s Axiata).

Algeria Plans to Acquire Djezzy

The Algerian government is poised to make an offer to buy Orascom Telecom's Djezzy mobile phone unit by the middle of next year, Reuters reports, citing an unnamed Telecommunications Ministry source.

The hotly contested unit has been the source of much speculation in recent years, and came to the fore once again following October’s agreement between Russia's Vimpelcom and Egyptian entrepreneur Naguib Sawiris under which Vimpelcom would take a majority stake in most of Orascom Telecom's units, originally slated to include its most valuable asset Djezzy.

Provisional negotiations between Vimpelcom and Algiers over the potential privatisation of Djezzy stalled, and the Algerian government forced Orascom’s hand by hitting the telecoms firm with substantial back taxes.

Last week Algiers demanded a figure of around USD230 million for the tax years ending 2008 and 2009; Orascom has called the reassessment ‘completely unfounded’. In November Algeria's Finance Ministry shortlisted ten firms to provide it with a valuation of Djezzy, with the results anticipated to be available before end-2010. The Algerian telecoms official, speaking on condition of anonymity, told Reuters: ‘I think Algeria will make an offer to Djezzy by the end of June 2011’.
Although Vimpelcom has expressed its desire to acquire Djezzy throughout, its plan suffered a major setback yesterday when Norwegian shareholder Telenor confirmed that it is not willing to back the acquisition.
Telenor, which holds a 36% voting stake in Vimpelcom, is generally perceived as taking a more cautious approach towards international expansion than its co-shareholder, Alfa Group, and its reluctance to push through the Djezzy deal has been rumoured for some time.
Telenor spokesman Dag Melgaard commented: ‘In our capacity as a shareholder of Vimpelcom Ltd., we do not believe this transaction makes strategic or financial sense for Vimpelcom's shareholders’.
In a subsequent press statement Vimpelcom confirmed: ‘Six of nine directors, including all three independent directors and the three Altimo-nominated directors, voted in favour of the transaction, with the Telenor-nominated directors voting against the transaction. The supervisory board did not approve an amended shareholder agreement, or vote on other shareholder-related agreements due to Telenor’s publicly stated position that, in its capacity as a shareholder of Vimpelcom, it does not support the transaction’.

Monday, December 20, 2010

Zamtel Undertakes $23 Million Digitalisation Project

Zambia Telecommunications Company (Zamtel), the country’s state-owned fixed line incumbent, has reportedly commenced the first phase of a project costing around USD23 million under which it will decommission its analogue exchanges, according to Telecompaper.

It is understood that Zamtel will replace the old analogue exchanges with digital alternatives, which it claims will allow it to offer its fixed line customers additional features, including broadband, audio and video conferencing and missed call notifications.

The first phase of the programme, which follows a successful pilot at the Woodlands exchange in Lusaka, will run until January 2011, during which time exchanges in Ridgeway, Chinika, Emmasdale and Lusaka will be upgraded. According to Zamtel’s chief communications officer, Amon Jere, the second stage of the project will see the digital upgrades take place nationwide, and will begin in the first quarter of 2011.

Friday, December 17, 2010

Maroc Telecom Ahead of FT in Benin Telecom Bid

Morocco’s Maroc Telecom, controlled by French group Vivendi, is thought to be in a good position to bid for state-owned Benin Telecoms, according to, quoting French newspaper La Lettre Mediterrannee, following previous reports that France Telecom (FT) was in pole position for the privatisation of Benin’s incumbent telco.

The schedule for privatising the PSTN and broadband operator is unclear however, with observers saying that the issue could be clouded by upcoming presidential elections next spring, whilst Benin Telecoms’ workers’ union has warned that it will ‘react strongly’ to inevitable staff restructuring (‘downsizing’) plans resulting from a sale to the private sector.

Maroc Telecom has expanded across several African nations. In neighbouring Mauritania, it acquired 51% of Mauritel in 2001, and it acquired majority control of Burkina Faso’s Onatel in 2006 and Gabon Telecom the following year.

In 2009, Maroc Telecom signed an agreement with the Malian government to become the major stakeholder of Sotelma. The group is also eyeing other markets outside the traditional French speaking African countries which have strong political ties with Morocco.

Etisalat Could Obtain Only 40% of Zain

Reuters reports that Etisalat may have to settle for a stake of 40% in Zain, lower than it initially planned. The UAE telco originally offered to buy 46% of the Kuwaiti company for USD12 billion, which when combined with treasury shares owned by Zain would have given Etisalat a controlling 51% stake. However, sources close to the deal say that opposition among some of Zain’s shareholders means that Etisalat will be able to secure only a 40% stake. Legal action had threatened to delay the transaction or potentially scupper it. Etisalat was on the record as saying that any deal could fail if definitive documents are not signed by 15 January 2011.

Thursday, November 11, 2010

Bharti and Vodafone Struggle to Make Money In Africa

For Vodafone Group Plc, Bharti Airtel Ltd. and other phone companies with about $90 billion invested in Africa, making more money from each user in the world’s fastest-growing market is becoming the biggest challenge.

The number of operators is prompting a race to the bottom on call rates. In Tanzania, which has seven phone companies, prices have fallen 90 percent over the past 18 months. Companies also face among the world’s highest “churn” rates, with users frequently changing operators, and patchy infrastructure, all of which make returns on investment difficult.
“It is hard,” said Pieter Uys, chief executive officer of Vodacom Group Ltd., which is controlled by Vodafone and is the largest provider of mobile-phone services in South Africa and Tanzania. “You have to do business in a very different way, you have to build data networks, find other ways to grow revenue.”
Phone operators gathered at Africa’s telecommunications conference that began yesterday in Cape Town want to sell services to the 50 percent of the market that doesn’t have mobile phones. They also want to service current customers more cheaply, without losing user loyalty, while stemming declines in average revenue per user, or ARPU, by offering newer services such as mobile Internet, banking and other money transactions.
“We are now dealing with an ecosystem that’s changing very, very fast,” Andile Ngacaba, chairman of Dimension Data and Convergence Partners, said at the conference. “On the one side, we see this subscriber growth and growth in data and data applications. On the other side, we see this decrease in ARPUs. This requires new models of investment such as infrastructure sharing.”
African Growth
Operators have been lured to the continent by its promise. Africa has a mobile-phone population of about 445 million handsets, according to a McKinsey & Co. report. It took 20 years for the size of the mobile-phone population to reach 200 million, and less than three years to get to the next 200 million, according to the report.
Africa has “become the fastest-growing region in the global cellular market, going from fewer than 2 million mobile phones in 1998 to more than 400 million today,” it said.
The mobile value-added services market in Africa was worth $4.5 billion in 2009, and over the next five years is forecast to grow at a compound annual growth rate of 20 percent, generating $11.5 billion by 2014, Informa Telecoms & Media, a London-based consultant, said in its Rural Connectivity Report in Africa published this month.
Capture Opportunity
About 80 percent of the sales were from messaging, while mobile Internet contributed 14 percent and mobile entertainment such as music and television 3.5 percent, the report showed.
Internet and broadband penetration is still in single digits, Uys said.
“So the possibilities are still there but it’s what you pay for it to get it, the investment in infrastructure,” he said. “If the tariffs are driven too low for whatever reason then it might also not make sense.”
In order for mobile operators to “capture this opportunity,” the market needs consolidation, McKinsey said. “The industry structure should be rationalized, for example, because many markets, even smaller ones, have four or more players.”
Competition on the continent is fiercer now than it has ever been. In the Democratic Republic of Congo and Tanzania, mobile-phone tariffs plunged between 50 percent and 60 percent in the six months through September.
Tumbling Prices
Prices in Kenya have been slashed to such an extent that Safaricom Ltd. Chief Executive Officer Bob Collymore said India’s Bharti, which bought most of Zain’s African operations last year for $9 billion, is losing money on as much as 50 percent of its voice traffic.
Safaricom has an 86 percent share of the market and is 40 percent held by Newbury, England-based Vodafone. Bharti’s head of African operations, Manoj Kohli, declined to comment on Safaricom’s remarks. “We can’t comment on our competitors’ claims,” Kohli said.
On Aug. 18, Bharti halved tariffs in Kenya to 3 shillings, Les Baillie, a spokesman for Safaricom said. Safaricom “knew that voice was always going to become a commodity,” Baillie said. “It was not expected that it would happen so rapidly though.”
Companies are scrambling to adapt their operations to the new climate.
“We have to review our business model and make it leaner and compete on price and have more quality in our network and to have more data,” said Mickael Ghossein, chief executive officer of Orange Telkom Kenya, which is 51 percent held by France Telecom SA. “We have to enhance our quality of networks.”
Sharing Towers
In South Africa, Vodacom, which is 65 percent owned by Vodafone, is investing in data networks. Data now accounts for more than 50 percent of its traffic and is growing at more than 50 percent a year, Uys said.
The company is also pushing smart devices that are able to browse the Internet to low-end segments with touchscreen phones that retail at 499 rand ($73). Once users have an improved mobile-browsing experience, data consumption increases, Uys said
Operators are also sharing infrastructure, especially to reach sparsely populated rural areas where returns on capital invested in infrastructure are low.
Infrastructure sharing and outsourcing of towers has been punted for years. Now, faced with greater competitive pressure, companies are beginning to act.
‘Good Industry’
Last month, Vodafone signed an agreement with Eaton Towers to manage its 750 towers in Ghana. On Nov. 5, American Tower Corp. agreed to buy 3,200 towers from Cell C Ltd., South Africa’s third-largest mobile phone services provider, in a deal worth $430 million.
“We are going to see more and more of those type of deals happening,” said David Lerche, a telecoms analyst at Johannesburg-based Avior Research. “There are lots of little tower companies running around trying to position themselves as tower outsourcers. It’s quite an interesting development.”
For all its challenges, the market is still attractive, Marc Rennard, vice president of Orange Mobile for Africa, Middle East and Asia, said in an interview.
While investor interest has waned a little, “we are profitable, the big players, the five, six main players are profitable,” he said. “It’s still a good industry.”

Friday, October 29, 2010

MTN Announces Increase in Subscriber Base

South Africa-based telcoms group MTN has announced that its consolidated subscriber base increased to 134.47 million as at 30 September 2010, up 4% from the 129.21 million reported at the end of June. A company statement credited the increase to ‘high quality networks, attractive value propositions and efficient distribution’.

The South and East African region, which contributes 22% of the group’s customers, increased its subscriber base by 4.9% to 30.08 million for the quarter - mainly driven by growth in its domestic market. In South Africa, the customer base rose 3.9% to 17.77 million, helped by the addition of 616,000 pre-paid users and its MTN Zone offer, which allows MTN subscribers access to a discounted call rate if they are in an area experiencing a low volume of MTN traffic. ARPU in South Africa remained stable at ZAR152 (USD21.6).

The West and Central African region, which contributes 46% of the group’s subscribers increased its customer base by 3.4% in the three month period to 61.38 million. Nigeria – MTN’s largest single market and that which contributes 60% of the region’s subscriber base - grew its base 5.1% to 36.84 million. MTN credits the increase to ‘superior network quality and a successful distribution framework’. Elsewhere in the region, Ghana’s customer base declined from 8.72 million to 8.46 million due to the introduction of mandatory SIM registration on 1 July 2010.

The Middle East and North African region, which accounts for the remaining 32% of MTN’s consolidated subscriber base, increased its numbers by 4.1% to 43.01 million. MTN says that the growth within the region was mainly due to its Iranian operation, which contributes 66% of the region’s subscribers. MTN Irancell increased its users by 5.6% to 28.49 million. Elsewhere in the region, Syria benefited from improved brand awareness, increasing its subscriber base to 4.72 million, a rise of 6.8%.

Thursday, October 28, 2010

Glo-1 Launched

West African submarine fibre-optic cable system Glo-1, which was developed by Nigeria’s second national operator Globacom and French-US vendor Alcatel-Lucent, has been commercially launched, local newspaper Leadership reports.

The 9,800km cable stretches from the UK across West Africa and has landing points in Nigeria, London and Lisbon, connecting 17 countries to the rest of the world. Globacom’s chairman, Mike Adenuga Jnr, said Nigerians will now have the opportunity to compete with the rest of the world, while broadband access and other services, such as long-distance voice, will now become more affordable in the country.

Globacom contracted Alca-Lu to install the cable system in 2005, in order fill the void of international connectivity in the region. The USD250 million cable landed in Lagos in September 2009 and Accra in Ghana the following month, and has been ready for commissioning since July 2010. The cable has ultimate capacity of 2.5Tbps and is expected to provide faster, more reliable internet services at a lower cost.

MTN Rebrands UUNet As It Takes On Kenya Market

South African telecoms giant MTN has formally announced its presence in the Kenyan broadband market, two years after acquiring a 60% stake in ailing corporate operator UUNet.

The re-branding of UUNet to MTN Business Kenya looks set to renew rivalry in the corporate data market, a marketplace in which UUNet’s fortunes have declined drastically in recent years.

Internet service providers AccessKenya and Kenya Data Networks have absorbed much of UUNet’s corporate business since 2008, whilst wireless operators Telkom Kenya and Safaricom have both embraced the relatively untapped residential broadband market in a bid to offset declining wireless revenues.

Tom Omariba, managing director of MTN Business Kenya commented: ‘An array of key structures and network transitions has been implemented to deliver standardised service and seamless integration for customers culminating in the official name-change, MTN Business Kenya’.

Dismissing speculation that MTN would try to insinuate itself into the residential market, Omariba continued: ‘You cannot be everything to all customers. We have to look at our strengths and choose which area we can serve. If you try and serve both markets, you will suffer ... that is the experience elsewhere’. MTN Business Kenya’s strategy is expected to involve a substantial cash injection, as well as providing the necessary technical expertise to strengthen its data business and grow its meagre corporate subscriber base, which MTN reported has dwindled to just 700 customers.

Wednesday, October 27, 2010

Zim Not Selling Cellco's Yet, Only Restructuring

Zimbabwean newspaper Sunday News reported that four state-owned enterprises have been scheduled for restructuring before the end of this year, although incumbent PSTN operator TelOne is not on the list.

However, State Enterprises Minister Gorden Moyo said progress had also been made towards restructuring at six other companies – including TelOne, which has been earmarked for part-privatisation – although in these cases it was less likely that results would be achieved by year-end.

Also on the secondary list of six – which includes the likes of Air Zimbabwe and National Railways of Zimbabwe – is state-owned GSM mobile operator NetOne.

In February 2010 the government confirmed MTN South Africa was among ‘several’ foreign companies that had expressed interest in buying a stake in NetOne; in late 2009 MTN and NetOne signed a non-disclosure agreement on their ongoing negotiations. Telkom South Africa, meanwhile, is reportedly eyeing a stake in TelOne, which has also confirmed negotiating with a foreign suitor under a secrecy pact.

Over 70 state holdings have been earmarked for restructuring, under a Corporate Governance Framework which seeks among other things to compel the firms to submit audited financial statements and hold annual general meetings.

Early this year, Moyo instructed the parastatals to disclose audited results by the end of October, and most of the organisations’ financial reports are now reportedly with the Auditor-General.

‘The main problem is that some of the parastatals last presented their results more than five years [ago] and it is not easy to reconcile the books in a short time. But I understand a lot of the companies have now presented their results and the Auditor-General’s office has hired an independent auditing company to help look into the results,’ explained the minister.

Infraco To Launch Broadband In November

Broadband Infraco, the new State-Owned Enterprise (SOE) that will sell high capacity long distance transmission services to network service providers in South Africa, has confirmed that it will unveil its new ZAR1 billion (USD144.1 million) network during the third week of November.

The company has been plagued by licensing issues since its inception three years ago. The Broadband Infraco Act of 2007 stipulates that telecoms regulator the Independent Communications Authority of South Africa (ICASA) is obliged to issue Broadband Infraco both an Individual-Electronic Communications Network Services (I-ECNS) licence and an Electronic Communication Services (ECS) licence.

However, commercial ISPs objected to it receiving an ECS licence, as they claimed it would give the company an unfair advantage. In January 2010 ICASA bowed to communications minister Siphiwe Nyanda's policy directive, and only awarded the I-ECNS concession.

Broadband Infraco has since confirmed that it will operate exclusively within a wholesale business model, targeting both fixed and mobile operators, as well as internet service providers. Licensed operators may buy multiple capacity increments of 155Mbps - up to 10Gbps. Broadband Infraco’s lowest capacity service reportedly offers transmission speeds akin to 20 HD movies being screened simultaneously.

CEO Dave Smith commented: ‘In anticipation of receiving the I-ECNS licence, Broadband Infraco installed some 11,765km of fibre optic cable connecting Johannesburg, Pretoria, Cape Town and Durban and other large metropolitan centres including Bloemfontein, Kimberley, Port Elizabeth, East London, Nelspruit and Polokwane. The award of the Electronic Communications Services (ECS) licence from ICASA is the remaining piece of the puzzle for Broadband Infraco to deliver entirely on all aspects of its statutory mandate in accordance with applicable legislation’. According to Broadband Infraco, its network also extends connectivity to the borders of South Africa’s neighbouring countries, namely: Namibia, Botswana, Zimbabwe, Mozambique, Lesotho and Swaziland. The fibre-optic cables are scalable up to hundreds of gigabits of data per second, depending on future growth.

Access Kenya extends WiMAX To Nyer, Nanyuki

AccessKenya has announced that it has expanded its WiMAX network to the towns of Nyeri, Nanyuki and Mukurwe-ini in central Kenya.

The company said that there have been numerous requests for its services in these areas, with AccessKenya identifying sufficient commercial potential in the region. New customers will benefit from Layer 2 and Layer 3 Virtual Private Networks (VPNs), inter-branch connectivity, MPLS and other value-added services, all of which will be linked to AccessKenya's backbone. In 2009 AccessKenya expanded its WiMAX network from Nairobi and Mombasa to Nakuru, Eldoret and Kisumu in order to meet the growing demand for its services.

AccessKenya had signed up 3,000 residential customers during 2009, and is expecting to reach 7,000 by end-2010. Corporate leased-line connections increased from 2,550 to 3,150 during 2009. In August 2010 AccessKenya claimed that it had a 42% share of corporate customers.

Nigeria Targets 350 Nigerian Villages with Huawei Deal

MTN Nigeria has signed a deal worth over USD40 million with Chinese equipment supplier Huawei Technologies for the deployment of rural telephony infrastructure in roughly 350 villages across the country, local news source Nigerian Compass reports.

‘Our goal is to cover every village in Nigeria,’ Ahmad Faroukh, CEO of MTN Nigeria, said at the signing of the deal in Lagos, adding: ‘The first phase [of the project] will see 350 villages covered before the end of May 2011, with the support of our strategic partner, Huawei Technologies, while 500 villages will be covered in the second phase before the end of December 2011.’ Following research into Nigeria’s telecoms sector, MTN concluded that around 500 villages and communities and 40 million Nigerians do not have access to basic telephony services.

Under the project, Huawei will deploy environment friendly base stations that consume low energy.

Tuesday, October 19, 2010

Al-Shabab Bans Mobile Money in Somalia

Somali rebel group al-Shabab has imposed a ban on the mobile money transfer service known as ‘Zaad’, according to a report by Reuters.

In a statement issued by the militant group, al-Shabab has ordered local telecoms companies to stop offering Zaad by 31 December 2010, stating the service poses a threat to the economy. The group claims that use of Somali shillings has declined in recent months.

Al-Shabab also says that mobile banking could expose Somalia to interference by Western countries through the international partners of the Somali telecoms firms.

Southern Sudan’s Hormuud Telecom, Golis Telecommunications in Somalia’s semi-autonomous region of Puntland and Telesom in the breakaway republic of Somaliland all offer Zaad, which allows customers to use their mobile handsets to transfer money, make purchases, pay bills and recharge airtime.

In a country that has lacked an effective central government for almost two decades and where the banking sector remains underdeveloped, the Zaad service has become a popular means of moving money.

Mozambique Cellcos Plan to Use Post Office For SIM Registration

Mozambique's two mobile phone operators, mCel and Vodacom Mozambique, have reportedly entered into negotiations with the Mozambique Post Office to use its facilities to assist with the ongoing statutory registration of pre-paid SIM cards.

In an interview with Maputo daily newspaper Noticias, Luis Rigo, chairperson of the Post Office board confirmed that his company has been approached by both operators for the use of its services; Post Offices exist in most of the country's 128 districts.

However, although the Post Office has a far larger network than either mCel or Vodacom, it is not present in every district, and not all of its branches are equipped to carry out the government-endorsed registration process. Rigo confirmed that the Post Office was currently investigating how many of its branches possess the minimum requirements to carry out the registration, namely: electricity, a photocopier and paper.

Last week independent newspaper Mediafax reported a thriving black market trade in outlying internet cafes charging anxious mobile phone subscribers USD1 to register their details online; the majority of the population currently live on less than USD1 per day.

Users of pre-paid mobile phones in Mozambique have until 15 November to register their SIM cards, with those users who fail to meet the deadline having their SIM cards ‘blocked’. The push for SIM card registration comes in the wake of widespread riots in Maputo and Matola in September over a 30% rise in bread prices; the riots were reportedly co-ordinated by a widespread text message campaign.

Mozambique reported a total of 5.56 million subscribers at end-June 2010. Neither mCel or Vodacom have revealed how many subscribers they have managed to register thus far.

Monday, October 18, 2010

BTC IPO For Next Year

Botswana’s Public Enterprises Evaluation and Privatisation Agency (PEEPA) has said that an initial public offering (IPO) for fixed line incumbent Botswana Telecommunications Corporation (BTC) is likely to take place after the end of the operator’s financial year in March 2011.

Local news source Mmegi Online reports that a 49% stake in BTC will be sold to investors and BTC employees, while the government will retain the remaining 51%. Commenting on BTC’s privatisation, Kgotla Ramaphane, CEO of PEEPA, said: ‘The process involves the appointment of advisers for the IPO and many other stakeholders,’ Ramaphane noted, adding: ‘We are working towards the end of the financial year, which is March 2011.

At this time, we should know the date for the IPO. However, there is a lot of groundwork and further discussions to be had before we can arrive there.’ According to the operator’s spokesperson Anno Tsie, discussions will involve the number of shares that will be set aside for BTC employees, as well as the price of shares and the listing requirements for the Botswana Stock Exchange.

The privatisation of BTC was first mooted in June 2006, with initial plans envisaging the sale of between 40% and 49% of the telco to a strategic investor and a 5% share to BTC employees. The remaining shares would be retained by the government for a future stock market listing. The first stage of the privatisation began in January 2007, with a tender put out for ‘advisory services’.

In February 2008 PEEPA signed a contract with the International Finance Corporation (IFC) to act as transactional advisor in the privatisation. The IFC completed due diligence in November 2008 and in 2009 the Botswana Telecommunications Corporation (Transition) Bill was enacted in parliament, which established BTC as a public company under the Company Act.

Tanzania Urges More Investment In Rural Telecommunication

Dr Patrick Makungu, Permanent Secretary in the Ministry of Communications, Science and Technology in Tanzania, has urged local telecoms operators to increase investment in rural areas rather than concentrating on urban areas.

Local paper the East African Business Week quotes Dr Makungu as saying that operators need to address the problem of a shortfall in affordable services in remote parts of the country.

‘We need high quality telecom services at affordable prices that cover rural areas extensively which have almost 80% of Tanzanians as compared to urban areas population,’ he was quoted as saying.

Wednesday, October 13, 2010

Nigeria Approves Sale of NITEL To New Generation

The Nigerian government has approved the sale of ailing state-run incumbent telco Nigeria Telecommunications (NITEL) to New Generation Telecommunications, eight months after a panel was set up to review the sale process following confusion over the consortium’s ownership, Bloomberg reports.

New Generation – consisting of China Unicom, Minerva Group of Dubai and Nigeria’s GiCell Wireless – was revealed as the preferred buyer for the 75% stake in NITEL and its wireless unit M-Tel in February 2010, after beating four other hopefuls with a bid of USD2.5 billion.

However, initial confusion about China Unicom’s involvement in the consortium led to criticism that the process had been marred by irregularities and a lack of transparency.

Rather than approving the bid, the National Council of Privatisation (NCP) opted to inaugurate a committee to undertake further due diligence on the bidders of NITEL. In June 2010 the panel recommended that the deal be approved.

In a statement released yesterday the country’s privatisation body, the Bureau of Public Enterprise (BPE), announced that President Goodluck Jonathan has now approved the sale of NITEL to New Generation. The consortium has been asked to pay a bid security of USD750 million within ten days and will have 60 days to pay the remaining USD1.75 billion.

Friday, October 1, 2010

Access Increases Internet Speeds As it Reacts to Telkom Kenya Action

ISP AccessKenya has announced that it has doubled its residential broadband speeds for all subscribers to its Access@Home service; the speeds apply to subscribers of its Value, Premium and Elite packages.

Further, AccessKenya has confirmed that for the last quarter of 2010, any new customers signing up to Access@Home for a three month period will receive an additional month for free. As previously reported on CommsUpdate, AccessKenya recently announced that its turnover dropped by 17.5% to KES876 million (USD10.38 million) in 1H10, after its strategy of increasing bandwidth but freezing prices severely affected its bottom line.

This week rival telco Telkom Kenya doubled customers download limits, as part of a month-long promotion.

Jonathan Somen, managing director of AccessKenya commented: ‘As we grow and get more subscribers, we will continue to work on offering them more value and more speed. The market told us that they wanted a guaranteed service but with more bandwidth. Our new improved offerings keep the basic benefits of buying guaranteed speeds, while at the same time offering customers much more speed for the same money. Access@Home offers a service to our customers completely unlike any other residential internet offering in the market. Firstly, we offer customers a guaranteed high speed at a very affordable and fixed price. This is backed up with excellent levels of service and absolutely no data caps - effectively a corporate-style guaranteed service for users at home. Our new speeds come with glad tidings for our 4,000 residential clients. They shall enjoy these increased speeds at no extra cost from the comfort of their homes’.

Cell C Launches HSPA Network in East London

South African wireless operator Cell C has confirmed that it has launched its 900MHz HSPA+ network in a third city – East London; the network has already been launched in Port Elizabeth and Bloemfontein.

The first phase of the rollout in East London will see 81% of the city’s population covered by the network. A second phase, which will ensure 100% coverage for the city and surrounding areas, should be completed by the end of this year. Subscribers in East London can expect data speeds of between 4Mbps and 7Mbps, although Cell C has claimed that customers elsewhere will be able to achieve speeds of 10Mbps.

In a related story, TechCentral reports that Cell C will launch its HSPA+ network in Cape Town today, describing it as ‘a city that has proved notoriously hard for operators to deliver wireless services’. TechCentral reports that Cell C’s rival wireless providers have experienced serious difficulties when trying to purchase ‘high-sites’ for 3G base stations in Cape Town. It is not known which suburbs will enjoy coverage at launch. Previously, Cell C CEO Lars Reichelt has promised to cover more than a third of South Africa’s population by the end of 2010. According to Reichelt, a single HSPA+ 900MHz transmitter can cover a three to five times larger area than those using a higher band.

Operators To Foot Bill of SIM Registration in Mozambique

The compulsory registration of SIM cards in Mozambique must be funded by Mozambique's two mobile operators, mCel and Vodacom Mozambique, regulatory body the Instituto Nacional das Comunicacoes (INCM) has declared.

In a local media briefing, Francisco Chate, director of posts and telecommunications at the INCM insisted that its recently announced SIM card registration scheme must be free of charge to subscribers, with Chate warning the two cellcos that they must not pass on any associated costs to their respective subscribers.

Doubts have been raised over the logistics of Mozambique’s SIM card registration process, as both operators have few retail outlets and depend on itinerant vendors to sell SIM cards around the country.

The INCM has already stipulated that vendors are prohibited from carrying out the registration process, which will reportedly require valid identification, signatures and fingerprinting.

Neither mCel nor Vodacom have yet to advertise the imminent SIM registration online or in print. When questioned by reporters regarding the feasibility of registering 5.6 million SIM cards by 15 November, Chate admitted: ‘It is a very tight schedule.’

ICASA Issues Mobile TV Trial Licence

The Independent Communications Authority of South Africa (ICASA) has issued a one-year trial permit to the locally-owned Mobile TV consortium to trial Digital Multimedia Broadcasting (DMB) technology for broadcast mobile TV services under the name 'TV4U'. The group hopes to get a trial service up and running for 1,000 users in a month or so, after missing out in a recent auction of Digital Video Broadcast-Handheld (DVB-H) frequencies, which were awarded to and Multichoice.

Rwanda Plans to Reduce Interconnection Rates

Rwanda Utilities Regulatory Agency (RURA) is working on a plan to lower interconnection fees among telecom operators, reports AllAfrica.

The watchdog’s acting director general Regis Gatarayiha said in an interview that interconnection charges were acting as a bottleneck to the sector’s growth, as they prevented retail prices falling, and that bringing down the standard charge from the current RWF40 (USD0.067) per minute would compel operators to lower the cost of mobile communications for end-users.

The regulator has commissioned a study ahead of a decision on new pricing, and hopes to adjust wholesale rates within four months, according to Gatarayiha.

Meanwhile, the same report quotes Mr Gatarayiha as saying that plans to licence a fourth mobile operator have been suspended until a formal policy decision is taken. He disclosed that the process would have started early in September and been completed within six months, but delays have occurred whilst RURA seeks agreement with operators on the licensing procedure and conditions. ‘We still have some three months to legalise everything, agree on the process and we may start it early next year, and I don't see it going beyond June,’ he said. The former director general of RURA, Diogene Mudenge, previously stated that a fourth licence would be issued ‘by the end of 2010’, whilst revealing that numbering codes for a new entrant had been reserved.

In another mobile sector development, Gatarayiha said that the government will start registering all active SIM cards early next year in an attempt to prevent crimes committed using cell phones.

Safaricom Plans to Increase Maximum Cash Transfer

CONVERGED communication solutions provider Safaricom has announced plans to increase its deposits in its M-Pesa services, with the aim of enabling its customers to transact larger amounts of money.

The operator plans to increase the maximum amount that a subscriber can transact in a day to
US$ 650, up from the current US$450.

Outgoing Safaricom Chief Executive officer Michael Joseph said the company intends to split M-Pesa into two arms, one for customer-to-customer (C2C) transactions, and the other for customer-to-business (C2B) transactions.

Joseph said the company forwarded the proposed upgrade of its M-Pesa money transfer service facility to the Kenyan Central Bank (CBK), and would commence implementing it as soon as CBK okayed the changes.

He said they had realised that some of the transactions require customers to transfer larger amounts than the current limit of US$450. Safaricom also plans to upgrade the service to link it with the Internet, a move that is expected to enable customers to make M-Pesa transactions online. Currently, transactions are only made through mobile handsets.

Joseph said Safaricom would strive to remain a market leader in the data segment, with M-Pesa remaining its most formidable weapon.

“M-Pesa has become more than just a marketing tool for us in providing services to our subscribers conveniently,” he said.

Close to 300 companies have partnered with Safaricom to settle bills via M-Pesa. Joseph revealed that they were in talks with the CBK for permission to increase the money transfer limits on M-Pesa, which is currently capped at Sh35 000 per transaction.

“We want to take the maximum amount you can transact to Sh50 000 (US$650) and also lower the minimum amount, but all that is subject to CBK approval,” he said without giving a clear timeline on when that would happen.

Adoption of mobile banking has been taking root in the country to speed up access to financial services and reach the un-banked population.

“We are moving close to €150 million (Sh16.5 billion) a day; that’s an incredible amount of money. We are moving more money in a month than what Western Union does,” he said.

Joseph said the mobile market is gearing for a major battle in the control of the customer numbers.
“It is not really a price war; it’s a total war, which Safaricom intends to win not by an inch, or a foot but by a long mile,” Joseph said.

Safaricom’s dominance in the mobile industry has come under pressure by the entrance of Bharti Airtel, Zain Africa’s new shareholders, who have made it clear they are out to attain leadership in the next three to four years.

Thursday, September 30, 2010

Telkom Kenya Cuts Broadband Rates By 50%

Telkom Kenya has announced that it has reduced broadband costs by 50% as part of a one-month promotion. The telco claims that the new promotion has been informed by market research pointing to an increase in demand amongst students and young professionals. Telkom Kenya CEO Mickael Ghossein commented: ‘If you were spending KES150 (USD1.78) to buy an internet bundle of 50MB you will now be able to get 100MB for the same amount; for KES850, you will get 1000MB instead of the 500MB that you got previously’. Industry insiders view the move as an attempt to secure its leadership in the burgeoning broadband market. Based on retaliatory trends exhibited in the past, rival Safaricom, which recently entered the Kenyan broadband market, is expected to announce a similar move in the near future.

In other news, Telkom’s move has increased the pressure on Kenya’s long-standing internet provider AccessKenya, which has focused on corporate leased lines and high-end residential customers since its inception. AccessKenya announced this week that its turnover dropped by 17.5% to KES876 million at the end of 1H10; this year the firm opted to increase bandwidth capacity to its customers but freeze its prices. A company spokesperson said that growth of the firm's revenues would depend on ‘strong growth in both the corporate and residential customer base, driven by higher speeds and lower costs offered to customers’. However, Telkom’s move suggests that if AccessKenya does lower its charges, its income may well be diminished even further. According to AccessKernya, the corporate leased line segment is currently its core source of income, accounting for 92% of the firm's revenues in 1H10.

Wednesday, September 29, 2010

Competitors Follow Warid as Price War Rages In Uganda

Graphic: New Vision
ZAIN, MTN and Uganda Telecom yesterday announced a reduction in call rates as the tariff war took a new front in Uganda, one of Africa’s fiercest telecom markets.  Last week, Warid drew first blood by dropping call rates to sh5 per second across all networks.  The move by Warid set the stage for a furious price war as the telecom firms tried to outpace each other.

On Tuesday, MTN and UTL declared lower call rates between sh4 to sh5. But Zain quickly outmaneuvered the three by announcing sh3 per second to all networks, including Zain to Zain. It now means that Zain is the cheapest operator, charging sh180 (USD0.082) per minute to all networks. The offer applies to both prepaid and postpaid customers.

Levi Nyakundi, the Zain marketing manager for usage and retention, said the drop was permanent.  “It is a 66% price drop on the most popular tariff plan - Zain Flexi - which has been sh9 on-net and sh11 off-network,” said Nyakundi.

It was expected that Zain, bought by India's Bharti Airtel, would adopt a drastic pricing model largely on heavily discounted call charges, as happened in Kenya about two months ago, where calls are as cheap as sh81 (Ksh3).

 Uganda Telecom
Uganda Telecom had also turned the barrels to the other operators, announcing a rate of sh4 for calls from UTL to UTL and sh5 for calls to other networks.  According to a statement from UTL’s chief marketing officer, Mohamadou Konkobo, UTL customers will now spend a maximum of sh240 to make a call within the network and a maximum of sh300 to call other networks.

On its part, MTN announced a “celebration promotion” at sh3 per second on the per-second billing tariff plan and sh160 for calls within the MTN Yellowmax tariff plan. Isaac Nsereko, the MTN chief marketing officer, explained that clients on the per-minute plan will pay sh320 per minute for the first 10 minutes of the day. For the rest of the day, calls will cost sh160 within the MTN network.

On the MTN per-second tariff plan, customers will pay sh6 for the first five minutes, then sh3 per second for the rest of the day within the MTN network. Calls from MTN to other networks remain at sh6 per second all day, which remains one of the highest in the market.

Warid  Telecom
Warid CEO Madhur Taneja, whose firm sparked off the price war last week, said he was pleased that other telecoms were responding to the price reduction. “Reducing call rates is the way to go and the consumers will get value for their money and I hope that every player in the market does so,” he said. Officials from the other mobile telephone companies; Orange, Smile and i-Telecom were not available for comment yesterday.
The current price war is seen as a result of growing competition in the market as well as industry regulator Uganda Communications Commission’s recent reduction of the ceiling of interconnection fees from Shs180 to Shs130 per minute where firms fail to agree bilaterally.

It has been a feverish seven days in which telecoms have spied on each other for tariff structures booked with advertising agencies and letters to the regulator, Uganda Communications Commission (UCC), with cancellation after cancellation before final tariff plans were agreed upon.

MTN boasts of about 50% of the market share. It means there are still more calls from MTN to MTN. But the telecom giant now faces stiff competition on voice that will be compounded when Bharti adapts its Asian model, where it has over 100 million subscribers.

In a letter to the UCC dated September 28, 2010, the MTN chief executive officer, Themba Khumalo, said the network had introduced the tariff to celebrate its 12 years of existence in Uganda.   “During these 12 years, we have been at the forefront of making telecommunications affordable and accessible,” Khumalo wrote.  The new MTN tariffs have been launched under the umbrella campaign labelled ‘Yarriba’.

The UCC public relations officer, Isaac Kalembe, said the development is good for the industry.  [Personally] I think we are moving in the right direction because it is the wish of UCC that the rates are reduced,” said Kalembe.

Analysts also believe this plays into the hands of the consumer who has been paying an exorbitant price compared to other regional markets, largely because of the high interconnection fees.

There has not been a response yet from Orange Uganda.  Orange is the most recent entrant to the country's mobile telecom market.

Zain Kenya Rebrands As Bharti Airtel on October 15

Zain Kenya will commence its re-branding exercise on 15 October, taking up the identity of its new owner, Indian telecom giant Bharti Airtel.

Zain has said that unlike previous re-branding exercises, when its predecessors entered the market using expensive above-the-line (ATL) strategies, Bharti Airtel will adopt corporate social responsibility (CSR) as its entry strategy, prioritising community empowerment as a key part of its branding drive. Zain has reportedly enlisted the assistance of vendors and street traders in rural markets to increase brand awareness.

A Zain Kenya official commented: ‘This is the first time a telecoms firm will be launching in the country with less activity recorded in the above-the-line strategies and more emphasis on ground activities.’ The shift to Bharti Airtel marks the fourth time that Zain Kenya has changed its brand name during its ten year operating history.

The operator entered the Kenyan wireless market as Kencell in 2000, before changing to Celtel Kenya in 2004 and Zain Kenya in 2008. As at June 2010 Zain Kenya reported 1.89 million subscribers, giving it a 9.4% market share.

Telecom Egypt Mulls MVNO Option

Egypt’s fixed line incumbent Telecom Egypt (TE) is reportedly mulling the option of setting up a mobile virtual network operator (MVNO), according to Reuters, citing local press reports.

hile TE already holds a 45% stake in the country’s second largest cellco by subscribers, Vodafone Egypt, it is believed that it is considering the MVNO venture as a way to become more involved in the country’s mobile sector, prompted in part by continued fixed to mobile substitution.

TE had earlier this year looked to increase its stake in Vodafone Egypt, but the cellco’s UK-based parent company, Vodafone Group, ended negotiations in June 2010 over a possible divestment of its interest in its Egyptian subsidiary – little more than two weeks after the parties first began discussions.

TE had approached the British group in April 2010 to sound out the possibility of a possible deal, which had been valued at between GBP3 billion and GBP4 billion (USD4 billion-USD7 billion).

Mozambique SIM Registration Deadline Set For 15 November

Users of pre-paid mobile phones in Mozambique have until 15 November to register their SIM cards, state-controlled Radio Mozambique has reported, citing Transport and Communications minister Paulo Zucula. The minister has indicated that those users who fail to meet the deadline will have their SIM cards ‘blocked’.

Additional regulations are thought to include the prohibition of selling SIM cards to persons under the age of 14, and a limit of three SIM cards registered to any one subscriber.

The push for SIM card registration comes in the wake of widespread riots in Maputo and Matola earlier this month over a 30% rise in bread prices; the riots were reportedly co-ordinated by a widespread text message campaign. In the aftermath of the riots the INCM imposed a controversial three-day text message suspension on all mobile operators.

Tuesday, September 28, 2010

Bharti's Bid For Zain Zambia Rejected By Bourse Regulator

Zambia’s Securities and Exchange Commission (SEC) has rejected Indian operator Bharti Airtel’s latest bid for the publicly listed stake of its majority-owned mobile subsidiary Zain Zambia, The Post reports.

According to the local newspaper, the SEC turned down a bid by Bharti Airtel of ZMK710 (USD0.144) per share for the 22% stake, with the offer refused on the basis that it was too far below market estimations.

This is the second time that Bharti has had an offer for the stake rejected; last month it put forward a ZMK675 per share proposal. It is believed that most commissioners at the SEC believe that the lowest acceptable price for Bharti to proceed with a mandatory offer would be ZWK1,126 per share.

Monday, September 27, 2010

Telkom SA Prepares to Spread Into the Rest of Africa

SOUTH African Telecommunications operator, Telkom, has secured operating licences in east, south and west Africa, the company revealed on Monday in an interview.

Responding to questions, Telkom spokesman Pynee Chetty said the telecoms giant had secured operating licences in Nigeria, Zimbabwe, Tanzania, Ghana, Kenya, Uganda, Zambia, Swaziland and Namibia.
“Telkom’s ambition is to become a significant Information Communication Technology (ICT) player in Sub-Saharan Africa, focusing on the enterprise market.

“Apart from the satellite-based (SAT3) cable system, Telkom has invested in the new WACS, EASSy and SAFE submarine cables systems to further strengthen its position with regards to connectivity on the African continent,” said Chetty.

He said the operations in those countries consisted of consumer and enterprise solutions within the respective markets.

Chetty said Telkom would continue to service all these markets and acquire capabilities, through partnerships or own assets, to meet the demands of the local African enterprise and global multinational customers.
“The company continues to investigate opportunities in Africa and endeavours to expand into countries where customer demand warrants such actions.
“As far as the specific products and services are concerned, it is logical to utilise existing skills and capabilities acquired in the domestic market as far as possible when entering new markets,” said Chetty.