Tuesday, March 30, 2010

MTN's Stake in NetOne Could Fall Through

South African news service Bizcommunity reports that MTN’s planned acquisition of a 49% stake in Zimbabwean cellco NetOne could be in danger of collapsing after it was revealed that some members of the government are opposed to its privatisation. Finance Minister Tendai Biti is said to have told a parliamentary committee that there was growing discomfort over the sale. ‘Some of us are uncomfortable selling NetOne,’ Biti said. ‘We believe it [NetOne's poor performance] is a management issue.’ The reports claims that Biti also said the mobile network business was ‘like printing money,’ and that there was no reason for NetOne to be in its current state when rival cellco Econet Wireless Zimbabwe was ‘making USD65 million every month.’

NetOne is currently the smallest wireless network operator by subscribers in Zimbabwe, despite being the first to launch. At the end of 2009 the company claimed approximately 10% of the country’s wireless subscriber market.

Thursday, March 25, 2010

MTN & Bharti: Former Suitors Now In Face-Off As Zain Africa Is Sold

Sunil Bharti Mittal, the billionaire chairman of India’s largest mobile-phone company, spent millions of dollars and almost two years wooing MTN Group Ltd. for its Africa business. Now he’s picking a fight with them.

Mittal was thwarted twice while pursuing a $23 billion merger with Johannesburg-based MTN that would have created one of the five largest phone companies in the world. His Bharti Airtel Ltd. then courted Zain, offering $9 billion for the Kuwaiti mobile-phone company’s operations in 15 African countries in an effort to offset slowing profit growth at home.

Bharti may sign an agreement with Zain as early as this week, three people familiar with the negotiations have said. If the deal goes through, Bharti and MTN will go from being potential partners to foes. Zain and MTN go head-to-head in five countries, including Nigeria, the largest African country by mobile-phone subscribers and population. MTN is No. 1 in Nigeria, followed by Zain.

“They’ve decided to venture into the forest on their own,” MTN Chief Executive Officer Phuthuma Nhleko said. “They would have been in a better position if we were holding their hand.”

Bharti had no choice. Bharti and MTN agreed on terms in September, yet opposition from South African authorities scuttled the deal. Reserve Bank Governor Tito Mboweni said Oct. 1 that MTN “must remain a South African company.”


Bharti and MTN learned much about each other during their two rounds of matchmaking. Each stage yielded thousands of pages of documents containing such details as vendor contracts, supplier pricing arrangements and the costs of installing and maintaining cell-phone towers.

Those papers, plus MTN’s $3.2 billion cash hoard and its experience in sub-Saharan Africa, portray MTN as a company Mittal may have been better off having on his side, said Taina Erajuuri of Helsinki-based Fim Asset Management.

“It’s difficult now for Bharti because MTN is such a superior company, and now they have to compete with them,” said Erajuuri, who helps manage $1.4 billion in emerging markets, including Indian equities. “MTN was the first choice, and it would have been the better buy.”

MTN has a $31 billion market capitalization, 28 percent operating margins, and expects to add 20 million subscribers in 2010 to its 116 million customer base, mostly in markets like Nigeria, Ghana and Iran. Profits of 14.7 billion rand ($2 billion) last year missed analyst estimates as the rand climbed 24 percent against the dollar.  MTN shares have gained 3.1 percent so far this year compared with a 6.7 percent decline for Bharti.

African Assets

Bharti also is buying operations that MTN once coveted. Nhleko was outbid by Zain, formerly known as Mobile Telecommunications Co., in 2006 for Celtel International BV. Zain paid $3.4 billion for Celtel, compared with MTN’s $2.7 billion bid. Zain bought companies in 13 African countries, all of which it is now selling to Bharti.

Zain’s board said Feb. 16 that Bharti’s offer could yield a $5 billion profit. It ends a seven-year African adventure for the Kuwaiti firm in which it spent as much as $12 billion to win 42 million customers in an area stretching from the Atlantic Ocean to the Gulf of Aden. It only intermittently turned a profit.

Overseas expansion is the only way for Bharti to escape slowing profit growth in India, where price competition from 10 other players -- including Japan’s NTT DoCoMo Inc. and Newbury, England-based Vodafone Group Plc, the world’s largest mobile phone company by revenue -- pushed call rates below half-a-U.S. cent per minute.

121 Million Subscribers

Bharti’s 121 million subscribers, more than the combined populations of Spain and the United Kingdom, makes it India’s largest wireless provider, closely followed by Reliance Communications Ltd, which pursued a merger with MTN after Bharti’s talks failed the first time in May 2008. Price competition has meant that much of urban India already carries cell phones, while rural customers are more difficult to attract and service.

“Mittal wants to diversify and find new markets for future growth, and most of the growth is in the developing world,” said Kurt Hellstrom, former World Chief Executive for Ericsson AB and a Bharti board member in 2004-2009. “Africa is a place India understands.”

Bharti has limited overseas experience. It started operating in Sri Lanka in January 2009, and two months ago it paid $300 million for Warid Telecom, a 3-million-subscriber company based in Dhaka, Bangladesh.

MTN’s Span

By comparison, MTN operates in 21 different countries, each with its own regulatory conditions. More than 80 percent of its earnings come from outside its home market.

The company may spend as much as $10.4 billion through 2011 building phone towers, sponsoring the World Cup in South Africa this June and introducing a $20 cell phone, according to the African Alliance South Africa Securities Ltd., a Johannesburg- based research firm.

A third of that investment may be made in Nigeria, according to the report. That compares to the $1 billion a year that Mittal told analysts Feb. 25 he intends to spend on capital expenditures in all 15 countries annually.

“A lot depends on what Bharti will do,” said Brian Neilson, head of Johannesburg-based telecom research consultant BMI-Knowledge. “Even if Bharti invests aggressively, MTN will not take the challenge lying down.”


Cell C, Nokia Bring Football to the Phone

The football fans of South Africa can now have access to multimedia information on football training and techniques via their mobile. The new deal signed between South African mobile operator Cell C and Nike is aimed at creating a starter pack to give quick doze of football related information to both fans and players.

Nike Football+, a digital coaching programme aimed at players who want to improve their game would be offered as the starter pack of the Cell C Nike Football+ along with advice and instructions from top coaches and clubs like Barcelona, Arsenal, Liverpool or Juventus. In addition, exclusive downloads and Nike events could also be gained access by the subscribers.

Apart from this, several other offers are included like the hosting of Nike Football content on MXit, one of the biggest South African youth portals, also open to Cell C subscribers and named Cell C Locker Room.
News, audio, video, adverts from Nike, football leagues and live updates, scores and goal alerts are featured in the content. The Cell C Nike Football+ starter pack is available at the rate of ZAR 3.99 nationwide.

Zimbabwe Reaches Turning Point In ICT

Zimbabwe has reached a turning point in its destiny and ICT markets in the country are taking off, according to a new study published by Technology Strategies International in partnership with BroadGroup TMT Ventures.­ The report says that the Global Political Agreement, as tentative as it is, coupled with the dollarisation of the economy after years of hyperinflation, have resulted in a surge in investment into the ICT sector in the country.

"The acid test for the Zimbabwean ICT sector is to see what companies already active in the sector are doing", says Christie Christelis, President of Technology Strategies International. "Over the past year we have seen massive investment into the mobile market in Zimbabwe, with the number of subscribers more than doubling in a single year."

Although the country is experiencing a chronic shortage of capital, and the political situation is far from stable, it is evident that there is a huge latent demand for ICT services. The recent surge in demand is demonstrative of that, says Christelis. With a mobile teledensity of 31.5 (per 100 population) Zimbabwe is still well behind the rest of Africa, indicating that there is still strong potential for growth over the next five years.

He acknowledges that the risks are high in the Zimbabwean market, but points out that the window of opportunity for foreign investors to make large returns is likely to remain open only for the next two years. By that time the situation in Zimbabwe will have stabilized to a much greater extent and the high return/high risk opportunities will have been taken.

"There is a unique opportunity for private equity investments in Zimbabwe," Christelis says. "The country's banks are unable to provide any capital for business ventures, and Zimbabwe is on the blacklist of a number of donor organizations. Savvy private equity investors - those with an appetite for risk - are likely to make very good returns if they enter the market now."

Three of largest opportunity areas, according to Christelis, are the mobile market, both at the retail and infrastructure levels, providing last mile access through advanced technologies such as Wi-Fi, and laying down broadband infrastructure to connect to the undersea cables circling Africa. The country has dismal international internet bandwidth. Increasing the available bandwidth will do much to stimulate the economy, he says.

The report predicts that over the next five years the number of mobile subscribers in Zimbabwe will grow at an annual rate of about 25% (CAGR), while internet usage will double.

Tanzania Licences Five More Cellcos

An unconfirmed report in Tanzania’s The Citizen newspaper claims that the national telecoms regulator has licensed five more companies to offer cellular-based services in the country. According to the paper, the Tanzania Communications Regulatory Authority (TCRA) has licensed MyCell, Egotel, Rural Netco, Smile and ExcellentCom, bringing to a round dozen the number of licensed mobile players in Tanzania. ‘They are expected to enter the country’s communication industry when the process to give them network facility licensees is completed,’ TCRA director-general John Nkoma is quoted as telling the ICT Summit in Dar es Salaam.

Mobinil Get's Central bank's Apprroval for Mobile Money Service

Egypt's central bank has granted BNP Paribas a preliminary approval for a mobile money transfer licence via local mobile network operator, Mobinil. The agreement with the mobile network and the banking regulator has to be formalised before the service can be launched.

Rwandatel Issues High Speed 3G Modem

Rwanda's largest Internet Service Provider (ISP) by market share, Rwandatel has launched a new modem that is compatible with the company's 3G mobile network, offering peak download speeds of up to 7.2Mbps.

Wednesday, March 24, 2010

Zain. Going, Going, Gone. Bharti Readies to Take on Africa

With a deal between two emerging markets giants thought to have been concluded, the acquisition of Zain’s sub Saharan African assets represents a landmark deal for both Bharti Airtel and Zain, and for the African region itself.

Indian operator Bharti, which closed financing for the deal to the tune of $8.3bn earlier this week, will be transformed into a major global operating group becoming the world’s fifth largest operator by customer footprint.

But while Africa provides tremendous growth opportunity, entering 13 countries with very different market dynamics in one go will create a number of challenges, warns Nick Jotischky, principal analyst at Informa Telecoms & Media.

Bharti has a heritage in making network sharing and outsourcing deals work and will not be afraid of being aggressive on per minute pricing.
“Whilst it will, no doubt, be confident of controlling its costs, Airtel will aim to build up its brand equity characterised by reliability very quickly,” said Jotischky. “But reliability alone will not be enough – the newcomer will have to show itself to be innovative as well. In an already competitive marketplace, Bharti will not just be competing with other mobile operators for a share of wallet but with other brands in adjacent consumer goods sectors. This means that Bharti will be under pressure to offer services that are directly relevant to end-users and this will differ from market to market.”

For Zain, the deal represents a retrenchment of the company’s strategy as well as good value. The company may have succeeded in transforming its brand and building up an impressive customer base across sub-Saharan Africa, but it has struggled to operate profitability. “Perhaps it turned to the managed services model too late in the day and failed to leverage its supplier relationships so as to build in sufficient economies of scale – this is where Airtel will focus its efforts,” said Jotischky, adding that Zain may still look to enter new markets, but within North Africa and Middle East, which it sees as more lucrative in the longer term.

The move also has repercussions for the African region, with the likes of MTN, Orange, Vodafone and Millicom joined by a new and rather different pan-regional operator. Bharti has a heritage in making network sharing and outsourcing deals work and will not be afraid of being aggressive on per minute pricing. The company is also well versed in addressing the difficulties of serving a largely rural, high-churn, low-revenue market.

“It is quite likely that Bharti will take advantage of market consolidation by divesting some of its legacy assets and potentially looking to add new markets to its African portfolio,” said Jotischky. “One thing is sure – we can expect to see a transformation in Africa’s competitive and operational landscape as a result of this deal.”

Telecel Zimbabwe Suspends Board Chair Over Fraud

ZIMBABWE’S second largest mobile cellular company, Telecel, has suspended its acting chairperson, Jane Mutasa following serious allegations of fraud.

Mutasa and co-accused persons, among them Telecel regional manager for Harare Charles Mapurisa and Caroline Gwinyai were arrested on the 7th March on charges of defrauding the mobile cellular company of R5.5 million (US$750 000).

The acting chairperson was suspended last Friday following an extraordinary board meeting held in the capital-Harare.

“At the extraordinary board meeting of the Board of Telecel Zimbabwe, held on March 19, 2010, the directors resolved to suspend Mrs. Mutasa as director of the company to afford her an opportunity to defend herself against the charges that have been preferred against her by the state following allegations of fraud brought to the police by the company.

“The board has also abolished the position of acting chairperson that Mrs Mutasa carried,” reads a statement in possession of our reporters

The trio have since appeared in court last week before a Harare magistrate, Don Ndirowei and were remanded in custody.  Of the three, Gwinyai is believed to be Mutasa’s personal assistant at another company called Oxygon Investments, which is believed to be owned by Mutasa.

In an earlier court hearing, Mutasa and her co-accused persons were denied bail on the suspicion that they would abscond from trial when set free.

The state case claims that on July 15, 2009 former Telecel managing director, Mr Rex Chibesa, ordered all workers to stop selling lines and airtime using manual invoices. It is further alleged that the trio disregarded the memorandum from the managing director.

Between August 26 and October 21 2009, Mutasa is alleged to have instructed Omar to request stock from Telecel stores on behalf of her personal firm Oxygon Investments. It is further alleged that Omar then instructed his junior, Mapurisa, to write the manual invoice for 30,000 seed packs (lines) valued at US$300,000 and airtime cards worth US$450,000.

In recent months Telecel Zimbabwe has been the rocked by scandals.  In February, Telecel Zimbabwe Managing Director, Aimable Mpore’s work permit was withdrawn by the government of Zimbabwe. This prompted Telecel Globe CEO, Kai Uebach to express the hope that Mr. Mpore would be allowed to continue to serve Telecel Zimbabwe.

Telecel Globe, the African unit of Orascom Telecom, is Telecel Zimbabwe’s international partner.

Tanzania to Buy Back Zain's Stake in TTCL

A report in the Guardian newspaper says the government of Tanzania is preparing to acquire the remaining 35% it does not already own of national PTO Tanzania Telecommunications Company (TTCL), after the Zain group pulled out of the partnership.

The country’s Communications, Science and Technology Minister Peter Msolla is quoted as saying that negotiations are underway to finalise a deal to make TTCL wholly government owned. It is understood that Zain has agreed to sell its shares in order to improve the telco’s efficiency.

Nigeria Teledensity Just Under 50% - Study

Although Nigeria is known today as the largest mobile market on the African continent, it still has a mobile penetration level of less than 50%, suggesting that there is ample room for market expansion, this according to a recent study conducted by Canadian research firm Technology Strategies International, in partnership with BroadGroup TMT Ventures. The report, titled “Investment Opportunities in the ICT Sector in Nigeria: 2010”, also suggests that there is massive opportunity to improve fixed line and internet penetration in the country.

“One of the things fuelling the growth in the Nigerian ICT sector is the imminent illumination of two undersea cables, which will increase international bandwidth dramatically. The improvement in international connectivity will have a major impact on business in Nigeria”, said Christie Christelis, President of Technology Strategies International.

The study revealed that demand for mobile services is still on the increase, with Nigerian operators experiencing declining ARPUs levels, as the subscriber base broadens to include poorer segments. Companies such as MTN Nigeria have shown that, even at ARPU levels of $12 and declining, the business is still capable of making superior margins, added Christelis. He argued that the recent political crisis surrounding President Y’Ardua’s ill-health, and the instatement of Vice President Goodluck Jonathan as acting President, is a temporary setback for the country, but investors, although considerate at the moment, should continue investing in Nigerian ICT companies.

Among other setbacks, the sensitivity of the economy to oil price fluctuations, which could result in volatile foreign exchange rates, is a major concern for investors- as well as regionalism and corruption. Furthermore, Christelis points out the government’s Vision 2020 initiative – including the promotion of indigenous electronics manufacturing – and the capitalization of the infrastructure sharing venture, Helios Towers, as creating an environment conductive to high growth.

The 53 pages report expands on the reach of undersea cables, building out mobile infrastructure, turning investments into fixed wireless infrastructure into sustainable businesses, expanding the retail network for mobile, fixed wireless and internet services, and in electronics manufacturing.

Madagascar Connects To EASSy

Madagascar has been connected to the Eastern Africa Submarine Cable System (EASSy), AfricaNews.com reports. Fixed line incumbent Telecom Malagasy (Telma) has announced that it has already put in place a national backbone that will allow it to connect its subscribers to the cable, and it is expected that the arrival of the link will allow for the development of outsourcing activities, such as call centres. EASSy will supposedly enable the transfer of data at speeds 40 times faster than dial-up connections, and 27 operators from 22 countries across Africa’s eastern coast have invested approximately USD260 million in the deployment of the cable so far.

The arrival of the EASSy connection is the second significant cable landing reported in Madagascar in the last twelve months.  In June 2009 Madagascar’s largest mobile operator by subscribers, Orange Madagascar, announced the completion of its submarine cable project, LION, connecting the cable at Tamatave in the Toamasina region. Funded by Orange Madagascar, France Telecom and Mauritius Telecom, the 1,800km broadband cable links with the existing SAT3/WASC and SAFE cable and has a capacity of 1.3Tbps, and it also connects Madagascar with the islands of Reunion and Mauritius.

Tuesday, March 23, 2010

Zain Kenya Launches Community Payphone

­Zain Kenya has launched a community payphone initiative to provide self-help groups all over the country with payphone handsets. The initiative is aimed at empowering women and the youth by giving them an opportunity to trade with Zain products and services through provision of payphone handsets and start up capital of KES1,000 in each handset.

Over 600 payphones will be distributed country wide in partnership with Global Text Africa an organisation that has a strong network with the organized women and youth groups because of their regular interactions with micro finance institutions and NGOs.

Zain's Kenya Corporate Communications Director Michael Okwiri said: "Our main aim is to transforming the lives of our customers by providing quality service but at the same time we would like to play a role in improving their economic lives. We are positioning women as the entry point for the empowerment of the family. But we realize that, apart from communication, women have other needs that must be addressed for them to lead better lives"

Zain is also looking into partnerships with micro finance organisations will involve capacity building in women entrepreneurs in order to equip them with knowledge that will help them in identifying their current strengths and potential. The partnerships are expected to not only expand Zain's customer base but also reach the un-banked populace by providing them with Zain's mobile banking service, Zap.

MTN Zambia in USD 25 Million Expansion Drive

Zambian mobile network operator MTN Zambia has revealed it has set aside USD25 million for upgrade and expansion projects in 2010, according to the Times of Zambia.

A bulk of that investment will go towards expanding the cellco’s network to those districts that it does not yet cover, and MTN CEO Farhad Khan noted that work was already underway in seven such regions: Shang’ombo in Western Province; Chiengi, Chilubi and Milengi in Luapula; Chama in Eastern Province; and Chavuma and Kasempa in North Western Province.

Commenting on the expansion plans Khan said: ‘We will be expanding our network coverage this year and we target completion for August to completely cover the whole of Zambia.’ In addition, MTN Zambia has said it expects to boost its subscriber base to 1.5 million by December 2010; the cellco had 1.17 million mobile voice customers at end-2009.

Ethiopia set To Liberalise Telecoms Market

­The telecommunications market in Ethiopia is on the verge of massive growth, leading to a wide range of investment opportunities in telecommunications and downstream information and communications technology (ICT) segments, according to a new study published by Technology Strategies International in partnership with BroadGroup TMT Ventures. The report predicts that by 2011 the state-owned incumbent, the Ethiopian Telecommunications Corporation (ETC) will have a privatisation timetable in place, and that liberalisation of the mobile market will take place shortly after that.

"The Ethiopian Government recognizes that the country is being left behind in terms of digital inclusion, and urgently needs to address this if it wants to reap the benefits that other African countries have demonstrated from embracing ICTs," notes Christie Christelis, President of Technology Strategies International. "It may also become an important political issue in the next elections."

While the Ethiopian Government is on record saying that it will not hasten the liberalization process, and will not succumb to pressure from the international community to liberalize its banking and telecommunications sectors in order to accede to the WTO, Christelis believes that there is neither any reason for, nor any benefit from delaying the process further.

"Liberalization of the telecommunications environment will create a raft of ICT investment opportunities in Ethiopia," Christelis says. "The Chinese have already recognized the potential of Ethiopia and are building an electronics manufacturing facility to address the high growth expected in demand for handsets and accessories. They are also providing supplier financing in certain telecommunications investments in order to address the shortage of domestic capital."

The report predicts that over the next five years the number of mobile subscribers in Ethiopia will grow at an annual rate of 43% (CAGR), to reach almost 20 million subscribers by 2014.

Christelis added that Ethiopia will provide a range of excellent investment opportunities for foreign investors interested in the ICT sector, but warns that the window will not be open indefinitely. He predicts that the next four years will be critical in shaping the Ethiopian ICT sector's future and will provide high return opportunities for foreign investors that have the risk tolerance, and ability, to capitalize on the coming surge in ICT-related markets.

Monday, March 22, 2010

Bharti Raises USD8.3Billion For Zain Stake

India's Bharti Airtel has announced that it has raised funding totaling USD8.3 billion for its proposed acquisition of the African assets of Kuwaiti telecoms group Zain, according to Bloomberg Business Week.
Bharti will receive USD7.5 billion via loans from a group of banks led by Standard Chartered and Barclays, and the development comes hot on the heels of reports that Bharti's board had approved the planned purchase earlier this week. Exclusive negotiations between Zain and Bharti are scheduled to conclude by 25 March.

Court Reinstates 3G Licencing In Nigeria

A Federal High Court in Abuja has voided the cancellation of the licensing of WiMAX spectrum in the 2.3GHz frequency band by Minister of Information and Communications, Dora Akunyili, in May 2009. The cancellation was reversed on the grounds that Akunyili's decision was in excess of her powers, making such action null and void. The court also ordered the Nigerian Communications Commission (NCC) to immediately release a licence to Mobitel, which emerged as one of the three winners for the four slots in the 2.3GHz band, after each paid the required NGN1.368 billion (USD9.33 million).

Akunyili issued a directive for the cancellation of the licensing round in May 2009, after the process led to a number of complaints from operators faulting the NCC on how it was conducted, especially the one-week timeframe given to pay the necessary fees. The other two winners of the licensing round were Spectranet and fixed-wireless operator Multilinks, although only Mobitel filed a complaint with the Federal High Court in August 2009, stating that as it fulfilled all the conditions for the acquisition of a licence, it should have received the concession.

SA Delays Number Portability To Test Systems

The second and final stage of the introduction of fixed line number portability, which will allow individual Telkom customers to switch networks without losing their numbers, has been delayed by about five weeks. The first phase of fixed line number portability, also known as geographic number portability (GNP), kicked off in May 2009; the second, more important phase, which allows individual numbers to be ported, was meant to begin this week. But a well-placed industry source says implementation has been delayed until 26 April to accommodate final testing of IT systems, among other things.

The Number Portability Company, which already handles number porting for the mobile operators, will manage individual GNP on behalf of the operators. Vodacom, MTN and Cell C have agreed to dilute their shareholding in the company to allow Telkom and Neotel to become shareholders, too. It is understood the deal has already been agreed to by the mobile operators and is now awaiting signature by Telkom and Neotel before full implementation can begin. The Number Portability Company has implemented the necessary systems and is understood to be ready to begin porting fixed line numbers.

Angola And Cuba Sign Telecoms Pact

The governments of Angola and Cuba have signed two technical and scientific agreements that formalise cooperation between the countries in the telecoms sector, reports Angolan news agency ANGOP. The documents were signed by the Ministries of Telecommunication and Information Technology, and of Industry, Mines and Geology of Angola, and the Information and Communication Ministry of Cuba.

According to the Computer Science and Communication vice minister of Cuba, Arufe Rodriguez, the agreements strengthen the cooperation between the sectors of both countries, following talks held when the Angolan minister of telecoms and IT, Carvalho da Rocha, paid a visit to Cuba.

Friday, March 19, 2010

MTN Signs Deal With Manchester United

Following deals with Telekom Malaysia  and Turkish Airlines in March and January respectively, Manchester United has announced a new sponsorship deal with the South African mobile phone operator MTN.

The commercial package is understood to run until the end of 2013.

Following deals with Telekom Malaysia and Turkish Airlines in March and January respectively, Manchester United has announced a new sponsorship deal with the South African mobile phone operator MTN.

MTN claims to be Africa's largest pure-play mobile phone operator with 116 million subscribers across 21 countries.

MUFC also has other related commercial arrangements with a variety of overseas-owned companies including India’s Bharti Airtel and Saudi Telecom Company.

David Gill, the club’s chief executive, said the deal with MTN is a “Very important step in the club’s plan to get closer to its family of fans based all over the world.”

Last year the club that it had signed a four-year sponsorship deal with America's Aon Corp, which was valued £80m. The new deal sees Aon takes over from AIG for the 2010-11 season.

Ethiopia Signs Up for SEACOM

Ethiopian fixed line incumbent, Ethiopian Telecommunications Corporation (ETC), has inked a deal with SEACOM for an international backhaul link via Djibouti, Computerworld reports. As a result of the deal ETC expects to lower the cost of bandwidth, and subsequently the cost to consumers for telecoms services. Commenting on the development, Amare Amsalu, ETC’s CEO, said: ‘SEACOM is ideally suited to provide international connectivity that will complement ETC's extensive national initiative to link the country's businesses and end-users with fibre broadband connectivity,’ adding, ‘The availability of high-quality broadband at lower prices will accelerate economic development and educational initiatives that will enhance lives and will also establish Ethiopia as an important commercial centre for Africa and as a regional transit point for other service providers.’

Under the terms of the deal it is understood that ETC will connect its domestic network to an undersea cable system that has been extended to the shores of the Red Sea. SEACOM has partnered with SEA-ME-WE 3, which operates a cable from South East Asia to Europe; TEAM, which has a Kenya to Dubai link; and the Eastern Africa Submarine Cable System (EASSy), which has landing points in six countries. Currently ETC provides its voice and data services via expensive satellite connectivity, operated by Hughes International, although it does also have a low capacity bandwidth connection via Port Sudan.

The agreement complements the ongoing Next Generation Network (NGN) project being undertaken by ETC, which aims to enhance and improve the country’s existing telecoms infrastructure nationwide. The USD1.5 billion project encompasses work on both fixed line and wireless networks, as well as the national fibre-optic backbone.

Zain Introduces Zap In Ghana

Zain Communications Ghana, part of the Kuwaiti-based Zain Group, has launched its mobile commerce service 'Zap' in Ghana, the firm said in a press release. The new service will enable Ghanaians to pay for goods and services via their mobile phones, and conduct banking services regardless of the type of handset they use.

The parent company said Zain Ghana is the seventh Zain mobile operation to launch 'Zap' following the successful implementation of the service in Kenya, Malawi, Niger, Sierra Leone, Tanzania and Uganda. Zap allows Zain customers to: pay bills and pay for goods and services; and receive and send money to friends and family; top up airtime accounts. In the coming weeks Zap will be expanded to include the sending and receiving of money to bank accounts, cash withdrawals and bank account management.

Zain launched its 3.5G network in Ghana in December 2008, claiming to have invested more than USD420 million in the rapid rollout of high speed services - sub-Saharan Africa's first such network outside South Africa. The cellco says it began signing up customers to the new service a month before the network went live, but has not disclosed actual subscriber figures.

The company has come a long way since 14 December 2007 when the government of Ghana finally completed the agreement to allow Netherlands-based Celtel International, then the holding group of Kuwaiti telecoms group Zain (formerly MTC Group's) African interests, to take control of the second national operator (SNO) WESTEL, which had received a licence to operate GSM-based mobile services in November 2006.

Tanzanian Phone Users Now 17.6 Million

Data just released by the Tanzania Communications Regulatory Authority (TCRA) shows that the country was home to a total of 17.642 million fixed and mobile subscriptions at the end of 2009, up from 13.130 million a year earlier, a combined teledensity of 43% (32%, 2008). Of the total subscriptions recorded at end-2009 17.469 million were cellular connections to one of the country’s leading mobile operators.

Market leader Vodacom attracted 1.475 million new users last year for a total of 6.883 million, while second-placed Zain (Celtel) signed up a net 1.048 million new users in the period for a total of 4.910 million. Zain, however, failed to reach its own stated goal of six million customers by the end of last year.

Third place operator Tigo boosted its base to 4.178 million by the end of 2009, and Zantel Mobile — once the nation's fastest growing cellco — added roughly 300,000 net new customers during the period for a total of 1.378 million. Trailing far behind the big four, the mobile arm of fixed line operator TTCL added just 10,000 subscribers for a total of 115,681, and Benson Informatics Limited (BOL), which lost 300 subscribers in 2008, had 3,101 data-only subscribers, up 101 since the start of the year.

In the fixed line segment, TCRA reported 172,922 fixed lines in service as at 31 December 2009, up from 123,809 at the start of the year, but only marginally higher than the 163,269 counted at 31 December 2007. National PSTN operator Tanzania Telecommunications Company Ltd (TTCL) claimed the lion's share with 157,321 lines at end-2009 (its December 2008 figure was 116,265 after it disconnected a number of active lines), with Zanzibar Telecommunications' (Zantel's) fixed line division taking the remainder.

Eassy To reach Kemya by 31st March

According to a report by Reuters, citing Kenyan MP Samuel Poghisio, the government expects the Eastern African Submarine Cable System (EASSy) to land by 21 March. EASSy follows two other cable systems which have landed in Kenya over the last twelve months, SEACOM and TEAMS, and will further boost bandwidth availability and connectivity across the region.

Poghisio said: ‘By 21 March, we should have the cable fully landed here. It has been a long wait so Kenya is obviously excited to be hosting and that is additional capacity for our computers, for media, for development. The challenge is still the uptake of this capacity that is coming to the east African coast.’

Zimbabwe Issues deadline on SIM Registration

The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) has issued the country’s three mobile network operators with an ultimatum to register the personal details of all pre-paid SIM card users by 10 August 2010.

State-backed newspaper The Herald quotes POTRAZ’s director-general Charles Sibanda as saying that the measures were being introduced for security reasons. He added that a penalty schedule would apply to companies that failed to meet the deadline. Econet Wireless Zimbabwe leads the market with approximately three million subscribers followed by Orascom Telecom-owned Telecel with around 650,000 customers and government-owned NetOne with no more than 500,000 subscribers. The vast majority of users are pre-paid.

In a separate announcement, POTRAZ has directed the three mobile operators to make per-second voice call billing available for all subscribers. Per-minute charging remains common in the country at present.

Thursday, March 18, 2010

Senegal Arrest Former Head of Regulator Over Corruption

The authorities in Senegal have arrested the former head of the national telecoms watchdog, Daniel Goumala Seck, on suspicion that he stole funds from the award of a telecoms operating licence to Sudan’s Sudatel, Reuters reports Seck’s legal representative as saying.

The one-time boss of the Agence de Regulation des Telecommunications et des Postes(ARTP) is accused of having siphoned off 2% of the USD200 million received in 2007 for himself and other unnamed ARTP officials, rather than use the funding to expand the watchdog’s operations.

Seck has yet to be charged and no word is given on whether or not it will jeopardise Sudatel’s position at all. The newcomer launched Senegal’s third mobile network last year but has so far failed to make any inroads in a market dominated by France Telecom-backed Orange Senegal with 4.61 million users, or 67% of the sector, at end-2009. Tigo Senegal, a unit of Millicom International Cellular, had 2.09 million users at the same date while Sudatel’s Expresso operation had 203,067.

Orascom Makes USD46.4 Million In Last Quarter

Egyptian telecoms group Orascom Telecom has posted a net loss of USD46.4 million for the three months ended 31 December 2009, compared to a profit of USD180.9 million in the same quarter a year earlier, with the company citing civil disturbances in Algeria as one of the main reasons behind the decline. Orascom claims that its Algerian subsidiary Djezzy was significantly affected by rioting that followed a World Cup qualifier between Algeria and Egypt; according to the company, as a result of the violence it lost approximately USD55 million as a result of lower revenues, stock damage and tax provision, and a further USD41 million related to property damage.

One other notable financial outlay in the last fiscal quarter of 2009 relating to Djezzy was the USD110 million that Orascom paid in order to allow it to appeal an Algerian tax bill, which claimed the company owes USD597 million for the period 2005-2007; the Egyptian company has argued that it was tax exempt during the dates in question. The appeals process is expected to last for at least another twelve months.

Orascom reported consolidated group revenue for the final fiscal quarter of the year of USD1.296 billion, a decline of 0.7% year-on-year, with Djezzy accounting for 34.5% of the total, or USD447.5 million. Revenue from the Algerian unit also fell compared to the previous year, down 12.1% against the USD508.9 million it generated in the last three months of 2008. Consolidated group earnings before interest, tax, depreciation and amortisation (EBITDA) meanwhile fell 18.9% y-o-y to USD495.9 million in the three-month period.

As at end-December 2009 Orascom’s total subscriber base was 92.9 million, up 19% against the 78 million it had a year earlier. Mobilink, the company’s Pakistani subsidiary, remains the largest unit by subscribers, with 30.8 million at the end of the year, while Egyptian Company for Mobile Services (MobiNil) had 25.4 million.

Ghana Halts Issuing of New Licences

Ghana’s telecoms regulator the National Communications Authority (NCA) has made public that going forward, it will not issue any new operating licences to new players, the Business Guide reports.

NCA director general Bernard Forson made the announcement to parliament last week, during a Public Accounts Committee scrutiny into the regulator’s audited report for 2005. Explaining the decision, Forson said that the country’s limited spectrum resources had already been allocated to the country’s six incumbent mobile operators, and therefore there was no room for market entrants.

Although Glo Mobile has yet to launch its operation, the other licensed cellcos - MTN, Vodafone, Zain, Tigo and Kasapa – are said to be ‘competing fervently for customers’. Despite the apparent lockdown, the director general did say that there was room for new companies wishing to offer data-only services which, Forson noted, would help to drive up the proliferation of the internet in Ghana.

Egypts Bans Ban On Skype Calls

Egypt’s National Telecommunication Regulatory Authority (NTRA) has confirmed that the country has begun enforcing a ban on international calls made via mobile internet connections, Reuters reports.

The ban applies to all three of Egypt’s mobile network operators – Egyptian Company for Mobile Services (MobiNil), Vodafone Egypt and Etisalat Mirs – and is expected to provide a much-needed boost to the fixed line revenue of monopoly landline provider, state-owned Telecom Egypt (TE). Clarifying the situation, Amr Badawy, executive president of the NTRA, said: ‘The ban is on Skype on mobile internet, not on fixed, and this is due to the fact it is against the law since it bypasses the legal gateway.’

Under existing regulations all international calls must be routed via TE’s network. Despite mentioning Skype by name, it is understood that the regulator may extend the ban to other services, with Badawy noting: ‘We are targeting any illegal voice traffic on the mobile (internet). Any traffic outside the international gateway is against the law.’ It remains unclear however whether such a restriction will be extended to fixed line internet connections.

Tuesday, March 16, 2010

Nigeria Probes Nitel Bidders

Nigerian news source This Day reports that the National Council on Privatisation (NCP) has inaugurated a committee to undertake further due diligence on the bidders of ailing incumbent telco Nigerian Telecommunications (NITEL), rather than approve a USD2.5 billion bid submitted by preferred buyer New Generation Telecommunications last month. Acting president and NCP chairman, Goodluck Jonathon, has also tasked the seven-member panel with investigating allegations of financial impropriety surrounding the sale process. The committee has been given one week to submit its report to the NCP.

The government began seeking a buyer for a minimum 75% of NITEL and 100% of its mobile unit M-Tel in July 2009 after previous majority shareholder Transcorp divested its stake earlier in the year. After much delay, financial bids opened on 16 February 2010, but only six of the 14 pre-qualified consortia met the 5 February deadline for the submission of technical and financial proposals: Brymedia; AF21/Spectrum consortium; MTN Nigeria; Globacom Nigeria; Omen International; and New Generation Telecommunications. After announcing New Generation as the preferred buyer, the Bureau of Public Enterprises (BPE) revealed that the company was backed by China Unicom, a claim that was quickly denied by the Chinese company, which insisted that its involvement only extended to an interest in offering technical and managerial support.

Three Remain for Telcos Zamtel Bid

Of the four companies left in the running to acquire a stake in Zambian fixed line incumbent Zambia Telecommunications Company (Zamtel) only three have submitted final binding bids, with Indian state-owned telco Bharat Sanchar Nigam Ltd (BSNL) dropping out of the process after conducting due diligence.

According to Reuters, the withdrawal of BSNL leaves Libya’s LAP Green Networks, Unitel of Angola and Russian telecoms investment firm Altimo chasing the up to 75% stake that the Zambian government plans to offer in the operator.

Commenting on the development, Henry Sakala, the privatisation manager at the Zambia Development Agency (ZDA), said: ‘These bids will be subjected to an evaluation by the ZDA and after the evaluation they will be presented to the ZDA board who are going to make a decision as to which ones to shortlist for negotiations.’ In addition Sakala noted that the ZDA board would appoint an independent team to undertake the negotiations with the successful bidder(s).

Dispute Over Telecel Zim Stake

Mobile operator Telecel Zimbabwe, a subsidiary of Egyptian group Orascom Telecom, is weighing up options for the overdue divestment of an 11% stake to local shareholders, which it said last month it is hoping to carry out soon, the Zimbabwe Independent reports.

The newspaper also says that local investors are in dispute over rights to the stake, part of the parent company’s 60% holding that it must reduce to comply with government policy restricting overseas companies from majority-owning telecoms companies, as well as empowerment policy compelling foreigners to sell 51% stakes to black-owned entities. There have been delays in implementing these regulations though, and in the case of Telecel there have been problems deciding which empowerment group should receive shares.

Telecel Zimbabwe is owned by Telecel Globe (60%, formerly Telecel International), itself owned by Orascom Telecom, and the local Empowerment Corporation (40%), itself comprising Kestrel (23%), IEG (18%), Indigenous Business Women's Organisation (17%), National Miners' Association (14%), Zimbabwe Farmers' Union (14%) and Magamba eChimurenga (14%). The Empowerment Consortium was given pre-emptive rights to acquire an 11% stake from Telecel International by the government.

However, James Makamba and Jane Mutasa, the respective heads of Kestrel and Indigenous Business Women's Organisation, have been in dispute over the eventual recipient of the shares. The Independent says that Mutasa, currently in custody for allegedly defrauding Telecel, and 'fugitive' businessman Makamba both continue to claim rights to the 11%. Sources are quoted as saying that although Telecel allegedly prefers the idea of selling to Makamba, he left the country in August 2005 in the wake of externalisation charges, making it unlikely that he could gain regulatory approval for the transaction.

Meanwhile, Mutasa reportedly clashed with executives from the parent company earlier this year, but claims pre-emptive rights over the shares. Telecel is also considering a share option scheme to solve the issue, therefore placing the shares in the hands of a neutral party, the paper’s unnamed sources said.

NetOne Expands Capacity, Targets 5 Million By May 2010

Zimbabwean state-owned mobile operator NetOne is carrying out a project to expand its network capacity to five million subscribers, and hopes to more than triple its active customer base to over 1.5 million by end-May 2010.

Government mouthpiece The Herald quotes managing director Reward Kangai as saying that NetOne had around 1.2 million subscriber capacity and half a million subscribers before commencing expansion work. ‘Most of the base stations being installed in this expansion drive are solar energy-powered and this reduces service disruptions arising from erratic power supplies. Switching capacity has also been greatly increased to accommodate five million subscribers,’ said Mr Kangai. He added that the pre-paid platform was being upgraded to accommodate three million subscribers from a previous limit of one million, whilst the SMS message capacity was being near-doubled from 84 SMS per second to 154.

Earlier this month the operator announced its new subscriber take-up target to a parliamentary committee after getting new funding cleared to expand the network. NetOne, the country’s smallest cellco by users, is in negotiations with South African giant MTN Group over a possible strategic partnership, which it is hoped could result in MTN acquiring a minority stake in the Zimbabwean operator and injecting up to USD600 million in fresh capital.

The Herald says that MTN and NetOne late last year signed a memorandum of non-disclosure on the ongoing negotiations, forbidding both parties from disclosing information on the potential deal to third parties without the consent of the other.

Friday, March 12, 2010

MTN Revenues Up 9.2% As Profits Fall

South African mobile group MTN has posted net profit of ZAR14.65 billion (USD1.97 billion) for the full year ended 31 December 2009, down from ZAR15.32 billion a year earlier. CEO Phuthuma Nhleko said: ‘Movements in exchange rates in the year, mainly in the South African rand and Nigerian naira, had a substantially negative impact on the group's financial results.’

Meanwhile group revenues jumped 9.2% year-on-year as sales earned the company over ZAR111.95 billion in the twelve-month period, compared to ZAR102.53 billion in 2008.

Earnings before interest, tax, depreciation and amortisation (EBITDA) climbed form ZAR43.16 billion in the year ended 31 December 2008 to ZAR46.06 billion a year later. The company ended the year with 116 million mobile customers across its footprint, up from 90.65 million at the end of 2008.

The company expects growth to continue into 2010, forecasting 20 million net new additions by year-end, with its Nigerian and Iranian operations driving growth over the twelve month period, with net additions of six million and five million subscribers respectively.

Egypt Again Extends Deadline For Tripple Play Licence

Egypt’s National Telecom Regulatory Authority (NTRA) has once again extended the bidding deadline for two geographically-restricted triple-play concessions, Reuters reports. Having announced in December last year that the last date for bids had been pushed back from January 2010 to March, the regulator has now revealed that bids will now not be due until 15 April, after interested bidders once again claimed that they needed more time to formulate offers. Commenting on the latest delay to the process, Amr Badawi, head of the NTRA, said: ‘There was a request (to delay) by at least five of the prospective bidders’ who sought more time to prepare bids.’

In September 2009 the NTRA said it expected to generate investment of up to USD1 billion over a five-year period when it revealed it would offer the two concessions allowing the sale of fixed line voice, high speed broadband and pay-TV services in upscale suburbs outside Cairo which contain between 50 and 5,000 housing units. However, the restrictive nature of the licences appears to have put some potential bidders off, and while Badawi noted that at least 18 companies had purchased bid documents, the regulator has yet to receive a single bid.

Zain Launches New Tariff Plan In uganda

Zain has launched Flexxy, a new tariff platform that offers discounts up to 99% across all networks.“It gives customers real time discounts as they make calls, especially when the network has less traffic,” said Levi Nyakundi, the consumer marketing manager, at the launch on Thursday at Zain House in Kampala.

The discount rates also vary according to the geographical location of the caller and the time of call which determines the size of the traffic. “This new tariff is about taking advantage of the opportunities given to you. It is yet another way for us to make things easier and that much more interesting for our customers as they take advantage of all the different discounts that we are making available to them”, said Caesar Mloka, Zain’s Marketing Director.

The Flexxy tariff plan re-launches the tariff wars that had been the centre stage of competition in the telecommunication industry in Uganda a few years ago, until innovations like mobile money emerged in 2009.  MTN, for instance, has a related tariff structure called MTN Zone with high discounts for MTN to MTN calls.

Along side the new tariff plan, five Zain clients will each win sh100m, every week for eight weeks. Every customer that joins Zain’s Flexxy wins two entries into the weekly draw.

Through live TV draws on both NTV and UBC, five lucky winners will each win Shs 20 million every Monday. In the final week, one lucky customer will win Shs 100 million.

Mobinil Sets Deadline For LINKdotNET Acquisition

Egyptian Company for Mobile Services (MobiNil), Egypt’s largest mobile network operator by subscribers, has revealed that it has set a deadline by which it aims to complete the acquisition of broadband provider LINKdotNET (Egypt), Reuters is reporting.

MobiNil, which is currently at the centre of an ownership dispute between France Telecom and Egyptian telecoms group Orascom Telecom, has said that it aims to finalise the acquisition of LINKdotNET from Orascom within a month, with MobiNil chairman Alex Shalaby noting: ‘We have set an internal target, within the board, that we would like to see this completed and concluded within 30 days, within a month from the board meeting yesterday [9 March].’ The development follows reports in December 2009 that saw Orascom announce it had suspended sale talks until the MobiNil ownership dispute.  Earlier this week it was reported that an Egyptian court had delayed the next ruling on the matter until 27 March.

Tuesday, March 9, 2010

Telkom Kenya To Focus More On Broadband

Telkom Kenya has announced that it will shift its strategic focus in 2010 as it attempts to recover following a net loss of KES10 billion (USD124.6 million) in 2009, reports Business Daily.  Telkom Kenya generated revenues of KES11 billion but turned the net loss as higher levels of competition saw industry profit levels plummet as operators dropped their prices to gain market share.

Telkom Kenya CEO, Mickael Ghossein, said the company had encountered severe conditions in the last trading year that had affected its ability to generate profits. He added: ‘We are now focusing on providing quality services, innovating and providing value for money. Our grand plan is to move the market towards true broadband connectivity, offering speeds of up to 8Mbps.’

MTN Ghana Tests Its UMTS Netwok, A First In Africa

MTN Ghana and Ericsson of Sweden has reportedly carried out a successful trial of UMTS mobile services in the 900MHz band – claiming a first for the African continent. The pair say they now intend to extend coverage of the cellco’s mobile broadband network up to 200km in suburban, rural and offshore areas to complement its existing UMTS 2100MHz network which is used principally in urban areas for improved service coverage.

Under the deal, Ericsson will assume responsibility for network access, transport and transmission of 3G UMTS in the 900MHz band, with rollout beginning in Q2 2010. MTN Ghana has a subscriber base of more than eight million, and its network covers over 80% of the local population, including ten regional capitals as well as many rural and remote sites.

Egypts Considers Selling Off It's Stake In Telecom Egypt

The Egyptian government is believed to be considering the sale of a portion of its 80% stake in fixed line incumbent Telecom Egypt (TE), Reuters reports. A final decision has yet to be reached on such a divestment, but commenting on the development, Tarek Kamel, Egypt’s communications minister, said: ‘When I was asked a question on whether it was possible to put an additional stake from Telecom Egypt on the stock exchange in the future, my response was yes, dependent on ongoing studies with experts and consultancies.’ No timeframe for a final decision on a stake sale has been suggested, and Mr Kamel also noted that any such action would require approval by the cabinet. The government holds an 80% stake in TE, having sold a 20% tranche in December 2005.

Alongside the revelation about the possible stake sale, Mr Kamel also announced that the state could consider offering a fourth mobile licence, noting: ‘It is a possibilty in the future but it would depend on further studies on market dynamics and the added value of such an act.’ TE managing director Tarekt Tantawy subsequently told local newspaper Al-Alam Al-Youm that his telco would look to bid were such a concession put up for grabs.

“You Sold Me An Empty Box”, France Telecom Tells Kenya Government

France Telecom has kicked up a storm with a claim that it is unable to trace some assets that were on the books of the former parastatal at the time it was put on sale.

“You sold to me an empty box,” is the claim by the French state-owned company – one of Europe’s leading telecommunications providers, which beat seven international bidders in 2007 to acquire a controlling stake in Telkom Kenya. The company now wants the government to compensate it to the tune of a massive Sh28.875 billion – an amount almost equal to what it paid for its 51 per cent share of Telkom Kenya.

As part of preparations for the sale of Telkom Kenya, all the information about the company, including assets and audited accounts for five years, was deposited in a data room to which all interested bidders were allowed access. Did unscrupulous individuals grab assets of Telkom Kenya between the time the data room was established and the time of the actual sale to France Telecom? Is the French company to blame for not having conducted a proper due diligence before signing on the dotted line?

These are the pertinent questions at the heart of a dispute that has cast doubts on the integrity of one of the largest privatisation transactions in the history of Kenya, in which the government pocketed a whopping Sh29.25 billion.

Both sides are still tight-lipped. A party who was involved in the transaction for France Telecom revealed that actual negotiations between the government and the French company were yet to begin. He pointed out that the view from his side was that the matter should be kept away from the media attention for now.

An e-mail with questions sent to France Telecom’s Michel Barre, who was said to be visiting Nairobi to engage the government on the dispute, went unanswered. Neither did the government side want to release details of the dispute.

But sources confirmed to the Nation that the government had engaged a Nairobi law firm to lead the negotiations with France Telecom. Negotiations begin in earnest on March 21. Aside from assets that the French company claims have disappeared from Telkom Kenya’s books, it is also accusing the government of non-disclosure of material contracts at the time of the transaction.

The French claim that after taking over, they stumbled on supplier contracts with huge liabilities that had not been disclosed in the data room at the time. More questions: Did some people in Telkom Kenya rush to commit the company to opaquely procured supply contracts between the time the data room was opened and the time France Telecom took over?

The French have reportedly questioned the integrity and accuracy of Telkom Kenya’s audited accounts lodged in the data room at the time of the transaction. Further, France Telecom is accusing the government of non-disclosure of material information with respect to tax liabilities, uncollectable debts, suspense accounts and unreconciled bank accounts.

Technically, the claims by the French are based on what is referred to in legal terms as warranties – where a party is allowed to claim monies from the seller if it turns out later that all facts were not fully disclosed before the transaction was concluded.

- Daily Nation

Monday, March 8, 2010

Econet Persists In Holding Back Zain Deal

According to a report by Bloomberg, an ongoing legal dispute over the ownership of Zain Nigeria between the Kuwaiti group and Econet Wireless Holdings could delay the sale of Zain’s African operations to Indian firm Bharti Airtel.

Econet, which owns a 5% stake in Zain Nigeria, claims that its right of first refusal over the ownership of the cellco was breached in May 2006, when its Nigerian partners sold their shares to Zain, and recently applied for interim measures to prevent Zain from selling, transferring, disposing of, dealing with or otherwise encumbering the disputed stake until the matter is resolved.

Bharti Airtel entered a period of exclusive negotiations, lasting until 25 March 2010, with Zain over its African operations. It remains to be seen whether delays to the sale of Zain Nigeria, Zain’s largest African subsidiary with an estimated 15.22 million customers at year-end 2009, will threaten the timely conclusion of a deal between Bharti and Zain.

Burindi Carriers Team Up To Build Fibre Line

A number of Burundian telecoms operators have joined forces to build out a national fibre-optic backbone network in the small African country, aided by the World Bank. The so-called ‘Burundi Backbone Systems’ group, which includes incumbent PTO Onatel, mobile operator Leo (formerly U-Com), Africell (owned by V-Tel and Palestinian Paltel), Econet Burundi and domestic ISP CBI Net.

Balancing Act reports that Burundi Backbone Systems will oversee the development of a 1,200km backbone and several international fibre links connecting the country to its neighbours in the next 18 months. The World Bank is contributing money to the scheme which will provide coverage throughout Burundi with cables laid alongside road routes, with 26 different nodes.

Chamisa Losses Out In Zimbabawe Telecoms Dispute

A dispute over the jurisdiction of government ministers in Zimbabwe’s telecoms sector appears to have been abruptly ended by President Robert Mugabe, who on Thursday allocated the administration of the Posts and Telecommunications Act to the Ministry of Transport, Communications and Infrastructural Development, reports Zimbabwean state-backed newspaper The Herald.

According to Statutory Instrument 40 of 2010 published in the state’s Extraordinary Gazette on Thursday, Transport Minister Nicholas Goche will administer the Act – the main legislation governing the telecoms segment – alongside other laws. Furthermore, Statutory Instrument 62 of 2010, gazetted on the same day, said Nelson Chamisa, the Minister of Information Communication Technology, will not administer any Acts.

Chamisa, a prominent figure representing the Movement for Democratic Change (MDC) party which opposed Mugabe in national elections, is now left as ‘a mere implementer of directives’ according to other local newspaper reports. Goche is a high-profile politician from Mugabe’s Zanu-PF party, and is a close ally of the President.

The Transport Minister was also confirmed as being responsible for the District Development Fund Act, whilst another law, the Interception of Communications Act, is now being administered directly by the Office of the President and Cabinet as set forth in Statutory Instrument 49 of 2010.

Thursday, March 4, 2010

Telkom Confirms Bid For TelOne

Telkom South Africa has confirmed that it is in talks with Zimbabwe's state-owned incumbent fixed line operator TelOne with a view to forming a strategic partnership in which the South African national PTO would assume a management role at its Zimbabwean counterpart.

However, Charlotte Mokoena, CEO of Telkom’s Management Services department, told local press that contrary to some reports, Telkom is not bidding to buy a stake in TelOne. Previous announcements by Zimbabwe’s government have implied that Telkom was negotiating a stake purchase in the cash-strapped telco, alongside several other companies interested in partnering the PSTN operator or the country’s struggling state-run mobile operator NetOne.

The list of interested parties includes another South African company, cellular heavyweight MTN Group. Mokoena continued by saying that Telkom ‘is close to concluding an agreement, to provide management services, such as professional engineering and other functional services, to assist TelOne to prepare and build for the future.’

Algeria Denies It's Trying to Force Orascom Out

The Algerian government has denied that it is trying to force Egypt's Orascom Telecom Holding to leave the country and says the ongoing dispute with the company is solely over taxes. The company has been disputing a US$597 million tax demand that the government imposed on its local mobile network, Djezzy. The dispute covers the the tax years 2005, 2006 and 2007.

"All the government wants is that the company pays the taxes due," Finance Minister Karim Djoudi told reporters in Algiers. "We are not pressurizing Orascom to leave the country. They are willing to pay."

Relations between Algeria and Egypt have also been strained following football violence following a football match last November.

The finance minister's comments are "positive," Sally Gerges, a telecommunications analyst at Beltone Financial, a Cairo-based investment bank, told Bloomberg News. "It removes some uncertainty regarding the future of this operation and specifically regarding the reassessed taxes."

Pending appeal, Orascom Telecom is not required to pay the full amount of the tax demand. In order to file its appeal, however, Algerian law required the company to pay 20% of the taxes and penalties alleged to be owing, approximately US$120 million. The amount paid will be recoverable if the appeal is successful.

The parent company also has US$257 million of dividends from the Algerian subsidiary frozen until the tax dispute is resolved.

Vodafone Signs Deal With Libya's Al-Madar

 Vodafone says that it has signed a non-equity cooperation deal with Libyan state owned mobile network, Almadar Aljadid (Al-Madar) to offer Vodafone branded services in the North African country.

Under the terms of this agreement, Almadar Aljadid will have exclusive access to Vodafone's range of products, devices and services in Libya. In addition, Vodafone will be able to use Almadar Aljadid's network to offer its customers a range of services, which utilise 'home' network capabilities as well as extended coverage within Libya.

The partnership will also enable multinational companies located outside Libya and with local operations to meet their needs for unified communications, centralised customer care and Vodafone services using Almadar Aljadid network.

Commenting on the agreement, Colin MacDougall, Vodafone Partner Markets director for Africa and the Middle East, said: "We are delighted to partner with Almadar Aljadid in order to better serve our business customers' communications requirements as they look to grow their operations in Libya."

Malawi Threatens to Withdraw G-Mobiles Licence

South Africa's Beryl Telecoms has reportedly engaged Telkom SA to take over the management of the Malawi's delayed 3rd mobile network operator, G-Mobile. The operator itself is under threat of losing its license if it doesn't launch its network by the 12th April.

Beryl Capital and Telecoms was contracted last year to manage the roll out of its network, which was due to have been completed at the end of last year. When G-Mobile was awarded its license last April, it said that it was expected to invest US$40 million in the venture within the first five years of operations.

G-Mobile conceded that the new deadline is very tight, raising fears that the company could dissolve even before rolling out its services.

According to statistics from the Mobile World analysts, the country ended last year with just under 2.6 million customers, which represents a population penetration level of around 18%. The country has two active mobile networks, Zain and Telecom Networks Malawi.

Azur Gabon Extends Billing Contract With Redknee

Redknee, a provider of billing and charging software and solutions, has received a new contract for an extended implementation of its converged billing and airtime-selling solutions by Gabon’s newest mobile operator, USAN Gabon (Azur).

Redknee says its turnkey solutions deliver a functionally rich platform that extends beyond basic rating, charging and billing models, enabling operators to differentiate their service offerings and launch creative promotions and incentives to their customers. A key feature is Redknee's Airtime Reseller, which enables voucherless, pre-paid wireless airtime top-up.

Azur is a subsidiary of Bintel, which is registered in Dubai but headquartered in Bahrain, and has a focus on emerging markets, with subsidiaries in the Central African Republic, Somaliland, Gabon and The Republic of the Congo, and it also holds a majority stake in Swiss-based firm Telesonique.

Wednesday, March 3, 2010

MTN, Bharti, Zain Lead In Revenue Growth Worldwide

As part of its latest round of service provider benchmarking analysis, TeleGeography has found that 16 leading service providers have grown their revenues by an average of 45% over the last three years, equating to some 13% per annum. As could be expected, those achieving the highest growth have been focused on wireless markets in Africa, Latin America, the Middle East, India and China. Leading the growth charge are MTN, Bharti and Zain which have all more than doubled their revenues in the last three years. Despite being substantially larger companies than the top ranked three, America Movil, China Mobile and Vodafone have all recorded growth in the 45%-70% range. Of the companies covered in this research the only other to achieve similar growth is AT&T, which has achieved this via acquisition and reconsolidation of US service providers, rather than organic growth.

While it is no surprise that four of the bottom ranked five companies are incumbent operators from four of Western Europe’s largest markets, the level of their growth (or more accurately the lack of it) will surprise many: in a nutshell all five have stood still for three years. BT and NTT are locked into their highly competitive and low-growth home markets, and are also primarily dependent on wireline markets. Telefonica, Deutsche Telekom and France Telecom have all taken great strides in the past to build businesses beyond their home countries; collectively they now generate over 55% of their revenues from beyond their home markets. However, over the last three years the trio have been held back by tough competition and diminishing growth in the Western European region, and, in the case of Deutsche Telekom, difficulties growing its US operation. The results of their efforts in Latin America and Eastern Europe have not been sufficiently robust to generate substantial revenue growth for the consolidated groups.

So why does this matter? ‘Absolute scale remains an important metric, but growth often has a more direct impact on profitability and the strength of a business’ said TeleGeography’s John Dinsdale. ’The next five years will see the growth rate of telecoms markets drop to less than half of what has been experienced over the last five years. Those companies which are better equipped to meet and beat market growth rates will be more richly rewarded’ added Dinsdale.

TeleGeography’s service provider benchmarking research includes analysis of revenues, profitability, subscribers, ARPU, growth rates, geographic footprint, market share, competitive positioning and future growth prospects. It is published as part of TeleGeography’s GlobalComms Insight service which is a companion to the GlobalComms Database, a regularly updated online database of wireline, wireless and broadband competition. No other telecoms market research service rivals their collective geographic scope and depth of coverage.


MTN CEO Announces Retirement

Phuthuma Nhleko, group president and chief executive of African carrier MTN chose to kick this week off by announcing plans to depart after eight years at the helm.

Nhleko said Monday that he will not be renewing his long term contract which ends June 30, standing down as group president and CEO. Nhleko has, however, agreed with to continue in his role up to March 2011 to enable a transition to his as yet unnamed successor.

Nhleko did not give a detail reason for his decision, saying only that it is the “Right time to secure the next generation of leadership for the group - and the right time for me personally to start thinking about the next phase of my career.”

Cyril Ramaphosa, chairman of MTN, said the firm will “explore other options for an ongoing association between Phuthuma and the group post his service as president and CEO.”

The prospect of consolidation among African and Middle Eastern operators provided much fuel for the industry rumour mill in 2009, but long running talks between Bharti and MTN collapsed last year amid concerns on the part of the South African government that its national champion could fall into foreign hands.

Etisalat Plans To Have 4 Million Clients In Nigeria This Year

UAE-based telecoms operator Etisalat has said it plans to increase its current 2.6 million mobile subscriber base in Nigeria to four million this year, Nigerian newspaper Daily Trust reports. According to Etisalat Nigeria’s CEO, Steven Evans, the company plans to achieve this through the investment of around USD700 million aimed at expanding its wireless network, compared to the approximately USD800 million spent last year.

Etisalat will rent infrastructure from telecoms companies rather than spending the money on constructing new networks. Evans added that the global economic slowdown has affected the telecoms business in Nigeria, but Etisalat remains hopeful that the industry will pick up by 2011, by which time the company is expected to break even. In order to boost its customer base, Etisalat is targeting users of other network operators by focusing on high network quality, the provision of robust products, competitive prices and good customer service.

At present, Etisalat is operational in all of the country’s states and its network covers 40% of the population.