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%.

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.

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.

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.

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.

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.

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 E.tv 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.