Airtel Enters Rwanda Market

Indian telecoms group Bharti Airtel has announced it has secured a licence to provide 2G and 3G cellular services in Rwanda, The New Times reports. 

The company plans to invest over USD100 million over the next three years, including USD30 million for the purchase of the operating licence. 

It aims to bring ‘affordable services and innovative products’ to the market, and plans to expand its wireless broadband network to all major towns across the country.

 In June 2010 Bharti Airtel acquired the African assets of Kuwait’s Zain Group, in a deal valued at USD10.7 billion. The company took over Zain’s operations in 15 countries, including Malawi, Burkina Faso, Ghana, Kenya, Nigeria, Sierra Leone and Uganda.

Bharti will join two other mobile operators in the market: South Africa-based MTN Rwanda, which had a total of 2.794 million mobile subscribers at the end of June 2011; and Millicom Rwanda (Tigo), which is majority-owned by Luxembourg-based Millicom International Cellular and had a subscriber base of over 812,000 at the same date. A third operator, Rwandatel, had its mobile licence revoked in April 2011, after the company failed to meet licence obligations, such as coverage, quality of service and planned investment targets. Rwandatel is 80% owned by Libyan government investment vehicle LAP Green Networks, although telecoms regulator RURA said the decision to cancel its mobile licence had nothing to do with enforcing a United Nations (UN) resolution to impose sanctions on Libya, including the freezing of its assets, following unrest in the North African nation.

New 4G Rules Favour Safaricom Over Other Networks

The government has changed the telecommunication licensing rules in a way that promises to lower the cost of acquiring high-speed delivery platforms and give one operator control of the market.

The new rules that among other things requires those bidding for the 4G spectrum licence is hinged on the Public Private Partnerships (PPP) model and are aimed at avoiding the battle over the pricing that dogged the issuance of the 3G licences.

Tender rules that were published on Tuesday indicate that unlike in the past when the licence was awarded to each operator, the 4G will be controlled by a consortium of players who must have at least 20 per cent local ownership.

The requirement locks out Airtel and Essar's Yu, leaving Safaricom and Telkom Kenya in the race for the tender.

The two are the only holders of the Network Facilities Provider Tier 1 category (the technical reference to mobile phone operators' licence) and with a 20 per cent local shareholding.

The government, through Treasury, has 49 per cent stake in Telkom Kenya while Safaricom is owned 40 per cent by the UK's Vodafone, 35 per cent by the Government of Kenya and 25 per cent by the public through the Nairobi Stock Exchange.

Airtel Kenya has a five per cent local ownership, after businessman Naushad Merali - the sole local partner -- sold 15 per cent of his stake in the firm last year.

Essar's Yu is 100 per cent owned by India's Essar Communications, which bought the 20 per cent stake that local firms Capital Africa, CrossLink and Startnet held last year for an undisclosed sum.

Rene Meza, the Airtel managing director, questioned the transparency of the tendering process and promised that his firm will be seeking clarification, especially on the 20 per cent rule as Airtel intends to fully participate in the tendering process.

"We will seek clarification on the requirement of 20 per cent ownership. We believe it is sufficient that an operator is licensed," said Mr Meza. "Because there is no structure for the tender proposal, evaluation of the bids by the Ministry of Information may be subjective to the extent that undermines transparency and fairness."

4G refers to the fourth generation of wireless telecommunication technology with a larger capacity to deliver data and facilitate high end of market services such as video conferencing and gaming.

Kenya's telecom operators see ownership of the technology as critical to future revenue growth with the continued decline in earnings from the voice business.

Prospective bidders are also questioning the requirement that the government becomes part of the consortia that will be competing for the 4G licence while at the same time participate in evaluation of the tenders. [Read: State to withhold licence for 4G frequency rollout]

On Thursday, the government said it will not bend the 20 per cent local ownership rule, arguing that Yu and Airtel chose to sidestep the local shareholding requirement.

"The two don't meet the 20 per cent rule and do not have national infrastructure that can be upgraded to 4G," said Bitange Ndemo, the Information permanent secretary.

Dr Ndemo said the 20 per cent rule is a policy requirement that Airtel and Yu should make an effort to comply with.

People familiar with the policy position on the matter said the ultimate goal of the tendering is to open a window for the government to ride on operators with national coverage to reduce the cost and time of deploying the 4G network in readiness for use in e-voting in 2012.

"An individual firm will have to spend not less than $4 billion to roll out the infrastructure but the model we have proposed will cost an average of $100 million and take less time," said our source.

Telecoms sector ownership rules require foreign companies to have a 20 per cent local shareholding.

It, however, gives foreign investors three year grace period to look for suitable partners.

Econet Wirelesss International, which held the third mobile license was the first beneficiary of this rule that helped it survive a protracted court battle with its local partners, the Kenya National Federation of Farmers.

Econet ultimately sold its shares to Essar Communication, a subsidiary of India's Essar Global four years ago.

He acquired and immediately sold the Vivendi stake in 2004 at $250 million remaining with his 40 per cent.

Kuwait's MTC then bought Celtel out of 16 African countries in 2005 and three years later, Mr Merali sold half of his stake to Zain putting 80 per cent of the firm in foreign hands.

Last year, Mr Merali sought exemption and was allowed to sell an additional 15 per cent of his stake - a move that has now come back to Bharti Airtel, the current owners.

The tender specifications have also locked out infrastructure providers such as Kenya Data Networks, AccessKenya, Jamii and Wananchi Group who do not fall within the licence category specified on the tender notice.

Joshua Chepkwony, the chairman of the Telecommunication Network Operators said that while having an open access 4G network was positive, the manner in which the tender document has been structured shows that the government has a pre-determined candidate.

"There is need to call for a stakeholders meeting to explain the desired composition of the consortium because as it is the tender document locks out operators who are not in the tier 1 category but fall within the telecoms ecosystem," he said.

The LTE -- commonly known as 4G --offers subscribers access to mobile internet at much faster speeds, making it a cutting edge tool for companies offering their services on the medium.

The government says it will offer 4G license to a consortium of players that will implement and manage it to avert disputes encountered with the issuance of the 3G licences to the late entrants.

Safaricom paid $25 million for the 3G license fee, only for the government to lower the fee to $10 million for Airtel and Telkom Kenya or 60 per cent less than Safaricom.

Under the new model, the consortium members will be composed of government (the owner of the national spectrum), equipment suppliers such as Huawei, Nokia Siemens Networks, Alcatel Lucent and Ericsson who must team up with telecommunication firms such as Safaricom, Telkom Kenya for expertise and equipment needed for the rollout.

The move comes as mobile operators shift their focus to data, with competition in the voice segments getting stiff and revenue starting to decline with deep tariff cuts that have since August last year lowered the cost of voice calls by 50 per cent.

Airtel Uganda Increases Tariffs Amid Rising Inflation

Airtel yesterday became the second communications company in Uganda to up call tariffs with new rates starting Monday next week.

The increase has been occasioned by the higher costs of doing business in Uganda, according to Mr V.G. Somasekhar, the managing director of Airtel Uganda.

Customers will pay Shs4 per second, an increase from Shs3 per second or Shs240 per minute instead of Shs180 per minute.

The new rates will apply to all calls on the Airtel network and other networks, according to a statement from the company.

“The telecom business is trapped in a cycle of rising business costs, which is significantly threatening the level of service delivery in the industry,” Mr Somasekhar said yesterday. “The upward adjustment in tariffs will ensure the company continues to meet its operational costs and maintain its unequalled level of service delivery in the market.”

Airtel’s announcement came just a day after MTN Uganda doubled its calling tariffs from Shs2 per second to Shs4 per second, also citing the increasing cost of doing business.

The economy is struggling with the depreciating Shilling, the rising cost of fuel and persistent power blackouts.  This week, inflation hit a record 20% mark.

Airtel Could Launch 4G Earlier Than Planned

Bharti Airtel Ltd., a leading global telecommunications company with operations in 19 countries across Asia and Africa, may launch 4G technology for mobiles in India sooner than expected. 

Sources claim that Sanjay Kapoor, CEO, India and South Asia, Bharti Airtel, believes that the launch of 4G services in India will happen in close vicinity with the launch in other countries. 

4G is expected to take the mobile industry by storm, with every network operator eyeing it as a means of acquiring more customers and increasing their market share.

Airtel is a dominant player in the Indian telecom market with around 170 million subscribers. 

Reportedly Mr. Kapoor has mentioned the low penetration of 3G devices as an obstacle for mobile operators providing 3G services.  He further adds that the language of the content used in the country is not very conducive.

Uganda Moves To Stop Airtel, UTL Cut-off

The Ugandan government moved to stop Airtel Uganda from deactivating calls to the Uganda Telecom network over a UGX 10 billion dispute.

According to local paper the Daily Monitor, ICT Minister Ruhakana Rugunda said the government was talking to both sides in a bid to resolve the dispute.

Godfrey Mutabazi, the executive director of the Uganda Communications Commission, also confirmed that talks were underway to resolve the matter but it was unclear if an understanding had been reached.

Airtel had announced that its customers would no longer be able to make or receive calls to UTL numbers from 1 September. This followed the termination of the interconnect agreement between the two operators on 15 August, after UTL failed to pay up to UGX 10 billion in outstanding interconnect fees and legal fines to Airtel.

Joseph Kanyamunyu, Airtel's spokesman said the operator would not lift the ban on calls until UTL clears the debt.

Wananchi Launches Wi-Fi In Nairobi

Wananchi Group in collaboration with Google and Aptilo Networks announced the launch of the Wazi Wi-Fi service in Nairobi, Kenya. 

The network already delivers high-speed internet access at Nairobi's Junction Shopping Mall area. The service is free for the first ten minutes of use per day on each device. 

Users can then purchase a single day pass for KES 50 per device or a monthly pass for KES 500. Customers can pay for the service online using credit cards or via local mobile money services including M-Pesa, Airtel Money and PesaPal. Wazi Wi-Fi uses the Aptilo Service Management Platform for service management and policy control and is delivered via Aptilo Cloud Services, a hosted platform.

Wananchi said it's in talks with local businesses on expansion plans, and the company sees opportunities to use Wi-Fi technology for mobile data offloading and providing high-speed unmetered access away from home.

Airtel To Terminate UTL Calls

Airtel Uganda has announced that starting 5th September 2011 its subscribers will not be able to receive calls from or make calls to Uganda Telecom (UTL) lines.

In a statement published on Wednesday Airtel states that the decision follows the expiry on 15th August 2011 of the interconnection agreement between itself and UTL.

Earlier reports had indicated that UTL owes Airtel over 8 billion shillings in interconnection fees.

UTL has been battling a court case in which MTN Uganda is demanding over 20 billion Uganda shillings. Last week a court in Kampala ruled in favour of MTN but UTL has appealed against the decision .

69% of UTL is owned by the Libyan government through its investment vehicle, Libyan Africa Portfolio (LAP), with the remaining 31% owned by the Ugandan government.

UN sanctions in March required the freezing of Libya’s assets for the duration of its on-going civil war, but in order to prevent the loss of jobs, the Ugandan government took over complete control of the company.

Early this year Uganda’s Media Owners Association reportedly ceased any advertising for UTL, citing unpaid fees of 3 billion Uganda shillings.

Airtel Kenya Launches Quiz Cash Give Away

Airtel Kenya has launched a promotion that will see one customer win KES 100,000 daily for 90 days.

Under the name Airtel Cashmania, customers can answer questions and be entered into a daily draw for a chance to win the cash prize.

For every correct answer a customer sends, the customer will receive 20 chances or more. For every incorrect answer the customer will receive 10 chances.

To participate in the promotion customers need to send a SMS with their first name to the short code 888. Every SMS is charged at KES 25.

A similar competition was launched by Airtel Uganda last month dub be "Kyaba Too Good!

Airtel Connects Western Zambia

Mobile network operator Airtel Zambia has reportedly started rolling out infrastructure in the more remote parts of Zambia’s Western Province, as it looks to fend off competition and maintain its market share. 


Airtel Zambia managing director Fayaz King was quoted as saying that  contractors are already at work on extending the cellco’s coverage with a view to attracting increased numbers of rural subscribers. 


‘We are now going in areas like Mutomena, Lukena, Liuwa, Libonda Palace and Mishulundu in Western Zambia. Some of these areas can only be accessed by water. This is our commitment to addressing Zambia’s telecommunications needs,’ the executive noted.


 Further, Mr King said that the network expansion formed part of an initiative that his company had undertaken over the previous ten months aimed at bringing services to some of the country’s most rural regions. 


According to the report Airtel has connected 88 isolated rural areas and communities in Zambia as part of the project, in provinces including Luapula, Northern, North-Western, Eastern, Southern and Central as well as in some rural parts of the Copperbelt like Lufwanyama, Masaiti, and Mpongwe districts.

Libyan Owned Uganda Telecom in Finacial Crisis

THE financial sustainability of Uganda Telecom (utl) remains uncertain following several claims of unpaid dues in billions owed to the firm’s partners and service providers. 

Among the companies seeking payment is MTN, which for the second time this year, has sued utl claiming unpaid sh9.3b accrued from interconnection charges, indicating a further deepening rift and uncertainty in the telecom industry. 

According to sources, the Uganda Communications Commission (UCC) is also demanding about sh6b from utl over non remitted contributions to the rural communication development funds. 

All telecom operators are required to remit 1% of their gross revenue to the commission for the fund. 

Sources revealed that a fortnight ago, the Uganda Media Owners Association also suspended any form of advertising from utl because of about sh3b unpaid dues accruing from advertising. 

The association comprises major media houses, including Monitor Publications, Vision Group, NTV, WBS, UBC, Capital FM, Simba and Sanyu FM. 

Airtel Uganda public relations officer Joseph Kanyamunyu said utl also owes them about sh8b from “interconnect and related charges.” 

MTN is also demanding another sh744m in interests accrued from May 31, 2011. 

“The actions of the defendant amount to breach of the interconnection agreement between the plaintiff and the defendant,” read the suit. 

“They have continuously disputed figures, but in this case they signed and acknowledged the debt, but we are half way the year and they have still failed to pay,” said an MTN official. 

The MTN suit filed on June 15 says the interconnect fees are for the period from January 2010 to December 2010. 

But utl chief Donald Nyakairu said there was nothing new in the law suit. “The only difference is in the figures, they are just causing anxiety within the public,” said Nyakairu. The suit follows an earlier one, filed about three months ago, over MTN’s claims of unpaid sh20b in interconnection charges that the telecom giant says was accumulated over a three-year period. 

The interconnection fee is the amount an operator pays another for routing traffic through their networks. 

David Ogong, the UCC director of competition and corporate affairs, said they had been mediating over this issue and the two players agreed to keep their networks connected until June 26, 2011. “We are advising the Government that we could have a big problem in our hands, we have tried our best to see that utl pays,” said Ogong. 

The Libyan government owns about 69% of utl under its investment arm, Libya Africa Investment Portfolio. The Government owns the rest. But a few months ago, government took over full control of utl partly complying with UN sanctions against Libyan assets in the wake of the political turmoil in the North African state.

Bharti Makes Management Offer to Sweeten MTN Deal

In an attempt to seal the MTN deal Bharti Airtel is offering to retain the top management of MTN for at least three years, giving the option of an all-cash offer to minority holders of MTN, and more shares in itself for the same money, which would push up the cost of acquisition for Bharti, The Economic Times said today.

 

The report said Bharti Airtel is making a slew of last-minute concessions to sew up a deal with MTN, as it awaits a political push to take the planned tie-up past the hurdle of national pride in South Africa.

 

The deal would lead to MTN's chairman Cyril Ramaphosa, CEO Phuthuma Nhleko and forthcoming CFO Nazir Patel (current CFO RD Nisbet to leave the company next month) retaining their positions for at least three years which may pacify the South African government which is keen on retaining the company's national character.

 

The Indian company will also maintain the status quo of a 49% stake in MTN for at least five years. A Bharti spokesman declined to comment on the revised structure.

 

The report further explained that a delegation from the South African government led by Ismail Momoniat, a senior official in South African treasury, are meeting the Indian government officials on Tuesday to lobby for the deal. Sunil Mittal, chairman of Bharti may meet Prime Minister Manmohan Singh who is expected to talk to South African President Jacob Zuma during the G20 talks to facilitate the transaction.

 

The latest offer also gives MTN a 27% stake in Bharti Airtel, compared to 25% when the contours of the deal were first unveiled in May. MTN will also pay $2.9 billion in cash to Bharti. The deadline to conclude a deal is Sept 30.

 

MTN's minority shareholders will now have the option to take $13 billion in cash for a 36% stake in the company instead of the earlier proposed $7 billion in cash and $6 billion worth of Bharti Airtel shares.