Orascom Reports Losses of US$170 Million

Egypt’s Orascom Telecom has posted a net loss of USD169.53 million in the last three months of 2010 on the back of both the depreciation of the local currency against the US dollar and increased pressure in foreign markets.

The company noted that as its primary accounts are held in Egyptian pounds the appreciation of the US dollar against the local currency had ‘had a significant effect on the mark to market value of the US dollar denominated debt at Orascom Telecom Holding of approximately USD3.5 billion.’ 


For the twelve months ended 31 December 2010 Orascom posted a net profit of USD781.45 million, more than double the USD378.63 million reported for 2009, which the company attributed predominantly to gains recognised as a result of its revised agreements with France Telecom regarding the ownership of Egyptian cellco MobiNil.

In terms of turnover, in 4Q 2010 Orascom reported revenues of USD980 million, while full-year revenues totalled USD3.825 billion, up 2% year-on-year; Orascom noted that it was not including results from Orascom Telecom Tunisia, which the company agreed to sell in January 2011.


All of the group’s subsidiaries reported revenue growth bar Algerian operator Djezzy, which Orascom noted had endured ‘the persistence of an adverse operating environment.’ Earnings before interest, tax, depreciation and amortisation (EBITDA) in 4Q10 stood at USD402.24 million, while in FY2010 it was USD1.584 billion, up 4% y-o-y. 

At end-December 2010 Orascom’s consolidated subscriber base was 101.683 million, with its Pakistani unit, Mobilink, accounting for the largest number of those, some 31.794 million, up 3.2% against end-2009. MobiNil reported a wireless subscriber base of 30.225 million at the end of the year, up almost 20% against end-2009, while the largest percentage increase was reported at Telecel Globe – which comprises the group’s operations in Namibia, Zimbabwe, the Central African Republic and Burundi – where customer numbers increased by 77.8% to 3.242 million.


Bangladeshi unit Banglalink meanwhile reported a subscriber base of 19.3327 million at 31 December 2010, up almost 40% compared to the same date a year earlier, which Orascom said was the result of aggressive acquisition and strong customer retention strategies.

Commenting on the results Khaled Bichara, Orascom’s Group CEO, said: ‘The year 2010 has proven to be a year of significant milestones aiding the growth of Orascom Telecom Holding on an operational and strategic level.’

Wananchi Gears to Roll Out in Nine Countries With Cisco Deal

Kenyan ISP Wananchi Online has signed a contract with US technology solutions firm Cisco to rollout triple-play services across nine countries in East Africa. The deal is supported by East Africa Capital Partners and Viscous Capital, a wholly-owned subsidiary of Cisco.

Wananchi Online, which claims to be the only triple-play operator in East Africa intends to tap into markets in Kenya, Uganda, Tanzania, Rwanda, Burundi, Malawi, Ethiopia, Sudan and Zambia. The contract will see Wananchi Online deploying Cisco's integrated end-to-end network technology solutions - encompassing its ‘Borderless Networks’ and collaboration and data centre virtualization solutions.

Wananchi intends to extend a backhaul and last-mile fibre network across Nairobi and Mombasa in Kenya and Dar es Salaam in Tanzania. It will also build a WiMAX wireless network to provide uncapped internet access in smaller urban centres in Kenya.

The company will supplement its WiMAX and fibre offerings with VSAT services for small and medium businesses, particularly in remote locations in East Africa. Its long-term plan is to take fibre to the smallest towns in the region. East Africa Capital Partners’ Richard Bell has admitted that Wananchi is keen to develop a network in South Africa too, but: ‘South Africa is still a very closed and regulated market. East Africa has leapfrogged ahead of South Africa. If we could get a licence to build a cable network in South Africa, we’d be there in a second.’

Mark Schneider, chairman of the Wananchi Group commented: ‘The entertainment market for both home and corporate customers in Africa as a whole continues to be reshaped in light of technological advancements and new industry partnerships. The Wananchi Group's key objective is to expand our portfolio and enhance our commercial proposition, revenues and reputation. Cisco will help us to continuously deliver the necessary technology enhancements to our infrastructure to serve our ever-growing customer needs and remain at the forefront of delivering new and innovative services to our customers.’

Executives at Wananchi and Cisco said that the cost of international bandwidth in the region is now as cheap as it is anywhere in the world - thanks to the recent launches of EASSY, SEACOM and TEAMS submarine cables – making this type of increased investment possible.

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.

Vodacom Introduces M-PESA In Tanzania

­Vodacom Tanzania has officially signed up BOA Bank to provide Vodafone M-PESA services to its clientele. Both prepaid and post-paid Vodacom customers are able to open a Vodafone M-PESA account at no cost at any authorised agents and at BOA Tanzania outlets. Mobile users on any network can receive money sent through the M-PESA service.

"We are delighted to announce the signing up of Bank of Africa (BOA) as the very first Bank in Tanzania to become Vodafone M-PESA agent," said George Rwehumbiza, Vodacom's Head of Sponsorships and Communications.

"Today, BOA adds on to our current 1,000 agents countrywide", he continued to say.

BOA Bank Tanzania is a Private Commercial Bank operating in Tanzania serving corporate and retail customers. BOA's major shareholder, the Bank of Africa Group is already operating in ten other African countries namely: Benin, Mali, Burkina Faso, Ivory Coast, Kenya, Madagascar, Niger, Senegal, Uganda and Burundi with further plans of expanding.

Econet Begins Burundi Operations

Mobile operator Econet Wireless has launched its operations in Burundi. The company has for the past year been setting up office, recruiting workers, installing masts and doing preliminary testing. Econet Wireless is now connecting clients for a one-month network testing.

According to East African Business Week, the public has received the new operator with enthusiasm. For quite a while, potential clients were bombarding Econet offices with requests as a result of the sometimes erratic connectivity of the existing service providers. Econet Burundi MD Darlington Mandivenga said during the first 30 days, customers will be connected to test the voice quality and coverage of the network as the technical team fine tunes everything. He said the Econet has "hundreds of thousands" of customers on it waiting list.

Currently, Telecel is the biggest player in the market using the trade name Ucom, with about 295,000 subscribers. The second largest is the state-run Onamob, which has 79,000 subscribers. It is followed by Africell, which recently rebranded to the name Tempo, with 23,000 subscribers.

Yanick Mugisha, the brand manager at Econet told East African Business Week the plan was to have over 100,000 subscribers in the first month. The clincher for Econet may be the SMS interconnection agreement it has signed with the other operators, as to date, mobile users could not send SMS from one mobile operator to the other.

The network testing will cover about 16 provinces where Econet has installed base stations. Econet hopes to cover 94 percent of the country by the time it launches its network in a month's time.

East Africa ICT Earnings Soar

Earnings in the ICT sector in East Africa will rise from $164 million in 2007 to a $788 million by 2014 due to a favourable business environment for Internet service providers and growth in broadband connections, according to a just released report by market analyst Frost & Sullivan.

According to the firm, the region’s lack of an undersea cable connection has meant that Internet services have been prohibitively expensive, limiting the number of people who could get hooked onto the net, since countries have had to rely on expensive satellite technology for international connectivity. This has had a negative effect on the earnings of players in the sector.

“Current deployment of undersea cable systems will provide much-needed broadband connectivity in the region, positively impacting on the cost of Internet services,” noted Frost & Sullivan research analyst Letticia Mulenga Nkumbula in a briefing statement Saturday.

“Both Kenya and Tanzania are going to have a landing point of their own, thus putting the region at an advantage,” she added.

According to Frost & Sullivan, governments’ support for the ICT sector in the region has seen the pace of liberalisation pick up, with the attendant enactment of the requisite regulatory and market legislation in the EAC’s five member states — Kenya, Uganda, Rwanda, Burundi and Tanzania.

Rwanda has taken the lead in this aspect, with the regional powerhouse, Kenya, enacting the Kenya Communications Act, 2008, last December.

Elsewhere, the liberalisation of the telecoms sector and the introduction of converged licences in the region have spurred increased competition among Internet service providers (ISPs).

This has caused a reduction in telecom tariffs, resulting in a positive effect on the subscriber base, analysts say.

In the Internet market, mobility and the ability to provide faster data transfer rates are some of the key competitive factors,” said Mr Nkumbula.

Analysts say that the level of aggressiveness demonstrated by mobile telecom operators in the data space means that internet service providers (ISPs’) across East Africa will need to look beyond their traditional Internet services to include net solutions and content in order to expand their markets.