Starcomms Loss for H1 Falls

Nigerian CDMA operator Starcomms has reported a pre-tax loss of NGN2.94 billion (USD19.1 million) for the first half of 2010, news agency Reuters reports. The figure represents a fall from a loss of NGN3.68 billion posted in the same period a year earlier.

Meanwhile, the fixed-wireless company’s revenue fell to NGN16.12 billion in the first six months of 2010 from turnover of NGN16.92 billion generated in 1H09.

Starcomms has approximately 3.2 million CDMA customers in Nigeria, with a network covering 31 major cities, 22 States and covering 175 towns.

Orange Joins Kenya Tariffs War

Telkom Kenya, which operates Kenya’s smallest cellco by subscribers Orange Kenya, has become the fourth and final operator to enter the ‘price war’ that has dominated the wireless sector since regulator the Communications Commission of Kenya (CCK) cut its interconnection rates by 50% last week.

Telkom has responded by reducing its own rates to KES2 (USD0.024) for calls within the Orange network, while calls to other networks will be charged at KES4 per minute, for both post- and pre-paid subscribers.

Meanwhile, when announcing the company’s new mobile tariffs, Telkom CEO Mickael Ghossein complained that the CCK had not consulted him before lowering the interconnection rates for fixed line services. Mr Ghossein commented: ‘We have taken issue with the CCK’s decision to set the interconnection rate for fixed lines with GSM at KES1.67, on the basis that it was too low to be sustainable and did not take into account running costs as well as network maintenance costs. We can easily close shop if we charge less than KES3 for off-net calls. The market is in a big mess. What other players are doing is not professional. My strategy is to sustain the company and grow revenues. Voice is dead, broadband is the future. At Telkom Kenya, with the enormous broadband resources we have, it is at our advantage as others fight.’

Telkom is the only operator licensed to provide fixed line services within the Kenyan wireline market

Econet to Introduce Per Second Billing

Econet Wireless Zimbabwe, the country’s largest mobile operator, will launch comprehensive per-second billing for all national and international calls, for all its pre- and post-paid users next month, its CEO Douglas Mboweni has announced. The GSM provider, which currently offers per-second billing on certain services, said the move applies for corporate and residential subscribers, at peak or off-peak times, and on calls to any mobile or fixed network. ‘The cost of making calls will be cheaper, so traffic volumes will increase. We had to first clear issues of capacity before [fully implementing] per second billing,’ Mboweni said, explaining the fact that the firm had delayed the implementation after announcing the move around a year ago. Zimbabwe's three mobile operators – Econet, Telecel and NetOne – were given until September to implement per-second billing by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ); NetOne was reportedly the first network to charge customers per-second but to date has not announced a comprehensive service covering cross-network calls; Telecel is also yet to confirm it will comply with the new billing system. The three cellcos are also facing a 31 August deadline set by POTRAZ to register the details of all pre-paid mobile SIM card users.

Telkom Resumes Talks With AT&T Over Partnership

South African telco Telkom has announced that it is looking to restart talks with US-based AT&T about its long-mooted African partnership, which has so far brought very little new business to South Africa.

In April 2009 Telkom signed a Memorandum of Understanding (MoU) with AT&T that would allow the US firm's African clients to use Telkom's internet network when expanding or conducting business on the continent.

In time, Telkom's network was due to be linked to AT&T's global network, boosting its business prospects further. It is thought that progress has been stunted by issues related to pricing and after-sales support.

Acting CEO Jeffrey Hedberg told Reuters: ‘I am going to re-ignite discussions with AT&T. The partnership has not progressed to an extent we would like to date.’ Hedberg also confirmed that Telkom’s ZAR6 billion (USD800 million) plan to enter South Africa's mobile phone market by the end of 2010 is still on course, adding: ‘We are working very hard and remain committed to launch our mobile before year-end’.

MWEB to Finally Launch New ADSL Product

South African ISP MWEB has announced that its long-rumoured 10Mbps uncapped ADSL products will finally be available in September.

The company has explained that the delay is down to incumbent PSTN operator Telkom’s hesitant upgrades of MWEB’s IPC platform – the bandwidth that connects MWEB customers to Telkom’s last-mile network.

Although 4Mbps ADSL subscribers in certain areas have already been upgraded to 10Mbps, users in cities such as Pretoria, Johannesburg, Cape Town, Durban and Port Elizabeth are only reporting speeds in the region of 6Mbps. As things currently stand, MWEB has to make use of additional capacity on its SAIX network in order to meet its total ADSL demand. It is reported that the additional SAIX capacity costs MWEB ‘a great deal of money’.

A spokesperson for MWEB commented: ‘Firstly, we want to satisfy ourselves that Telkom has addressed some of the congestion problems on its own network, to cater for this additional demand. Then, we are waiting for Telkom to finalise an upgrade to our own IPC platform.

These upgrades were put on hold during the World Cup, but work has now resumed and will hopefully be completed within the next three to four weeks. Until we have this additional capacity in place we are not comfortable of being able to offer a product that lives up to our own high standards, and meets your expectations in terms of performance and reliability.’

Uganda Gets New Mobile User's Watchdog

A new body has been set up to protect the interests of mobile phone users in Uganda.

A report from AllAfrica.com says that the Mobile Telephone Watchdog will help guard consumers against bad practice by the country’s cellular operators.

Uganda’s wireless sector was home to more than 4.4 million subscribers at the end of June 2010.  MTN Uganda controls around 46% of the market, with Zain Uganda claiming around 19%, and Uganda Telecom and Warid Telecom accounting for approximately 16% each. The remaining 3% is split between Orange Uganda and I-Tel.

CCK Consultants Indemnify Safaricom

Safaricom, Kenya’s largest cellco by subscribers, has been vindicated in its battle against stringent new regulations introduced by the Communications Commission of Kenya (CCK).

After Safaricom threatened the regulator with legal action, information minister Samuel Poghisio hired UK consultancy firm Frontier Economics to review the country’s new competition rules. 

 

According to documents viewed by Business Daily, Frontier Economics found key aspects of the contested rules to be out of line with international best practices, and recommended that they be revised or struck out altogether.

Citing the European Commission’s telecom sector competition rules – which stipulate that a player must have at least 40% to 50% of market control to be declared dominant, rather than the 25% figure used in Kenya - Frontier Economics has now placed a heavy burden of proof on the CCK if it intends to act against Safaricom’s dominance. Further, the British consultants have suggested that the CCK cut the 90 days notice clause regarding new tariffs to 30 days, reducing the chance of Safaricom being upstaged by its smaller rivals.

In addition, Frontier Economics suggests that the CCK should lose the power to adjust tariffs independently, recommending that the watchdog should advise the operator about proposed changes without being specific about the mooted tariffs.

Safaricom controls 81.5% of the Kenyan wireless market.

New Intra-network rates Could See Fall In Call Rates In Kenya

Cross-network end-user call rates in Kenya are expected to drop next week when new wholesale interconnection charges (mobile termination rates [MTRs]) are announced, reports the Daily Nation.

The Communications Commission of Kenya (CCK) appointed UK-based strategy consultants, Analysys Mason to study the country’s call rates last month, and the consultancy firm has recommended halving the current fees that cellcos charge one another for terminating calls. Analysys Mason advised the CCK that MTRs should be cut to KES4.42 (USD0.05) in September, and then decreased in phases before being scrapped altogether in January 2014. MTRs have decreased in recent years from KES6.4 in 2007 to KES5.6 (2008) and KES4.72 (2009). According to sources, the CCK will unveil the new rates within the next seven days.

Atul Chaturvedi, country manager of Essar Telecom Kenya, welcomed the move, complaining that the current termination charges make calls to other networks expensive, and lock mobile phone subscribers into networks with cheaper inter-network charges, curtailing market growth.

He commented: ‘We are happy with the recommendations, and hope that the benefits will be passed on to operators and enable us to reduce calling charges’.

Safaricom CEO Michael Joseph criticised the ‘price wars’ that have dominated the Kenyan wireless market in recent years, suggesting that the industry needs effective competition through product innovation and quality of service, adding: ‘We cannot sell minutes at a loss. Let them reduce rates, but it will only be for a short time. A business must make returns’.

G-Mobile Lays Out Its Plans

Malawi-based start-up cellular operator G-Mobile has announced that it will invest USD150 million in the next three years to become a realistic contender in the country’s GSM market.

CEO Peter Davies also told reporters that the South African-backed company had already injected USD25 million into the network, which is expected to be commercially launched by the end of the year.

On 20 May 2010 G-Mobile, registered as Global Advanced Integrated Networks (GAIN), was given 30 days to pay a USD6.9 million fine issued by regulator MACRA for failing to deploy its wireless network.

However, the cellco took the matter to the High Court in Mzuzu and gained an injunction against the penalty until a judicial review could be carried out. On 12 July Justice Lovemore Chikopa upheld the injunction and set 23 August 2010 as the date for the matter to be heard in court. G-Mobile has partnered Telkom Management Services of South Africa to help it plan and deploy a network and is using ZTE of China as an equipment supplier.

Mr Davies claimed that the newcomer aims to raise the level of quality in Malawi’s mobile services sector as well as bringing down the cost of calls in the country.

Vimpelcom 'About to Buy' Weather

Reuters reports that Russia’s Vimpelcom and Naguib Sawiris are ‘close’ to signing a term sheet for the sale of the Egyptian tycoon’s holding company Weather Investments, which owns 50%-plus-one-share of Egyptian-based mobile group Orascom Telecom and 100% of Italian telco Wind Telecomunicazioni as well as controlling Greek operator Wind Hellas.

The report, citing Italian newspaper Il Sole 24 Ore, said that Sawiris is looking at selling Weather to Vimpelcom with help from Lazard, Deutsche Bank and Citigroup. Vimpelcom declined to comment on the Il Sole 24 Ore report today whilst Orascom was not immediately available for comment.

Zantel Introduces New Flat Rate Tariff

Tanzanian mobile services provider Zanzibar Telecom Limited (Zantel) has announced the launch of a new uniform call rate plan to other networks, marking a new wave of competition in the cut throat domestic sector.

The East African Business Week newspaper reports that Zantel’s offer called 'Twanga Kote Kote' (call anywhere) gives its subscribers freedom to make calls at any time to any network in Tanzania for only TZS1.99 (USD0.00133) per second, down from TZS5.50 per second previously - a 68% reduction.

The operator’s move is likely to be followed by other market players, while Peter Saluwati, the Executive Director for the national regulator, the Tanzania Communication Regulatory Authority (TCRA), welcomed the development, saying that lowering the across network charges was ‘good news’ for end users.

Russian Cellco in Orascom Bid

Reuters, quoting Russian newspaper Kommersant, reports that Russian cellco Vimpelcom is considering a potential deal to purchase 51% of Egyptian cellular group Orascom Telecom as well as take control of Italian full-service telco Wind Telecomunicazioni by buying out the two companies’ mutual holding company Weather Investments.

Weather Investments is controlled by Egyptian tycoon Naguib Sawiris.

The Kommersant report, which did not name its sources, said Vimpelcom could pay for the deal with cash and shares, with Sawiris and his partners getting approximately 20%-23% of voting rights in Vimpelcom, which currently has a market value of USD22.6 billion.

The potential deal, worth an estimated USD6.5 billion without debt, would reduce the stakes of Russia’s Alfa Group and Norway's Telenor in Vimpelcom to around 35% and 27% respectively, from 44.65% and 36.03% at present, following the Russian firm’s merger earlier in the year with Ukraine’s Kyivstar. Elsewhere, Wind’s Greek sister telco Wind Hellas is currently receiving offers from potential new investors as it aims to restructure its capital.

Zain Signs Deal To Enable Network Expansion

An unconfirmed report from the online journal Trade Finance states that Standard Chartered Bank has signed a telecoms equipment deal with Ghanaian cellco Zain Communications Ghana Limited (formerly WESTEL), backed by Sweden’s credit agency EKN. It is understood the value of the contract is USD77 million and will be used to provide telecoms equipment to support the cellco’s network expansion in the country.

Zain Ghana had approximately 1.375 million mobile users at 30 June 2010 up from 1.293 million at the start of the year, a market share of 8.4%. Its networks covered an estimated 53% of the population.

Econet gets Credit For Harare Expansion

Econet Wireless Zimbabwe says it will strengthen its mobile network in the capital Harare under a new USD60 million loan from Swedish export credit agency EKN, adding to existing credit lines with China and the Egyptian-based African Export-Import Bank. CEO of Econet, Douglas Mboweni, said the entire facility would be channelled into buying infrastructure for Harare to meet rising demand, adding that engineers from Swedish technology partner Ericsson had already arrived to install the equipment.

Wataniya Q3 Profits Down 69%

Wataniya, Kuwait's second largest mobile phone operator by subscribers has reported a 69% drop in net profit for the three months ending 30 June 2010.

The company made a net profit of KWD19.6 million (USD68.32 million) during Q2 2010, down from KWD63.5 million one year earlier. Net profit in 1H10 was reported at KWD35.8 million, down from KWD78.8 million in the first half of 2009.

Wataniya, itself a unit of Qatar Telecom (Qtel, which will publish its Q2 results on Sunday), operates in markets including Algeria, Tunisia, Saudi Arabia and the Maldives.

Orascom Atributes Q3 Loss to Forex

Egyptian telecoms group Orascom Telecom has revealed a net loss for the three-month period ended 30 June 2010 on the back of unrealised foreign exchange losses.

In the second quarter of its 2010 fiscal year the company posted a net loss after minority interests of USD66.1 million, reporting that forex losses in the three-month period were USD120 million; by comparison, in the same period a year earlier Orascom posted a net profit of USD111.8 million.

The Egyptian company also noted that impairment charges in Algeria and start-up losses attributed to its Canadian operations had both impacted on the bottom line.

Revenues however fared better, with Orascom generating turnover of USD1.058 billion in 2Q10 compared with USD990.6 million a year earlier, a 7% year-on-year increase, although monthly average revenue per user (ARPU) continued to decline across all regions of operation.

In the three-month period Orascom reported that global ARPU was USD5, down 16.7% y-o-y, with Lebanon-based Alfa ad Egyptian cellco MobiNil reporting the largest declines, of 25% and 22.9% respectively.

In operational terms, Orascom saw subscriber growth at every one of its subsidiaries in the quarter, with the group’s total wireless customer base standing at 99.079 million at end-June 2010. Mobilink, Orascom’s Pakistani unit, remains its largest by subscribers, with the subsidiary adding just over 630,000 customers in the three months to 30 June 2010 to bring its total to 32.302 million.

In its home country meanwhile MobiNil, which accounts for the second largest number of Orascom’s total customers, reported 26.147 million subscribers at the end of the first half of 2010, up just 0.1% y-o-y, with the slowing growth attributed to new regulations and the shortage of new numbers.