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ISSUE NO 340

Four African countries try to turn back the clock by creating monopoly international gateways again

Licences for international gateways are the strategic heights of African telecoms competition. Some countries have liberalised access to them and will reduce licence fees (see Telecoms News). However four countries (Benin, Central African Republic, Sierra Leone and Zimbabwe) have tried to turn back the clock by creating a single monopoly gateway, taking away licences from other operators. A 19th January Benin Counsel of Ministers communiqué announced that it was “determined to clean the telecoms sector in Benin once and for all. To do this the Government has no option but to return to basics”. It said that the majority of operators are doing so without any license and that most authorisations issued by the previous Minister and arrangements made with Benin Telecom are not valid.

In this context, all VSAT operators, excluding private networks, offering services to the public are illegal. GSM operators having direct interconnect in Benin are illegal. GSM operators who have installed their own gateways to originate and terminate international traffic are doing so illegally. All WiMax; WiFi, VoIP services are illegal And most pre-paid card sales are illegal.

According to the communiqué:” All these activities are happening to the detriment of the Republic of Benin and are viewed as economic crimes against the Republic. The financial losses Benin incurs as a result of this must stop with immediate effect”. The purpose of the communiqué was to force operators to interconnect via the telco incumbent Benin Telecom and to make them route all international traffic through its gateway. The Government is also challenging the acquisition of Areeba by MTN and the change of Telecel to Moov on the basis that licences are issued to individuals and “cannot be transferred to any other person under Benin law."

Because of both staggering incompetence and wholesale corruption, the incumbent telco, Benin Telecom has debt totalling US$20 million. Although this has been restructured, the next payment is due in January so the Government is trying to acquire revenues to pay for the incumbent’s corrupt incompetence.

One industry insider told us: “The government initiative will fail or generate chaos in the telecoms industry. At present all the GSM traffic bypasses Benin Telecom’s infrastructure. There is no way that Benin Telecom can handle this level of traffic. If the government tries to enforce this measure it will be chaos. Benin Telecom’s infrastructure definitely can’t support it. The Government wants to forbid new technologies but I doubt that the government has the means to stop the usage of new technologies ”.

Meanwhile the Sierre Leone Government is engaged in a similar campaign to create an international monopoly gateway for its incumbent telco, Sierratel. It has announced that by Mid-March of this year all mobile operators will route their traffic through the incumbent. Although the mobile operators lobbied vigorously against the move, it appears they have not been able to change the Government’s mind.

As with Benin, doubts exist as to whether Sierratel has the capacity or competence to handle all the current traffic of the mobile operators. One mobile operator told us:”It’s not only about the money, it’s also about the lack of control we will have over quality of service and prices.” Every monopoly international gateway in Africa has had the impact of keeping the cost of international communications artificially high.

In Central African Republic a similar move was made in April last year under a contract operated by Amitelo’s Telsoft. After four months testing, it started receiving all international traffic from 18 September 2006 onwards. Prices for international termination were increased in October 2006.

Again fuelled by a desperation to keep a failing incumbent alive, the Zimbawe Government has been seeking to reintroduce a monopoly international gateway. It even went so far as to have a senior security official say that national security could only be guaranteed by having one gateway.

We have also learned that in neighbouring DRC that in an attempt to sell of the almost non-existent incumbent OCPT, the pre-election Government was prepared to offer a potential buyer the return of the international gateway monopoly.

This attempt to turn back the clock is fuelled by the financial desperation of the incumbent telco. However if (as in the case of Benin) neither Government nor Government-appointed management are capable of running a competent telco company, how will this be improved by creating a monopoly-protected area of business? Africa needs cheaper international communications to stay globally competitive. This will only be achieved as countries like Nigeria and Kenya know, through competitive international providers and privatised incumbent telcos.

MTN TO PURCHASE CI’S AROBASE IN ANOTHER “BELOW-THE-RADAR” DEAL

Industry sources in Cote d’Ivoire say that MTN has made another acquisition, buying Ivorian SNO Arobase Telecom. Its licence gives it the right to operate all type of national and international telecommunication and communication rights. Only GSM is excluded from its licence. This is the second discreet deal that the South African mobile giant has made in the last few months.

Over the last few years Arobase Telecom has made a considerable investment in building a fibre optic network around the capital Abidjan. It has also recently installed a CDMA switch made by Huawei and through a few of its wireless POPs has been offering fixed wireless telephony services. Current subscribers are estimated to number around 5,000.

MTN will pay slightly above US$100 million to buy out about 60% of the company’s debt and to reduce current owner Gervais Amani’s shareholding to the status of minority shareholder. Amani will no longer manage the company under MTN’s ownership.

This is MTN’s second non-mobile acquisition and appears to be part of a strategy to build up infrastructure and fixed line assets. Late last year it purchased the Nigerian company VGC Communications for a sum of around US$60 million. At the time a tight-lipped MTN let slip that it was “looking at all the opportunities available under the UASL (unified access service licence) regime and cannot comment on any speculations at this time."

According to Technology Times, MTN also had within its radar another smaller Nigerian player, XS Broadband, a company jointly owned by Lagos-based technology company, Resourcery Limited and UBA Plc.

VGCCL wired the Victoria Garden City, an estate spanning over two million square meters by the Lagos Lagoon, consisting of residential, commercial and public service areas with telecommunications infrastructure, for voice, data and high-speed internet services. The City is built for 2,000 housing units of various types and caters for a population of about 30,000.

It has also wired up Dolphin and Parkview Estates both in Lagos for residents of these low density residential estates consisting of high class duplexes, terraces and block of flats, with state-of-the-art telecommunications exchange and infrastructure to provide high quality voice and internet services.

Also on the Marina Lagos, VGCCL installed five kilometres of 72-core optic fibre cable between Dolphin Estate and Marina, as well as over 90 kilometres copper distribution around Marina. The fibre optic on its optic fibre backbone from Victoria Island through Dolphin Estate terminates at the VGCCL remote site in Marina, to offer voice, data and internet services to businesses concentrated around that area.

According to VGCCL, the company has installed 16 kilometres of optic fibre cable between Victoria Island, Ikoyi and up to Dolphin Estate and today boasts of over 500 kilometre span of copper cable as subscriber distribution.

In Port Harcourt, River State, it has installed to date approximately 1,000 kilometres of primary and secondary cable network distribution comprising of fibre optic backbone network and copper cables. Also in Abuja, VGCCL has installed approximately 35 kilometres of primary network distribution comprising of fibre optic backbone network.

SONATEL AWARDED THIRD MOBILE OPERATOR LICENCE IN GUINEA-BISSAU

France Télécom-owned Senegalese incumbent Sonatel has won the tender to operate the third mobile phone network in Guinea-Bissau, beating off rival bids from four other firms, including US firm Global Voice. In a press statement, Sonatel Director Fernando Lacerda said his company’s proposal was adjudged to be better than bids from Global Voice, Teylium of Mauritius, Lintel Africa (based in the Cayman Islands) and local company 3 Tel. No financial details were disclosed.

Sonatel plans to launch the new network within five months under the banner Orange Bissau, putting it in direct competition with incumbent celcos, government owned Guiné Telecom, and South Africa’s MTN Group, known locally as Spacetel Guinea-Bissau (Areeba). Orange Bissau has a three-year investment plan in which it plans to cover 90% of the country in five rollout phases. The first stage will take in the capital Bissau with a launch slated for May 2007. By 2010 the start-up plans to have expanded coverage to the 37 sectors that make up Guinea-Bissau, including all the country’s main road networks.

(SOURCE: Telegeography)

RELIANCE GETS SHOT AT SNO LICENCE DEAL IN KENYA AFTER VTEL CANCELLED

The Communications Commission of Kenya (CCK) has cancelled the tender for a second national operator (SNO) awarded to the Vtel Consortium. Commissioner General John Waweru on Friday said wrangling between Dubai-based Palestinian firm Vtel Holdings and local partners had stopped the group from meeting its commitments.

"The commission board has resolved to cancel the tender... on the basis of non-compliance with the tender requirements, and to invite the next highest-ranked bidder Reliance to apply," Waweru told a press conference.

Waweru said the Reliance Consortium had a week to apply for the SNO licence after which the commission would re-issue the tender. The Reliance Consortium is led by India's largest private telecom service provider, Reliance Telecoms, and Kenya's Triton Group with Swedtel of Sweden as the technical partner.

Reliance Telecoms is the parent company of Flag Telecom, an undersea cable operator that has teamed up with Kenya Data Networks to connect Mombasa to the UAE.

Waweru said that the Vtel consortium had failed to apply for the licence as required under the tender rules by the expiry of the last deadline - 4pm on January 24. The group had been given three deadline extensions but failed to make an application each time. Once Vtel Holdings wrote to the CCK saying it was trying to replace its local partners.

Waweru added that the tender rules document authorised the Commission to call the bid bond and choose the next highest ranked bidder based on the financial offer. The Commission, he pointed out had already notified both the Vtel and Reliance consortia of the new development in the SNO deal.

Triton, the local investor in Reliance, said the consortium needed to discuss whether it could raise the money. "We have full intentions of taking up the offer," Yagnesh Devani, Triton's executive chairman, told Reuters. Waweru said Reliance would be expected to increase their bid to match that was made by Vtel Consortium and has up mid next week to express their willingness to take up the offer.

Vtel had quoted a financial bid of $169.7 million (Sh12 billion) winning out against Reliance, which bid $111 million (Sh7.7 billion), and India's Mahanagar Telephone Limited at $ 52.1 million (Sh3.6 billion). They won a lucrative unified licence that allows them to provide national mobile telephony, Internet backbone, international voice gateway, commercial VSAT and long-distance voice data services. Waweru said the decision to invite Reliance to apply for the licence was driven by an overriding commitment to adhere by the SNO tender document.

He however, said should the Reliance Consortium be unable to raise their bid or fail to express interest in taking up the new offer, for whatever reason, CCK would have no choice but to re-tender for SNO.

This time though, he added, tender rules would be relaxed featuring among others, the possible dropping the 30 per cent shareholding commitment by foreign investors before a licence is issued.

(SOURCE: The East African Standard)

LIBERIA GOVERNMENT TO REVIEW GSM CONTRACTS

Information Minister Lawrence Bropleh has disclosed that the Liberian government is at the moment reviewing all contracts entered into with GSM companies operating in the country. The Information Minister said contracts signed between these companies and the Liberian government were not cleared by the various government ministries responsible before they were signed.

Speaking to journalists at the Ministry of Information last week following a cabinet meeting that he attended but was chaired by President Ellen Johnson Sirleaf, Minister Bropleh said government was reviewing those contracts that do not conform to the law of the country signed with GSM companies in the country.

He said in the case where the government find out that these contracts are in contravention of the laws of the country, they will be reviewed, renegotiated, cancelled or considered null in avoid.

According to him, government want to make sure that the Liberia Telecommunication Authority (LTA), which is responsible to license and interact with GSM companies on behalf of the government act with in the confine of the laws when it entered into signing contracts with GSM companies. He said where if it is found out that the LTA acted out of the laws, these contracts would be reviewed.

The pronouncement by the Minister of Information that contracts entered into by the government with GSM companies are be reviewed to reflect the national interest, comes less than two months after the country's four registered GSM companies signed an 18 years agreement with the Liberia Telecommunication Authority (LTA) for their operation in the country.

Aui Sadeh of Cellcom, Khaled Mikkawi General Manager of Lone Star, Adnan Ukaily, CEO of Comium and Azzam Sbairty, CEO of Libercell signed on behalf of their respective organizations, while the Chairman of the LTA Dr. Saah Abdulai Vandi signed on behalf of the LTA at the time. Minister Bropleh said other functionaries of government such as the Ministries of Finance, Justice among others were not part of that signing process.

(SOURCE: The Inquirer)

AFRICAN TELECOM GATEWAY LICENCE COSTS TO COME DOWN AFTER UNCTAD INTERVENTION

The cost of acquiring international gateway licenses by private mobile service providers in Africa is likely to come down following the intervention by UNCTAD, according to senior government officials.

Ministry of Communication and Transport Permanent Secretary Peter Daka said this week that the Zambian government has started reviewing international gateway license fees, currently priced up to hundreds of thousands of U.S. dollars.

UNCTAD has also instructed Kenya, Uganda, Cameroon, Gabon, and Niger to immediately begin reviewing international gateway license fees, saying that the current fees prohibit the development of African information and communication technologies.

"We have already started negotiating with the private sector [mobile service providers] to find a reasonable pricing for the international gateway license fee," said Daka.

The international gateway license allows individual service providers to have their own signalling access codes. But many African countries have highly priced their international gateway license as a way of restricting service providers from acquiring the license, critics say.

Currently, the cost of acquiring an international gateway license stands at $214,000 in Kenya and at $50,000 in Uganda. The move by African countries to reduce international gateway license fees follows persistent calls by mobile phone service providers on African governments to liberalize their international gateways as the only way to decrease the cost of communication.

(SOURCE: Daily Trust)

TELKOM KENYA TAKES SECOND STEP TO STOP FINANCIAL BLEEDING BY CUTTING 6,500 STAFF

At the stroke of a pen, Telkom Kenya has laid off 6,500 workers in one of the biggest retrenchment exercises under President Kibaki's Government. When The Standard visited Teleposta Towers in Nairobi, some of the workers aged below 35 pondered over the fates of their young families, as the Government appeared to have set the second phase of the restructuring process in motion.

The first phase of the restructuring of Telkom Kenya was effected in May last year, when some 3,000 employees aged 50 years and above were retired.

The retrenchment takes off after a consortium of eight local banks got together to advance the company the money ahead of the Government raising the money from the Safaricom IPO. The banks advanced the State corporation Sh5.8 billion to roll out the second phase of the programme even though reports indicate that the parastatal needs to raise a further Sh8.4 billion to finance its pension scheme.

The Kenyan units of Barclays Bank, Standard Chartered Bank, South Africa's Standard Bank and Kenya Commercial Bank advanced the loan. Others were NIC Bank, CFC Bank, Commercial Bank of Africa and East African Development Bank.

Telkom is expected to repay the loan by the end of one year, with lenders holding shares in leading mobile phone company, Safaricom, as security. Safaricom is a joint venture between Telkom and Britain's Vodafone Plc, with Telkom owning 60 per cent and Vodafone 35 per cent. Vodaphone agreed to waive its pre-emptive rights in Safaricom to allow Telkom Kenya to borrow from the banks.

The Government is expected to float 25 to 26 per cent of Safaricom in an initial public offering this year to raise money to repay the debt from the banks. When the retrenchment plan was mooted, it was expected that it would be financed by the sale of the company's nine per cent stake in Safaricom to Vodafone.

However, the plan was shelved after Treasury and the British company failed to agree on shares valuation. Instead, the two entities mandated the Government to seek alternative sources of funding from the market.

Under the retrenchment programme, workers will be sent home with two month's salary, a severance pay equal to two-and-a half-month's salary plus Sh150,000 and Sh40,000 transport allowance. Those targeted are mostly semi-skilled and non-core staff such as security personnel, telegraphics, cleaners and clerical assistants. The affected workers were handed their retrenchment letters yesterday and directed to clear with the firm. Telkom said that the services of the affected employees will cease with effect from January 31.

(SOURCE: East African Standard)

RESCUE ATTEMPT ON POORLY PERFORMING TELECENTRES IN SOUTH AFRICA

Dozens of telecentres set up to take telecommunications services to rural areas have been an absolute waste of time and money, says an organisation trying to salvage them. Of 133 telecentres set up by the Universal Service Agency (USA), many are underused, entirely dysfunctional or have turned into private businesses benefiting the people appointed to run them. Now a three-year project is under way to revive some of the centres and assess which should be written off.

Many may be beyond salvation, says David Barnard, a director of Sangonet. "There are some fairly critical views about the impact telecentres have had and to a large extent those criticisms are valid," he says. "Real questions have been raised about their relevance and whether millions of rands have been pumped into a big black hole with little to show for it."

Sangonet, a body that helps development agencies use IT in the communities they serve, is driving the telecentre overhaul. It is working with the USA, now renamed the Universal Services and Access Agency of SA (USAASA), with the goal of reinventing them as community centres offering IT training. Also involved is the Telecentre Association of SA, which helps rural communities operate sustainable centres offering distance education and other multimedia services.

Private companies including Microsoft and technology training group Torque IT have been brought in to add more skills, money and expertise to the overhaul. "We are bringing in advice and expertise because to turn this telecentre Titanic around, a number of things need to be changed," says Barnard.

Telecentres were expected to provide rural areas with access to educational, health-care and government services, facilities for small businesses, and to teach people computing skills. The agency's original goal was to roll out 4000, but in 2003 it admitted that 25 of 68 centres set up by that stage were not functioning well and had to be relocated. Yet no changes were made to the strategy, and many centres set up in the following years have also failed.

The centres were built using a levy paid by every company licensed to offer telecommunications services, including Telkom and the cellular operators. Those companies often complain about the inefficiency of the agency and believe they could invest their levies in far more effective community development projects.

The operators contribute 0,2% of their annual turnover -- totaling hundreds of millions of rands -- to the universal service fund, which the agency should use to take telecommunications services to remote areas. But several studies have confirmed that the agency has failed to do that, forcing the communications department to intervene and revitalise the organisation.

The telecentre revival plan is an attempt to "sort out the mess" the agency created, Barnard says. Too much emphasis was put on creating a physical infrastructure with little attention paid to the skills of the people running them, their accountability or the services they actually offered. "They built some buildings, put in a couple of PCs and thought they had taken care of the problem," he says.

The first step saw 50 telecentre managers attend a course to learn how to train their colleagues. But their skills were so poor the top 10 have been asked to continue training the other 40. "For some people on the course it was the first time they had switched on a PC," says Barnard.

Yet those people were running the centres and teaching rural residents to use the equipment. Once the managers are properly educated they should be able to run computer literacy courses and issue qualifications to help people find employment.

A second step was to teach the managers to run the centres as self-sustaining operations with proper governance and accountability. Many are run on a voluntary basis, so business acumen, sustainability, quality control and a responsiveness to community needs are absent, Barnard says.

Sangonet wants the agency to conduct a thorough review of each telecentre to assess its sustainability. Even a well-run centre with skilled staff will be ineffective if nobody in the community needs IT skills or can afford the training.

Centres in the most remote regions may have a community development role to play, but they will need private companies to support them. The agency's head of regulatory and corporate affairs, Tebogo Thapatlaase, says the role of telecentres is being re-examined after a study last year highlighted their underperformance.

"We are aware of the criticisms and some of the criticisms are right," he says. The lack of skilled managers should be solved with the help of Sangonet. A second problem is the location of some centres in areas with too little economic activity to sustain them. The agency is now looking at an individual approach for each centre to suit the community it serves, he says. Efforts to broaden the quality and quantity of technology training they offer will make them more useful.

"When the community sees it is something that's useful to them, the usage will be higher, and that will make them more sustainable." Thapatlaase disagrees that money has been wasted. "Whatever shortfalls there are, there has been an element of awareness of what technology can do for development."

(SOURCE: Business Day)

IN BRIEF:

- The Nigerian Communications Commission (NCC) has confirmed the receipt of full payment of $400 million by Mubadala Development Company (MDC) of the United Arab Emirates (UAE) for its unified access service license.

- Vodafone agreed to sign for a 3G licence in Egypt for 3.34 billion Egyptian pounds (€0.45 billion) and 2.4% of annual revenues from 3G services. The licence allows Vodafone to launch 3G services, although under the licence conditions it cannot launch before the third entrant Etisalat who is expected to launch in Q1 2007.

- Ghana Telecom has offered to reward any member of the public who provides information leading to the apprehension and arrest of a group of unidentified persons engaged in destroying underground and overhead cables laid by the company under its expansion programme.

- Zimbabwe’s mobile telecommunication companies are expected change their numbering system from nine to 10 digits to accommodate more subscribers on their network systems.

- Telecom Namibia Limited on Friday announced it has formally engaged TDS Director Operations (Pty) Limited to manage the production of Namibia's telephone directory. TDS, which stands for Telkom Directory Services, is a subsidiary of South African telecommunications giant Telkom.

- With continued significant growth in the MEA region, Motorola has announced an expansive educational engagement strategy for 2007, which includes larger targets for recruitment and internships as well as curriculum development and thought leadership in business and engineering programmes.

TELECOMS, RATES, OFFERS AND COVERAGE

- Zimbabwe fixed telecommunications network operator TelOne will raise its tariffs with effect from next month. The increases will encompass Internet, trunk and international call services as the parastatal seeks to keep charges in line with operational costs.

- The theft of MTC's solar panels in the Caprivi region in Namibia has disrupted mobile services in some areas. MTC recently reported losses in excess of N$600000 with the theft of 51 solar panels which were reported between December 19, 2006 and January 17 - less than one month.

- There was no change to the top ten most penetrated markets in the Middle East & Africa between June and September 2006, the United Arab Emirates continuing to lead at the top of the table and South Africa remained unmoved in eighth, climbing 2.6pp of the way into the fourth quartile from 59.4% a year earlier. A total of 45 markets in the MEA region still had penetration rates of less than 25% at the end of September 2006 -. Eritrea remains the least developed market on the continent, with Ethiopia second from bottom, and Rwanda third from bottom with a 3.1% rate of mobile ownership having been overtaken by eight other nations between September 2005 and September 2006.

MOROCCO, TOP OF THE LEAGUE WITH CLOSE TO 400,000 ADSL CONNECTIONS

The Moroccan regulator, the ANRT has just released its quarterly statistics about the telecoms and internet sectors in the country. With close to 400,000 ADSL connections at the end of 2006, Morocco remains the top country in Africa in terms of broadband connections, well ahead of South Africa. In 2006, the growth rate for broadband has reached 57.8% and the number of subscribers has gone up from 248,011 in December 05 to 390,834 in December 06. Despite these good results, the Internet penetration rate is still a mere 1.34% at the end of 2006, a figure in progression when compared to a penetration rate of 0.88% at the end of 2005.

The migration from dial up connections to broadband has also continued at a rapid pace with. The number dropped by 40.4%. In 2006 the number of dial up subscribers has continued to decrease from 13,187 to just 7,862.

At the end of 2006, ADSL connections represent 97.8% of all internet connections in Morocco including dial up and leased lines. The other interesting change over the last year is the increase of the proportion of broadband connections with a higher speed than the basic 128kbit/s. In December 2006, the proportion of ADSL connections at 128kbit/s was down to 35% from 71% a year earlier. The number of broadband connections at 256kbit/s has on the other hand increased from 18% to 45% of the total number of ADSL connections. Further the proportion of connections at 512kbit/s has gone up from 4% to 10% over the past year too. However the number of connections at 1024kbit/s has gone down from 7% to 4% but this due to the introduction in 2006 of ADSL offers at 2 Mbit/s and 4 Mbit/s which accounts for 6% of the overall number of broadband connections.

Maroc Telecom which has just released its annual results for 2006 claims to have 384,000 ADSL subscribers. In other words the company’s share of the broadband market is a staggering 98.25%. This is likely to change during the coming year. As we reported last week, the Moroccan regulator is partially unbundling the local loop. At the start, new entrants like Meditel and Maroc Connect will only be able to use the high frequency part of the copper cable but this will enable them to offer alternate ADSL services which will compete with Maroc Telecom’s offers.

JINX NOW SUPPORTS VOIP PEERING

The Johannesburg InterNet eXchange (JINX) is now able to support VoIP (Voice over Internet Protocol) interconnection between ISPA (Internet Service Providers' Association of SA) members.

JINX enables ISPA members to interconnect networks and to exchange local traffic in order to save costs, while VoIP commonly refers to the routing of voice conversations over the Internet. "Because JINX currently interconnects most major South African IP backbones, it is ideally positioned for VoIP interconnect," said Lynne Orrock, Joint Chair of ISPA.

She added that the ability of JINX to support VoIP interconnection will facilitate interconnecting with VANS (Value-Added Network Services) operators who intend offering VoIP. The switching fabric at JINX has now been configured in such a way that companies connected to JINX are able to keep their voice and data traffic separate.

ISPA hopes that the ability to easily exchange IP voice traffic at JINX will encourage new members to join the Association, which already represents over 120 large, medium and small Internet service and access providers in South Africa.

(SOURCE: MyADSL)

CASINOS EYE LEGAL ONLINE GAMBLING JACKPOT IN SOUTH AFRICA

The legalisation of online gambling in SA in the near future is expected to send gaming and entertainment companies into frantic jostling for position. An amendment to the National Gambling Act looks likely to be passed into law in the next few weeks, making it legal for casino operators to offer lucrative online gambling services in the country, and to advertise in the South African media. The National Gambling Amendment Bill of 2006 proposes the licensing of operators offering online gambling.

Internet casinos use software downloaded by players, who buy credits to play through bank deposits or credit cards.

Wendy Rahamin, senior associate at Werksmans attorneys, says interested parties will have until February 12 to comment on the proposed legislation before the bill is tabled in Parliament. If passed into law, the National Gambling Board will publish regulations and an invitation for interested operators to apply for licences, a process likely to be completed before mid-2008.

The new legislation states that all computer servers have to be located in SA, and players will need to register their personal details to be permitted to play.

Currently, South Africans are allowed to bet in online sports books, which are located inside the country. In reality, people have been gambling online, whether it is legal or not. Gamblers in SA have access to the Piggs Peak Casino, Silversands Casino and African Palace online sites, which operate from Swaziland, Cyprus and The Netherlands respectively.

The popularity of online gambling has grown phenomenally and, according to the Economist, there are an estimated 3300 online gambling websites in existence, up from 400 on 1999. Some $12bn worth of bets were placed online last year, half of which are thought to have been placed by Americans. Online gambling was outlawed in the US in the second half of last year, when that country's congress passed a bill to prevent banks and credit-card companies from processing payments to online gambling companies, sending the stocks of online gambling companies plummeting.

SA's attitude has been more progressive, and in line with the European preference to regulate the industry and benefit through tax revenue. Land-based casinos in SA paid R2,1bn in gaming taxes in 2005, of which government received 37%. Gross gambling revenue in all forms of gaming rose to R11.5bn in 2005-06, up from R9.9bn during the previous period.

However, regulating players' access to online gambling has proved to be incredibly difficult, as the recent case of Casino Enterprises, which runs the Piggs Peak hotel and casino in Swaziland and an online gambling site, has illustrated. Casino Enterprises last year made an application for a court order to declare its internet gambling operations in SA legal.

Howard Berchowitz, MD of Piggs Peak, says that as the group operates from its land-based casino in Swaziland, and pays taxes and a gaming levy on its online gambling and land-based activities to the Swaziland government, "we consider our internet licence to be an extension of our land-based licence".

Berchowitz says that as far as he is concerned, any online gambling through the Piggs Peak website "is happening in Swaziland", and players are therefore not contravening the Gauteng Gambling Act.

Pretoria High Court judge Willie Hartzenberg disagreed, and granted the Gauteng Gambling Board a declaratory order banning online gambling that was not defined as bookmaking in the province. Berchowitz has filed for leave to appeal the decision.

When asked whether he thinks the decision could have a detrimental effect on any future applications for an online gambling licence in SA, he says he hopes to initiate a dialogue between the gambling boards of SA and Swaziland through the Gambling Regulators Africa Forum, a regulatory board for the Southern African Development Community.

Anthony Puttergill, deputy CEO of resort and gaming group Peermont Global, which operates the Emperors Palace and Grace Land casinos, says it is likely the majority of SA's land-based casino operators will apply for online licences once the practice is legal.

He says those who have already been operating online casinos have been "a source of frustration" to others in the industry. "We would also have liked to run an online operation, but we had too much to lose if we broke the law."

Anticipated revenue from online gambling in SA is expected to be small compared with that of land-based casinos because of limited internet access but Puttergill says internet penetration rates are set to grow, and the online sphere is "an important space to operate in and establish a presence".

(SOURCE: Business Day)

EAST AFRICAN COUNTRIES CALL FOR MORE EFFECTIVE E-TRADE LAWS

Stakeholders in the ICT sector have observed that there is need for cyber laws for EAC member states to operate effectively. All the states currently do not have laws on e-commerce. Stakeholders in the sector late year held two workshops, one in November and the other in December, to deliberate on how to fast-track the development of a legislative framework to overcome the challenges.

The meetings drew participants from the AG chambers, the EU, UNECA, UNDP, Government IT Services (GITS), the e-government secretariat and Kenya ICT Action Network (KICTANet).

The workshop discussed legal instruments on e-transactions in the context of regional instruments that are emerging under the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA).

However, EAC has recognised cyber laws (which include legislation on e-transactions) as key cross cutting issues that need to be in place for the successful implementation of e-commerce and e-government in East Africa. Despite the lack of regional legal instruments, there have been areas of co-operation among the states in e-transactions.

An example is the fact that the East African community have proposed guidelines for licensing and regulating transactions in money products and schemes in East Africa. There are also model laws on electronic transactions that have been developed by institutions to which the EAC and COMESA member states subscribe.

These include the United Nations Commission on International Trade Law (UNCITRAL) model laws for e-commerce transactions such as the UNCITRAL model, the e-signature law (2001), the UNCITRAL model e-commerce law (1996) and the UNCITRAL electronic contracting preliminary draft convention (2003).

The World Intellectual Property Organisation (WIPO) also has laws on digital copyright and trademark issues involving domain names.

Others are Internet Corporation for Assigned Names and Numbers' (ICANN's) Uniform Domain Name Dispute Resolution Policy (UDRP) and has also helped to solve thousands of domain name disputes.

Other model laws to which the EAC and COMESA subscribe to are the United Nations Model Law on Electronic Transactions, and the Commonwealth Model Law on Electronic Commerce.

The workshop recommends that EAC and COMESA member countries use the model laws as a basis for creating their regional and national laws in e-transactions.

However, the report says that despite the formulation of these instruments, experience from other regions such as the European Union (EU) shows that there are certain grey areas which the laws will need to address.

Among the issues which need to be cleared by the laws include are; the establishment of jurisdiction of states and other related regulatory agencies to govern electronic transactions; the establishment of taxation mechanisms for electronic transactions, and how to handle the liability of intermediaries in e-commerce and other e-transactions like the Internet service providers (ISPs).

Other issues include how the law can protect the privacy of individuals and institutions carrying out electronic transactions, and how the legislation can best govern electronic contracts and the process of contracting.

(SOURCE: East African Business Week)

IN BRIEF:

- Cameroon needs to invest about 800 billion CFA francs to set up eight million new Internet compatible telephone lines, Posts and Telecommunications Minister, Maïgari Bello Bouba, has said to PanaPress.

NIGERIAN OMATEK TO OPEN GHANA FACTORY IN MARCH

Omatek Computers is set to open its Ghana factory in March. It reiterated that the opening of the Omatek factory in March would officially mark the start of business by Omatek Computers (Ghana) Limited incorporated as part of the company's larger vision of creating a brand uniquely African for a global market.

"We believe in Omatek that we can make the continent achieve the Millennium Development Goals by 2015. We also believe that the much talked about Africa unity cannot be achieved if we do not make progress in technology. Entering Ghana for us represent an advancement of our common goals politically and technologically. We believe we must ally ourselves to the dream of our political leaders by joining their common aspiration for a more united Africa," said CEO of Omatek, Florence Seriki who recently welcomed a visiting Ghanaian delegation led by Dr Aggrey Ntim.

The statement added that since the company forayed into Ghana over three years ago, it has been able to penetrate the financial sector by providing hardware solution to some of the leading banks including those that had entered Ghana from Nigeria such as Zenith Bank and GT Bank. The Omatek factory would open a new chapter for the company in Ghana.

"Omatek has opened a credible avenue to further strengthen relationship between two African countries. Its coming to Ghana would advance the common aspiration of Ghana and Nigeria for economic empowerment through IT. It would also open a new way for Ghanaians and Nigerians to tap afresh into a warm relationship that dates back into time and before colonial era. For us, our sister has only come home to join us in building our common aspiration," said Dr Aggrey Ntim. (SOURCE: This Day)

'MICROSOFT IS IMPERIALISTIC' SAYS OPEN SOURCE ADVOCATES

Microsoft Corporation's products have been locked out of the on-going World Social Forum (WSF) in Nairobi Kenya. With over 300 computers provided for participants and the press, organizers of the WSF have preferred to provide open source software products and blocked all Microsoft related products for the forum's usage and its related activities.

Participants attending WSF, which for the first time is entirely taking place in an African country say that this was a gesture done as a way of promoting the free social movement at the same time also as a way of fighting Microsoft's 'imperialistic tendencies.'

Activists at the forum also believe that since Microsoft is a corporate brand from the United States of America, a country they believe has intentions of maintaining the status quo of a unipolar world in which it is above international law and the UN, the brand should be locked out.

Anoop Sukumaran of the Focus on the Global South, said that, since one has to pay licenses for any kind of Microsoft 's software, the multinational computer technology corporation is in a way controlling the flow of global information instead of releasing it free without any charge.

Microsoft has no thinking. And the unfortunate thing is that the whole third world including almost all of Africa is being forced to use Microsoft products, through the pretext of these trade treaties like the WIPO and the WTO? Sukumaran says.

The open source movement is providing Linux, a robust free software. Everybody owns it and it can be shared. And this is what WSF is all about - a free society, a movement fighting for ownership of free resources? he adds.

With an annual revenue of over US$44.28 billion as of July 2006, Microsoft develops, manufactures, licenses, and supports a wide range of software products for computing devices.

Participants from the International South Group Network (ISGN) who are advocating for open source software at the WSF are set to give out over 100 free CDs of the kubuntu brand of the open source software here at the forum as a way of fighting Microsoft.

Open source is a conceivable tool of communication, a weapon to fight for ones own right. Users of open source software are (generally) able to view the source code, alter and re-distribute the software.

(SOURCE: HANA)

COURT BATTLES LOOM AS PARTNERS FALL OUT IN SOUTH AFRICA

The joint owners of a software development house have become bitter enemies, with six separate court cases in play as each accuses the other of reneging on agreements and flouting their fiduciary duties. The clash within Authority Online has escalated into all-out litigation, with founder Chris Boyes-Moffatt claiming his business has been hijacked by the partner who invested in the venture and distributes its products.

The litigation demonstrates the risks owners face when they need external funding for their companies, and the problems investors face when they buy into a firm that runs as an ownercontrolled business.

Two cases have been instigated by Boyes-Moffatt against his partner, Deon Botha, and Botha's company, Ultimate Retail Solutions (URS), with a third case being prepared. The affidavits accuse URS of breach of copyright, illegally withholding licence fees paid by customers, flouting fiduciary duties and ignoring the rights of minority shareholders.

But URS has instigated action of its own, claiming it is entitled to the rights of the software's source code, accusing Boyes-Moffatt of defamation, and demanding compensation and a refund of some of its investments.

The battle will run for many months, because a backlog of cases in Pretoria means the hearings will begin only in May next year. The clash centres on the retail and point-of-sale software programs used by about 150 retailers.

Boyes-Moffatt invited Botha and URS to buy 50% of the business and appointed URS to market the software. But Authority Online's revenue began to dry up when URS reneged on a deal to share the licence fees paid by the clients, Boyes-Moffatt claims. He believes he has lost about R2m in licence fees.

He also accuses URS of adapting the source code and rebranding the products. "Putting it crudely, (they) have hijacked the software of which Authority Online is the owner," his affidavit says.

URS denies that allegation, and has yet to submit an answering affidavit. That is a stalling tactic costing Authority Online more money every day, says Boyes-Moffatt, who holds 37,5% of the company.

A second blow came when his co-founder, Andrew Higson-Smith, who holds 12,5%, resigned to join URS. With a total stake of 67,5% Higson-Smith and Botha voted themselves on to the board.

As new directors of the company, they voted to withdraw the litigation accusing URS of breaching the copyright of Authority Online. Boyes-Moffatt describes that as a "blatant and unlawful attempt" to withdraw legal action against themselves, and as a breach of fiduciary duty as the company's directors. He is now preparing action under the Companies Act, which grants protection to minority shareholders.

The legal battle has cost Boyes-Moffatt at least R200000. "I am absolutely not giving up. If you put 12 years of your life into developing something and someone steals it from you, you have to get it back," he said.

Deon Botha of URS declined to comment. But his lawyer, Nic Loubser, says the failure to file opposing affidavits in the copyright case is not a delaying tactic, but because Authority Online has failed to provide documents that URS is entitled to. If Boyes-Moffatt manages to re-instate the copyright infringement case, URS will oppose it, Loubser says. Bowes-Moffatt never obtained the consent of 80% of the shareholders, as required in the Shareholders Agreement, before launching the legal action, Loubser says.

Loubser also says URS has become the rightful owner of the software after Authority Online failed to honour a commitment to support the customers and illegally ended a contract giving URS the distribution rights.

Cases lodged by URS accusing Bowes-Moffatt of making defamatory statements to some clients and requesting the court to rule that URS is now the rightful owner of the software have been given trial dates in May next year. A third case, demanding repayment of expenses incurred by URS, is awaiting a trial date.

(SOURCE: Business Day)

TANZANIAN POLICE STATIONS COMING ON BOARD IN COMPUTERIZATION

Police stations in Arusha region, and probably in the whole of Tanzania are one of the few places where clumsy clicking sounds of archaic manual typewriters could be heard. In preparation to get out of the "stone age" technology, 11 police officers in Arusha recently graduated from a three-month computer course, courtesy of JR Institute based in Sakina.

They were last week awarded with certificates after completing courses in seven computer programmes. They were presented with what is dubbed the " International Computer Driving Licence."

They can now "drive" any computer in the world but the problem is they do not have access to computers at the police station or posts where they are routinely stationed. Just a few bases have one or two pieces.

Efforts however, are now being made to equip police stations with computers. Arusha's Regional Police Commander, Basilio Matei told the Arusha Times that he was liaising with the headquarters in Dar es Salaam to acquire 10 computers for his region, a consignment which is definitely is too small for the force. He said the just ended course was one of the preparation to computerize police stations and posts.

(SOURCE: Arusha Times)

KENYA TO ASSEMBLE CHEAPER COMPUTERS

Kenyans will soon have a cheaper, locally assembled computer. Three local universities and a tertiary institution yesterday signed a memorandum of understanding that will result in Kenya joining nations assembling computers.

The three -University of Nairobi, Jomo Kenyatta University of Agriculture and Technology and Strathmore - will act as incubators of the project. Kenya Technical Training College (KCCT) will be the implementing agency. KTTC has been placed under Communications Commission of Kenya (CCK). The deal was signed at Ministry of Information and Communications headquarters at Teleposta Towers.

The project that follows the Taiwan model is jointly funded by CCK and Safaricom Foundation to the tune of Sh20 million split equally. Communications permanent secretary Bitange Ndemo said the institutions would do research for the components and pass over the findings to local assemblers.

Already, he said, three firms Lenovo, Mecer and Sahara had been appointed to assemble the first 50 computers each, which will be on display at an exhibition to be held at Kenyatta International Conference Centre on February 7. "We narrowed on these three and after six months we shall drop those who do not produce and meet our specifications," Dr Ndemo said. He said the computers, to be called Madaraka, are projected to cost $450 (Sh 31,500) a piece.

The Government removed duties and value added tax (VAT) on imported computers and parts to encourage more Kenyans to embrace Information Communication Technology. Dr Ndemo said the universities would train manpower that would be involved in assembling. Certification will be done before the computers are released to the market.

"The model will be like that of Taiwan where small enterprises are encouraged to produce and certification given before exports," Dr Ndemo said. CCK commissioner general John Waweru said apart from software development the project would grow local expertise to enable the country cope with changes in the ICT sector.

(SOURCE: The Nation)

IN BRIEF:

- Mandriva Linux, the global editor of Linux distribution has incorporated a subsidiary, Mandriva Linux West Africa Limited with headquarters in Lagos. The objective behind the establishment of ICT firm's office in the sub region is to ensure the distribution of Mandriva Linux and other integrated Open Source application in English and French Languages throughout the West African region.

- Microsoft West, East & Central Africa (WECA) has denied claims that the software vendor has entered into a development agreement with Afrosoft, a Zimbabwean software developer. An article that appeared in the local Press last December detailed an apparent deal between Microsoft and Afrosoft, stating, among other claims, that the latter had been contracted to develop software for the former in a five-year deal worth US$80 million.

- Since 2002, the El Ghazala technological park, one of Tunisia 's major technological parks specializing in ICT's , has doubled its volume of activities. The number of enterprises has grown from 25 units in 2002 to 51 in 2006. This growth has been concomitant with an increase of recruitment of a highly skilled labor force. The number of employed has significantly increased from 517 in 2002 to 1200 in 2006.

AFRICAN TELECOMS WINS AFRICAN LAKES BID WITH INCREASED CASH OFFER

Last Friday African Telecoms Company announced that its increased cash offer had secured it control of 52.66% of African Lakes. The revised offer of £18.50 in cash per share values the existing issued ordinary share capital of the company at £5.04 million.

Commenting on the revised offer, Richard Bell, Director of African Telecoms Company said:”The revised offer of £18.50 per share in cash represents a significant increase over our original offer and I am delighted that it has won the support of African Lakes’ major institutional shareholder. We are looking forward to implementing our exciting plans for building a pan-African ICT infrastructure.”

Telkom has refused to say whether it was bidding for the company: “The reports linking Telkom SA as a bidder for Africa Online are speculative and Telkom will not comment on media speculation,” the fixed-line operator told ITWeb. The company has not really got the hang of media relations as it was actually the competitor bidder for company. It was seeking to secure an irrevocable share offer but was clearly unable to convince the company’s biggest institutional shareholder. Comment on its acquisition plans for African Lakes were universally sceptical and hostile in South Africa.

In a further blow to its acquisition plans, it has been unable to agree a price with Uganda’s incumbent utl and it now longer has an exclusivity on the deal. The company will actually have to succeed with one of its acquisitions soon or potential acquisitions will lose faith in its ability to close any deal.

MTC TARGETS 70 MILLION SUBS AND US$6 BILLION EBITDA BY 2011

Twenty operations of the MTC Group are this week meeting in Tanzania to discuss the operator’s new growth strategy – ACE (acceleration, consolidation, expansion).

ACE will be the group's driving force to position it to take on the challenges of globalisation. Through implementation of the ACE strategy, MTC’s new goals by the year 2011 are to become a company with a market capitalisation of US$30 billion, exceeding 70 million customers and to attain a US$6 Billion EBITDA. In the nine months to end-September 2006 MTC recorded consolidated revenues of US$2.92 billion and consolidated EBITDA of US$1.43 billion, representing a margin of 49%.

“We value our customers in Africa and having this event here reinforces the commitment we have to the continent, which is central to our strategy. Africa is important to us, having invested more than US$6 billion in less than two years on the continent since we acquired Celtel International,” commented Saad Al Barrak, MTC Group managing director.

(SOURCE: ITP)

MAROC TELECOM’S ANNUAL REVENUES UP 10.1%

Maroc Telecom 2006 consolidated revenues increased 10.1% to 22,615 MAD due to the good performances of all its business activities. 2006 fourth quarter consolidated revenues increased 5.1% to 5,532 MAD million. Revenues growth was mitigated by a one-off 109 MAD million reassessment of the inactivated prepaid cards at Maroc Telecom dealers. Excluding this non-recurring item, revenues rose 7.2%. According to Abdeslam Ahizoune, Chairman of the Management Board, “2006 was an excellent year for Maroc Telecom. Across all our activities, market reacted positively to our innovative offers, so much so that, one more time, revenues growth exceeded our expectations.”

2006 Fixed-line and Internet gross revenues amounted to 12,613 MAD million, up 5.6%.This growth was achieved thanks to the robust momentum of the public telephony segment (revenues rose almost 15%), incoming international traffic growth (+11%), advance of broadband Internet activity and data services provided to corporate customers and telecom operators (revenues were up 13%), stimulated by price cuts. The average voice bill per customer increased almost 3%. The Fixed-line customer base decreased to nearly 1.27 million of lines, down 5.6% compared to December 2005, while the ADSL customer base is still soaring, standing at nearly 384,000 lines at year-end (+142,000 lines i.e. +59% year-on-year). Fourth quarter Fixed-line and Internet gross(1) revenues, which no more benefited from the pricing adjustment implemented during the 2005 last quarter grew 3.5% to 3,198 MAD million.

2006 Mobile business gross revenues amounted to 14,684 MAD million, up 15,0%. The strong growth of the customer base reaching nearly 10.71 million customers, +30% and a net increase of nearly 2.5 million customers over the year, drove the positive stance of revenues. 2006 blended ARPU amounted to 111.0 MAD, down 9.3% compared to 2005, in the context of strong customer base growth and average call price decrease. Fourth quarter ARPU remained stable compared to the previous one. With the impacts of year-end promotions and the reassessment of the inactivated prepaid cards at dealers, fourth quarter ARPU was down 13.1%. The churn rate reached 20.3% (+8.1 points year on year) due to customer base growth and access fees decrease. Fourth quarter Mobile gross revenues grew 9.9% compared to 2005 and reached 3,563 MAD million, due to the impacts of year-end promotions and of the reassessment of the inactivated prepaid cards at dealers. Excluding this last item, revenues increased 13.3%.

At the same Maroc Telecom announced the results for its operation in Mauritania. 2006 gross revenues of Mauritel Fixed-line business amounted to 309 MAD million, down 6.9%, with a customer base of 37,447 lines, down 6.4%. During the same period, Mauritel Mobiles gross revenues reached 688 MAD million, up 19.9%, with a customer base of 601,221 customers, up 29.2%.

DBSA GRANTS R484M LOAN TO NEXUS TO HELP ROLL OUT NEOTEL

Neotel has received additional funding of R484 million to add to the R2 billion loan granted last month to the second national fixed-line telephone operator. The new loan was secured by empowerment shareholder Nexus, which holds a 19 percent stake in Telkom's only competitor, from the Development Bank of Southern Africa (DBSA).

The money will be used to build infrastructure to enable Neotel to launch full-scale services to compete with Telkom. Neotel won the second network operator licence three years ago and officially launched last August.

The DBSA, Industrial Development Corporation, Nedbank and Investec granted Neotel a R2 billion loan facility last year. The same financiers will arrange an additional long-term loan of R4 billion after 12 months.

Neotel said it would need a total of R8.5 billion, made up of 60 percent debt and 40 percent equity, to build its network over the next five years. Its shareholders, which include Eskom, Transtel, Tata, Two Consortium and Communitel, are expected to pump cash into Neotel.

Neotel spokesperson Mala Suriah said the finance was "currently being organised". She did not comment on how much its shareholders had contributed so far. Nexus chairman Kennedy Memani said yesterday that the R484 million loan would be repaid partly from dividends when Neotel started making profit in the next three to five years.

Suriah said Neotel was "on track to launch services in a phased approach to the enterprise and corporate markets. The first of these services will be available later this quarter." Neotel's roll-out plans include implementing wireless services for the residential market, as there is no clarification on whether it will get access to Telkom's last mile, the telephone cable linking homes and offices to the network.

The allocation of the 800 megahertz spectrum by the Independent Communications Authority of SA (Icasa) will make it possible for Neotel to roll out services without having to invest in underground cables. Icasa has indicated that it would allocate the spectrum, which is used for broadcasting, to telecommunications operators. Suriah said Neotel was in the process of providing Icasa with additional information the regulator had requested. She expected the spectrum to be allocated shortly.

(SOURCE: Business Report)

NASPERS SOARS ON NEWS OF BIG RUSSIAN INTERNET DEAL

Naspers' stock powered to a new record yesterday, as the media company struck it third time lucky in Russia by nailing down a $165m deal to buy into the country's largest internet portal.

This is a crucial step for Naspers' strategy to expand into fast-growing emerging markets, considering it has pinned its future growth on investments in Brazil, Russia, China, India and Africa.

Last year, Naspers spent $422m buying 30% of Brazil's largest magazine publishing house, Abril, adding to its investment in China's instant messaging business Tencent and its fledgling investment in India's competitive internet sector.

Naspers investor relations spokeswoman Beverley Branford says that now that her company has its foot in the door in Russia, it is eyeing other opportunities in the pay-television and newspaper sector in that country. "There are many companies we're talking to right now in many different countries, some of which are still in an exploratory stage," she says.

This week's deal saw Naspers buy 30% of mail.ru, a Russian internet portal that offers e-mail, blogs, video sharing and news, and which attracts more than 24-million Russians every month, according to estimates. On that news, Naspers' shares climbed 2,4% yesterday on the JSE to hit R177,76.

But Antonie Roux, CEO of Naspers' Internet operations, says the deal is as much about getting a foothold in the Russian economy as it is about mail.ru. "The Russian economy has been growing at 7% for the past few years. Internet penetration in the US is 64%, and in China it is 8%. But in Russia, internet penetration is 13% and growing fast," he says.

Roux says that when it comes to Naspers' two-and-a-half-year-old Indian internet venture, the company has a five-year plan to make significant inroads into that country, which has the fastest-growing internet population in the world. "We talk of it being a few years before we reach break-even in India," he says.

Overall, Naspers' internet division made operating losses last year of R153m amid an overall operating profit of more than R3bn, a figure that reflects the company's investment in Internet assets around the world. There is little sign of further expansion in Africa as its current companies – particularly in Nigeria – have shown only modest growth.

(SOURCE: Business Day)

MWEB ONLINE CHRISTMAS SHOPPING UP BY 800% IN TWO YEARS

South Africans are shopping up a storm online, and particularly over the Christmas season. Figures from MWEB's 320 SafeShop-enabled Web sites show that for the period 1 November to 31 December 2006, some R243m was spent online, compared with just R26m in 2004, an increase of 837%. Furthermore, the number of transactions during this period increased from 38,902 in 2004, to 241,438 in 2006 – a 520% increase.

Anton Gaylard, GM for ISP at MWEB Business, says that while airline ticket purchases represented the majority of online transactions, SA’s leading online florist showed a 113% increase in sales, and online grocery shopping showed a 20% increase over the same period two years ago.

“We attribute the growth in online sales to several factors,” says Gaylard. “First, South Africans are becoming more and more comfortable with purchasing online and are happy with the safety and security of the process. This means they are also spending larger amounts per transaction, as we can see with the 51% increase in the average transaction amount from R668 to R1 010 over the two years.

“Secondly, businesses are realising the additional revenue that can be gained from online transactions, and are improving the quality of their e-commerce enabled Web sites. In addition, more and more smaller businesses are seeing the benefits of online shopping, which means that there are now more companies offering their products for purchase online.

“Finally, because consumers are also able to do research prior to making a purchasing decision, online Christmas shopping is a much simpler and less time-consuming process than comparing stores physically. In the busiest time of the year, this is a valuable aspect, which saves time and effort. Most Web sites list product features and comparisons, and prospective buyers are able to evaluate various products by simply launching their Web browsers.”

Gaylard added that Christmas sales are also making up a larger proportion of annual online sales than before. In 2006, MWEB’s SafeShop-enabled sites recorded some R865m in annual sales, of which 28% were Christmas purchases. This is compared with annual sales of R157m in 2004, of which 16% were recorded during the Christmas period.

(SOURCE: ICT World)

'MADE FOR MOBILE' MOVIES GET SPONSORSHIP FROM ROAMWARE

A project to develop short films specifically for viewing on a cellphone has won the sponsorship of Roamware, a global leader in mobile roaming technology.

Roamware will finance the short film project being staged by Sundance Film Festival and the GSM Association, which have commissioned five "made for mobile" movies from independent film makers. The GSM Association hopes the five films will eventually enjoy a larger audience via cellphones than any other form of cinematic entertainment has achieved so far.

The films will debut at the 3GSM World Congress in Barcelona in February, the world's largest annual cellphone event, and will be available for downloading to cellphones in a variety of ways.

"We're honoured to be part of the Sundance Institute's exciting vision of how artistic short films can gain a greater audience through the mobile phone," said Roamware CEO Bobby Srinivasan.

He believes the distribution of films will become an everyday part of the cellphone experience. "When you then add the ability to share all the related content about the film such as reviews, user commentaries, music and messaging during a phone call, you've created a unique and powerful experience for that movie audience," Srinivasan said. Roamware sells multimedia roaming services to about 250 cellular networks in 100 countries, including Vodafone, a 50% shareholder in SA's Vodacom.

(SOURCE: Business Day)

KENYAN MUSIC FANS TAP INTO THE POWER OF THE NET

The scene is a familiar one all over Nairobi radio stations at around 10am - an artiste walks into the station, waits patiently in line before dropping his album at the reception. "Make sure it gets airplay, Shaffie," begs the musician. Then, he or she leaves, praying and hoping that the song gets some airtime. Some songs make it on air, some don't; a few get a little airplay while others end up in the bin. Yet artistes never seem to give up. Radio is the one place every musician would love to make it - the video can come later. Having people call up and request your song is every artiste's dream but that doesn't happen very often, does it?

Unbeknown to some is the great potential of the worldwide web. In 2001, 20-year-old Richard Njau aka Aster, a Kenyan student in South Africa, decided to start a site with friends that would showcase the Kenyan party scenes. The site grew to include pictures posted from young Kenyans from all over the world, as well as downloadable Kenyan music. Now a born-again gospel musician/producer Aster says that at the time it was just some fun. "I wanted to bring Kenyan music to the fans" he says, adding that CMB Prezzo began making his presence felt for the first time online "He would give me music to put on my site, it wasn't all pirated. Other musicians like Vinnie Banton, Mr Googz and Michelle also gave me music to upload on my site." Surprisingly, it wasn't the artistes who complained about online pirating but the fans.

"I did put up a lot of music without permission until the fans abroad started complaining, saying we all need to support our Kenyan artistes". Aster and friends came to Kenya and bought a couple of CDs including Ogopa 1, E-Sir debut album, Nimefika, and Necessary Noize's first album, NNI.

"At the time, Ogopa was the in-thing but we were going at a loss, and the demand was too much." They later shut down after missing their site renewal date and someone else bought the name.

"A lot of artistes fear piracy and cost when it comes to marketing themselves online, costs range from Sh2,000 to even Sh1,000,000 depending on what you want to have, it doesn't have to be too expensive," says web designer and CEO of web development company I-nnovative Limited, George Ikua.

"What makes a website is not the actual structure but the content," he adds.

Ikua says the reason many artistes are afraid to follow this avenue is because there are very few Internet users in Kenya and this means the market is quite limited.

All is not lost though, artistes are now realising the potential of having an online presence. Didge says that currently, e-commerce is where record sales happen.

"Internet is accessible in all countries and this gives you more exposure internationally."

He adds that his manager, Buddha Blaze, is currently working on his profile on myspace.com.

Big Pin also sees the advantages of having music online and looks forward to launching his website that is currently under construction. "It will be a way for me to communicate with my fans, let them know about shows and my music and goals," he says.

Websites have in essence helped bring the artistes closer to fans all over the world.

Singer Alicia Keys has an online diary that enables her to tell her fans about what she is doing and where she is. It is also not unheard of for artistes to go online and chat to fans on their sites. Whether or not local artistes will catch on is a test in itself. "Local artistes don't look further than Nairobi; they lack the vision to think beyond the local market," says Astar.

"Having your music online is like having another outlet selling your music. Like instead of just selling only at Nakumatt, your product can also be found in Uchumi," he adds.

For the Kleptomaniax, the Internet is yet another tool to reach their audience. "Having a website has helped create awareness of our music abroad," says Collo of Kleptomaniax. "We don't just sell our music online, but also videos and merchandise". The group sells their music though mymusic.co.ke and the Ogopa website that offers a link to their site.

"The awareness created by having our music online has had a great impact on our fans abroad, such that we are able to sell our CDs when we go there. I wouldn't cry over sales here since there's really no clientele compared to fans abroad. In the UK, we sell our albums for £15 (Sh1,080) at shows and people buy them, in Kenya we have to lower the price," he says.

As for the fear of piracy, Collo has a few words of wisdom " It happens! You just have to take it like a man (or woman!)" There are certain advantages to having a website though.

"There are over one billion people online per day in the world, and you are not restricted by location. It's just too big a market to ignore, " says Collo adding that artistes should definitely try marketing themselves online, as it would bring a level of seriousness to what they do. "You can form fan clubs and get feedback from your fans, and it makes it a business which is what entertainment is."

Some international artistes have taken advantage of this and released their music online to high acclaim before releasing to radio stations. This, in essence, takes away the power of radio over artistes, bringing them closer to the consumer and letting the consumer decide whether or not they like a song.

Myspace.com is an Internet service that lets the user create a page that lets you network, meet friends or create blogs for free. My space/music is a space where up-and-coming or famous musicians can display their music and videos and create blogs as well as tell people about upcoming shows. This idea is popular with Kenyans artists with Necessary Noize, Jua Cali, Redsan, Bamboo, Mercy Myra, Maleek and Attitude, among others, having user profiles on myspace.com/music.

As they are all catering for an international market it is interesting to note how they present themselves. Bamboo calls himself the African rap king, while the Jua Cali profile reads like a charming school composition.

The site, which is currently the fourth most popular English language website, does not interfere with the ownership rights of the users and it is up to the individual to use the site as they wish. The artiste decides whether or not their tunes will be downloaded.

Myspace.com has also helped create celebrities overnight. Through myspace.com, people are able to let others in on their activities, album releases and events. English band Arctic Monkeys owe some of their success to the publicity they garnered through myspace.com. The band was not even aware of the site saying that the site was originally created by fans. Another English singer, Lilly Allen, can attribute part of her popularity to placing her unreleased music on myspace.com where thousands of would be fans accessed the songs. She currently has 115,347 "friends" on her profile.

A popular site that allows users to post videos and visitors to view the videos. The videos range from those of famous musicians such as Beyonce, Erykah Badu to amature videos such as Zimbabwean girl Violet Moyo's remix of Gnarls Berkeley Crazy. Youtube gained fast popularity due to myspace.com users who placed "youtube" videos in their space profiles. Myspace.com spotted this as rivalry and quickly moved to ban youtube.com videos from its user profiles, a ban that was later lifted after its own users protested. Youtube.com is now one of the fastest growing websites in the world even overtaking myspace.com. However, no Kenyan artiste has posted their videos on this site.

(SOURCE: The East African Standard)

IN BRIEF:

- The Nairobi Water and Sewerage Company (NWSC) has launched its website. Water consumers will now be able to check their bills online at www.nairobiwater.co.ke. They will also be able to download application forms for water services, report corrupt cases for quick action and catch up with news and events of the company.

PEOPLE

* Datatec has announced the appointment of Stephen Davidson as a non-executive director with effect from 1 February 2007.

* Morshid Mohamed has been appointed as the new CEO of Onatel and Telmob, the mobile arm of the Burkina-Faso recently privatised national incumbent.

EVENTS

- DIGITAL BROADCASTING SWITCHOVER FORUM 2007
29th January – 1st February 2007.
InterContinental Sandton Sun & Towers, Sandton Johannesburg, South Africa
Hosted by ICASA and organised by the CTO the digital switch-over forum will have meeting with regulators, policy makers and senior level decision makers from across the pan-African broadcasting industry.
For further information visit www.cto.int

- VOIP HALF-DAY CONFERENCE
31 January 2007,
ape Town International Convention Centre
CallingtheCape presents a half-day conference in which leading local and international contact centres and independent consultants will advise you how to reduce your phonebills.
For further information visit www.callingthecape.org.za

* MEETING AFRICA’S BANKING NEEDS: WORLD-CLASS OR ALL-CLASS BANKING SYSTEMS?”
5-8 February 2007,
Nairobi, Kenya
The African Banking Technology Conference will provide the region’s banking community with in-depth briefings from African and international experts that will enable them to assess latest banking technology systems and strategies to achieve an effective and profitable balance.
For further information visit www.aitecafrica.com

- BROADBAND SUMMIT 2007
26-27 February 2007,
Southern Sun, Grayston, South Africa
South Africa faces a huge broadband demand, from all sides. However, the broadband access media and business strategies in South Africa still do not resemble the international standards. In order to reach these standards you as ISPs, mobile and/or fixed operators, need to assess the current and future potential of the African broadband market.
For further information visit http://www.iir-conferences.co.za/eventInfo.php?e=1202

- SMB ROADSHOW 2007 - MIDDLE EAST AND AFRICA
26th March 2007,
Nile Hilton, Cairo, Egypt.
IDC's SMB Roadshow provides a comprehensive and trustworthy platform for discussing strategic IT issues directly impacting the SMB sector. Debate led by recognised experts and based on best practices and sound technology analysis provide objective and critical insights required by leaders in this sector. This event will target IT decision makers - by vertical industry sector - within SMBs across the region.
For further information visit http://www.idc-cema.com/events/smbeg07

- 1stWEST AFRICAN E-CONTENT SUMMIT
4-7 April 2007 –
Cotonou, Benin
This ICT symposium expects to launch the official discussions to establish the “Panafrican Agency for New Media, advocated to provide training courses in new media management for young people in Africa in to bridge the content gap.
For further information visit http://www.icnm.net/

- eLEARNING AFRICA 2007
28-30th May 2007,
Kenyatta International Conference Centre, Nairobi, Kenya
The subject is Building Infrastructures and Capacities to Reach out to the Whole of Africa, reflecting the significant efforts of African countries to set up their national and regional ICT infrastructures to create access to education, training and services for all.
For further information visit www.icwe.net or call +49-30-327 6140

- ICTS FOR CIVIL SOCIETY CONFERENCE
June 2007 – South Africa
The conference and exhibition organised by SANGONeT will be aimed at increasing NGOs’ awareness of the strategic importance of their websites and the online environment in general.
For further information visit http://sangonet.org.za

- TELECOMS WORLD AFRICA
31st July - 2nd August 2007,
Johannesburg, South Africa
Key decision-makers in South Africa and leading international players will share their expertise and forge invaluable business relationships in a highly interactive environment.
For further information visit www.terrapinn.com/2007/telecomza

- WI-WORLD AFRICA 2007
27 – 30 August 2007,
Michelangelo Hotel, Johannesburg, South Africa.
In Africa, fixed-line infrastructure is lacking and there is a major problem with copper wire theft. Wireless communication is therefore a great alternative.
For further information visit www.terrapinn.com/2007/telecomza

JOBS AND OPPORTUNITIES

* CUSTOMER PROJECT MANAGER – SOUTH AFRICA
The company requires the skills of a Senior Customer Project Manager, with expertise in the following fields: CPM Broadband access equipment, Knowledge in Marconi Equipment, Good Admin, Project Management and Customer relation skills.
For further information contact advertising@balancingact-africa.com

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