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WEEKLY PUBLICATION DEADLINE: 12 pm GMT Sunday. ISSUE NO 378 Rules of the game changing as DSL subs head for 1 million and international fibre prices fall to all-time lowAlmost unnoticed the rules of the game are changing and the South African market shows key developments that will transform how markets operate. DSL subscribers there look set to break through the “critical mass” barrier and there are irresistible pressures building up for low prices and no caps. Alongside this development, SAT3 bandwidth prices are now nearly down to the critical US$1000 a meg for volume buyers. Russell Southwood looks at why this is a moment of change for South Africa and how it will also be something that affects the rest of the continent. Speaking at this week’s Media and Broadcast Congress in Johannesburg, Rudolph Muller of Mybroadband told conference participants that broadband subscriber levels had reached just over 700,000. He predicted that they would reach 1 million in 12 months and 2 million in 2 years as prices came down, capacities went up and restrictions were removed. Another small straw in the wind is that there were recently 700,000 downloads on the dsTV site after a recent Big Brother programme. Small, you might say alongside the scale of the continent’s population but massive against what was believed possible 3-5 years ago. The revenue drivers in this market comes from two sources: subscriber income and advertising. Once the South African Internet heads for the millions, it becomes another media through which to address people. Growth will be significant as it starts from such a low point. For as South African media owner Prakash Desai, CEO, Johnnic pointed out:”99.9% of revenues are offline. The Internet doesn’t feature.” Outside of South Africa, the same will occur when the medium attracts 100,000 plus subscribers. For how many African newspapers have that kind of circulation? The second development of considerable significance is that for large volume purchasers in South Africa, international fibre bandwidth prices have come down to all-time lows and are very close to the US$1000 mark. As predicted from experience in Kenya after VoIP legalisation, the arbitrage in the system moves from the international to national pricing. The international prices referred to above are for Sessimbra to Johannesburg and these are now slightly cheaper than equivalent prices for Johannesburg to Cape Town. This is no longer sustainable in anything that resembles a competitive market. This must put pressure on Telkom to lower national trunking rates as it enters into intense competition with the new influx of infrastructure providers. Its strategy appears to be to make larger reductions in national rather than local prices, thus reducing the margins available to the new entrants. Between 2001-2006, it has reduced national rates between 20-40% (depending on volume) against only 10% for local rates. Obviously this rate is not available to smaller users and SAT3 bandwidth will become limited as the impact of these prices kick-in. However, the news that this has occurred will put pressure on all the monopoly telco providers in Africa along the SAT3 cable. For South Africa has now come down to the kinds of levels offered by Senegal’s Sonatal and Cote d’Ivoire Telecom. Others must surely follow even if it takes another 12 months for them to migrate prices down wards. The fog is beginning lift on the confusing array of fibre projects. The South African Government has two international fibre projects, both claiming they will build fibres both up the west and the east coast. The DTI has set up Infraco and has just appointed consultants to bring the project about. Meanwhile there is the DoC’s project with NEPAD: contrary to past spin, this has little to do with the few signatories of the NEPAD protocol. Seventy per cent of the funding is now going to come from Bihari, which looks likely to agree to put up 70% of the funding. As one industry insider put it, “the DoC are backtracking on the original announcement and are all over the place.” 70% foreign ownership does not quite seem to fit the Minister’s original requirement for South African ownership. Meanwhile it looks likely that when Seacom is financed it will have majority African funding. Those who should know say that the DoC/NEPAD project will be quietly folded into the DTI project and that only the west coast route will be built. Operators also seem confident that Government will deal with the SAT3 monopoly issue and allow them to co-locate at the landing station. Telkom itself is apparently already putting aside a building there where this will happen. Ironically, the third development that will create “market changing” pressures is the launch of Telkom Media. Having assiduously talked IP-TV and interactivity as its differentiator, its parent company now has to deliver the means through which it can be delivered. Telkom, the telephone company has been struggling to keep up with the pace of DSL growth. Whilst it is currently offering 4 mbps, Mybroadband tests show that average achieved speeds are 343 kbps. This will only allow a limited number of IP-TV offerings. Telkom Media will need much higher speeds to make IP-TV work in the way it has been promoting it: at least, 1-2 gbps will be needed and it will need to stop ratioing bandwidth through capping use. In case, the future is behind schedile, it has taken a side-bet by also having a satellite offer ready if ADSL 2 not available within its time scale. However, Telkom is busy rolling out ADSL2 as quickly as its workforce and contractors will manage it. Telkom Media will also brand itself differently to get away from the stigma attaching to its parent company with consumers. The fourth development of real significance is the arrival of competition at the national infrastructure level that will help drive down national transmission costs. Although Telkom has looked like a financially impregnable company, there is nothing but bad road ahead. It is bleeding key staff to MTN and Vodacom who are gearing up to become infrastructure players. The roll-out of DSL is not going fast enough and it is now relying on managed service contractors in key areas. Furthermore Telkom will soon be turned upside down. Vodafone will buy out Telkom’s shareolding in Vodacom for a large sum. And as this constitutes large part of its income (50%) and capital value, it will then be a considerably smaller company facing major competition in its remaining retail and wholesale markets. Despite serious competition issues, there is high-level political backing for the MTN deal which would see MTN acquire its wholesale and data services as Government wants MTN to become the “African champion”. The perception in Government is that Telkom doesn’t have the management or skills to play this role. The previous CEO was got rid of because it was seen that he had failed to get to grips with the fact that he was running a telco. His frankness about this when he started was refreshing but wore thin as time went by. Also Telkom’s failure to acquire African assets at any speed must also have played a part in this disillusionment with its former favourite son. So everybody is now rushing into infrastructure and the vertical integrators (of which Vodacom will become one) will offer triple and quad play. Telkom will probably now face nine competitors. The traditional contenders will be: MTN, Vodacom, Neotel, and Sentech (that has already decided to get out of the retail space). Possible insurgents contenders will include: MWeb, IS, Verizon and Datapro. Rumour has it that after the recent issue of Wi-MAX spectrum that there is enough remaining spectrum for 4 players Neotel’s retail launch will take place in March/April of next year and it is working on a triple/quad play product. MTN’s fibre infrastructure tender closed this week and prior to this, it had already started rolling out in the wealthier metro areas. Its strategy is clear: either it will provision more cheaply or its entrance into the market will cause Telkom to lower its prices. Either way prices will be reduced and it can stop investing in fibre once it has established a basic network, leaving Telkom to supply more marginal areas. Obviously Vodacom is heading in the same direction and wants to become a vertically integrated provider. It has already done a deal with DSTV. At the moment it is simply a reseller, but in the future? It is hard to believe that it will make sufficient margins on its TV offer if it remains a reseller. With Vodafone purchase of Vodacom almost certain to go through, the parent company will find itself in the unusual position of watching its South African operation to see what lessons it can learn for the rest of the group about the roll-out of converged services. Whilst transmission costs are only 10% of most operators’ voice operations, they are 50% of data costs so they have to get this right. The market is unlikely to sustain nine infrastructure players but this flurry of competition will open up the VoIP market, lower national prices and grow the user base for a wider range of services. And what’s not to like about that?
Sub-Saharan Cellular Networks to get US$50 investment boostA combined $50bn will be invested in cellular networks in sub-Saharan Africa over the next five years, doubling an already rapid rate of investment. The figure has been calculated by collating the investment commitments of operators including MTN, the largest player in Africa, as well as Vodacom, Orange and Celtel and numerous smaller players. The figure has be announced by the GSM Association (GSMA) at the United Nation's Connect Africa conference in Rwanda. "That's an average of $10bn a year going into new infrastructure which will literally double the rate at which investments have been made in the previous five years," said Tom Phillips, GSMA chief officer for government and regulatory affairs. For most rural and remote parts of Africa, cellular networks provide the only way for people to make calls or send data because of the dearth of fixed-line phones. Almost 70% of the population in sub-Saharan Africa is now covered by a cellular network, although a far smaller percentage can actually afford to use the service. In some countries fewer than 5% of the population has a cellphone. Of the 500-million people living in catchment areas, only a third, or 150-million, can afford to be a customer. The GSMA used the conference to put pressure on attending heads of state and ministers to play their part in the cellular evolution. The investments were not conditional on policy and regulatory changes by governments, but were highly dependent on that, Phillips said. The association would call for reductions in tax and import duties and for regulations that encouraged foreign investments. Some governments still taxed handsets as a luxury item, which put the cost of a cellphone out of reach for many people. The GSMA would also urge governments to open up the bottlenecks where telecoms operators or facilities were still state-owned. Some governments were talking about re-nationalising telecoms assets because they saw them as a lucrative source of income, but that was a retrogressive step, he said. He was not aware of a plan by SA's communications department to prevent undersea telecoms cables from landing in SA and bringing bandwidth to the county unless they were majority African-owned. That sounded like "the worst kind of protectionism" and sent the wrong message to investors, he said. He cited the recent action of Benin's government as another bad example, where MTN's network was switched off because it refused to pay a backdated 600% hike in its licence fee. (Source: Business Day) MTN Group reveals strong 3Q subscriber growthMTN's share price was climbing again yesterday in line with a relentless rise in subscriber numbers, with the cellular giant signing up 5.8-million more customers in the past three months. Its networks serve 54,1-million people in 21 countries, making it the largest operator in Africa and the Middle East. MTN gets more than 64000 new users a day. The counter opened at R123 and touched a R126.98 high last week after September quarter figures showed its subscribers had jumped 12% since June. MTN's South African network is a cornerstone of its activities, with subscribers rising 3% to 14-million. Each contributes an average of R146 a month, 1% more than in the previous September quarter. Nigeria is MTN's other cash cow, with 14,9-million customers each spending an average of $17 a month. That represents a 7% increase in customers and a healthy 4% rise in their spending. To avert any decline in Nigeria due to troublesome network quality and capacity issues, MTN is investing heavily in improving infrastructure and coping with the ceaseless demand. The Middle East and North Africa region saw 36% growth in customers as its new Iranian network stepped up activity and won 1,7-million more users. Irancell serves 3,7-million people, each spending an average of $11 a month. MTN CEO Phuthuma Nhleko said he was pleased with the steady growth in subscribers, especially in Iran where the business launched in earnest in January. Its Benin network was silenced when authorities demanded a 500% backdated hike in the licence fee. This took a slice off performance there. Subscriber numbers fell 1% while average revenue per user fell from $15 to $11. But as Benin had only about 500000 customers the loss was unlikely to inflict long-term harm. Customer loss was probably kept to a minimum as rival Atlantique Telecom was also switched off in July, leaving users a choice of two smaller networks. In September, President Thabo Mbeki and Benin's President Thomas Boni Yayi brokered a deal for MTN to pay $60m for a 10-year licence. (Source: Business Day) Senegal’s second mobile operator Tigo Bounces BackFollowing the loss of 58k customers in Q2 as a result of the customer registration programme, the Senegalese mobile market recovered somewhat in Q3, posting a net gain of 115k customers. However, this represents just 3.5% growth on a quarterly basis (compared to 19.0% in Q3 2006) and in real terms it is the smallest figure for net additions in the past three years. Clearly the effects of the legislation requiring all customers to register their details with their operator are still being felt. Orange Senegal (Sonatel) took the brunt of the losses in Q2 and it continued to suffer in Q3 with just 42k net additions, its lowest figure for two years. In fact, its customer base at the end of Q3 was still below what it was at the end of Q1. Rival operator Tigo (Sentel) was much less affected by the new legislation with a loss of fewer than 5k customers, and it bounced back in Q3 with 73k net additions, a quarterly growth rate of 7.9% compared to Orange's 1.7%. Indeed, Q3 2007 was the first quarter since Q3 2005 in which Tigo recorded a higher number of new connections than Orange. Despite this impressive result, Tigo is still very much the smaller of Senegal's operators with market share of 28.9% at the end of Q3. This represents an improvement of 1.6pp since the end of the first quarter, but its market share is still 5.0pp lower than it was at the end of Q3 2006. For the time being there appears to be little prospect of any significant change in the Senegalese market, with Orange on 2.44m customers and Tigo on 0.99m. However, there may be a shake-up in the not too distant future: in September, Sudanese operator Sudatel was awarded the country's third mobile licence by the Senegalese regulator, the ARTP. Although at this stage it is unclear when Sudatel is likely to launch its network, it is possible that Senegal will become a three-player market by the end of 2008. With penetration at 27.8%, there is ample room for further growth. Furthermore, in the majority of cases a well-funded third entrant has an energising effect on the market in general; we will therefore monitor Sudatel's progress with a great deal of interest. (Source: Cellular news) Yar'Adua's Insistence on NigComSat Mobile Licence Throws Spanner on Free EnterprisePresident Umar Yar'Adua, last week deepened the mobile licence row between the Nigeria Communication Satellite (NigComSat) Limited and Nigerian Communications Commission (NCC) by ordering the regulatory agency to "immediately" grant a mobile operating licence to the satellite company. The Nigerian Satellite firm has been embroiled in tug-of-war public altercation over the issue of mobile operating frequency and licence following the launching of its NigComSat-1 communication satellite with Chinese technical partnership last May. It claimed former President Olusegun Obasanjo, granted it an express mobile operating licence on the eve of his departure last May. The NigComSat management argued that with its technical expertise and available facilities, the company was in a better position to offer better mobile services than the public is presently getting from the existing four major operators. Ernest Ndukwe, Executive Vice Chairman & CEO of NCC, rebuffed the Satellite firm's claims insisting it has no mandate to offer 'last mile' mobile services. A committee set up by the Ministries of Information and Communication, and Science and Technology recommended that NigComSat did the right thing by going private before applying for a licence. "It is pertinent to note that with the approval of the Federal Executive Council, the adoption and publication of the National Telecoms Policy (NTP), the Nigerian Government firmly resolved to liberalise the telecommunications market and promote competition. One of the policy objectives of the NTP was the restructuring and privatization of NITEL and M-TEL by the divestment of majority shares owned by the government to the private sector. This has been achieved by the sale of a substantial portion of government interest in NITEL and M-TEL to Transcorp". The argument didn't sit well with the NigComSat officials who easily pointed to the licence granted Abu Dhabi based Mobadala Trading Company early in the year for $400 million. They insisted that Mobadala, a UAE government owned company was not a telecom operator but still got a licence from NCC. NigComSat viewed that as 'double' speak. However, this line of argument is punctured because Mobadala came into Nigeria under a bi-laterial trade agreement between both governments in Abuja and Abu Dhabi. Ahmed Rufai, Managing Director of NigComSat believes the company was better placed to not only offer last mile mobile services, and insisted it would also be in position to offer rural telephony which the existing operators promised but are not yet offering. He had argued that NigComSat mobile operation would be devoid of the current poor QoS experienced on existing operators. Mr. Niyi Ibietan, Head, Corporate Communications of NigComSat Ltd stated last week in Abuja that the letter from President Yar'Adua, to the Minister of Science and Technology Mrs. Grace Ekpiwhre, conveying the directive has been delivered to its chief executive, Rufai. Part of President Yar'Adua's directive to the NCC stated that the "Ministry of Science and Technology is to liaise with the NCC to implement the directive." Ibietan expressed appreciation of the satellite firm's management to the president's directive. "The management of NigComSat remains thankful to all practitioners of mass communication and other stakeholders for their rational articulations in defence of our position". (Source: Vanguard)
IN BRIEF:- President Kibaki's re-election campaign team has unveiled an electronic fundraising drive using a mobile telephony. Contributors to the presidential kitty will have an option of sending their views on the campaign through a premium SMS on Safaricom. The cost of a text message is Sh20, which is Sh15 above the normal rate. - Grameen Foundation and the International Telecommunications Union (ITU) have launched the Village Phone Direct Manual to guide microfinance institutions and other organizations in developing microfranchise Village Phone operations. More information can be found on www.villagephonedirect.org TELECOMS, RATES, OFFERS AND COVERAGE- In Rwanda, MTN has also promises to cut their tariff rates to more affordable levels after the government reduced the excise duty on airtime by 3 per cent. - Lap Green, the Libyan firm that has taken over Rwandatel has promised to scrap cross-border roaming fee on calls between users in Uganda and Rwanda. The move comes shortly after MTN scrapped the fees in Kenya and Uganda and Rwanda. - Mobile operator Celtel announced that its subscriber base has hit 10 million in Nigeria. - In Benin, mobile operator MTN has announced that its mobile internet service is ready to be launched commercially. The service is based on GPRS technology - Ericsson has announced it is opening an office in Lusaka, Zambia. - In Mauritius, the announced rate cuts on calls made from mobile to fixed lines has been postponed until the beginning of December as the telecoms companies are still negotiating interconnection rates with the Information & Communication Technologies Authority (ICTA). - Angola’s mobile operator Unitel is introducing video calling service branded “vídeo-chamada".
MTN takes on Vodacom ISP in South AfricaMTN must reposition itself as an Internet service provider (ISP) in order to remain competitive, says Brian Seligmann, MTN's data and messaging executive. Speaking at the ITWeb Technology Roadmaps 2007 conference, in Bryanston yesterday, Seligmann said: “MTN has 4.5 million active data subscribers, and yet we still think of ourselves as a mobile provider and not an ISP. We need to start playing the game.” Mobile services are evolving within the context of Internet services and these will be more important than the company's traditional mobile voice offerings, he explained. He said with the high levels of mobile penetration, MTN has the potential to dominate in the IP arena. “Mobile Internet will become more valuable than mobile voice services, and if we don't get involved, we will fail.” The availability of free Internet services, such as instant messaging and VOIP applications, are driving the company to look more directly at Internet services, he noted. “IP [Internet Protocol] services have the possibility to wipe out most mobile revenue.” MTN is not the first cellular operator to elevate the importance of ISP services within its strategy. Earlier this year, its competitor Vodacom established an ISP business. In June, Vodacom Group CEO Alan Knott-Craig said the company would look to make a significant ISP acquisition in order to “buy” its way into the space. He told Business Day that the deal would “involve a company roughly the size of Dimension Data's local operations”. Speaking at the presentation of the company's financial results, Knott-Craig also said the local operation would follow global trends and set up its own fixed-line network. “Unlike our other locations, Vodacom SA does not provide its own infrastructure. However, this year will see our first big move into this arena. In all cellular companies around the world, you see a move to fixed-line interests and vice versa. The fact is the only part of mobile that is mobile is the last mile,” he said. Vodacom has since launched YeboNet, its ISP business aimed at the consumer market. MTN's ISP strategy follows the company's disappointing data revenue figures released in August. At the time, MTN VP of the Southern and East Africa region and SA MD Tim Lowry said the company's local data uptake had grown, although it needed to do more. “Excluding SMSes, about 9% of our local revenue comes from data. However, we have a lot of initiatives in place to grow our data contributions. In the last year alone, we have seen data revenue double from the first to the second half of the year,” he said. The company has historically kept its data revenue close to its chest, declining to disclose its contribution. This has made it impossible to compare MTN's data performance against that of Vodacom. In June, Vodacom revealed that in its South African region, data revenue constituted 13% of its total income. This translated into R3 billion for the year ended 31 March. (Source: ITWeb) Alink to offer VoIP in TanzaniaAlink Telecom (T) Ltd, launched recently after re-branding its trade name from Datel (T) Ltd, has given the market two new products enabling customers to call international destinations at relatively low prices. The new products are Voice over Internet Protocol (VoIP) and Kibaro VoIP, the lowest tariff of the market, enabling customers to save up to 80 per cent on international communications and free voice communications. The products, apart from complete visibility of call record, have simple and transparent invoicing with complete compatibility telecommunication devices. Specializing in broadband internet access like Voice over Internet Protocol (VoIP) and data transmission, the firm has major branches in 16 countries including Côte d'Ivoire, Burkina Faso, Cameroon, Congo, Liberia, Mali, Niger, South Africa, Benin, Ghana, Guinea and Tanzania, and subsidiaries in 33 other countries. The company, part of the Pan-African group of companies in the Africa-Atlantic Group based in West Africa, is re-branding to consolidate its position in the market. Its group chairman Joel Cader says it aims to become the leading Pan-African alternative telecom solutions provider over the next few years. Cader says that in the coming year the company will reinforce its presence in 16 countries where it has branches, by creating nine new subsidiaries. It will expand its activities in three new countries with the creation of five new subsidiaries, bringing Atlantic Group into 19 countries with 47 operational units, he said. In Tanzania the company was established in 1996 as a joint venture between the Tanzania Telecommunications Co. Ltd (TTCL) and France Telecom under the name of Datel Telecoms (T) Ltd. The government owns 25 percent shares, France Telecom 65 and company staff hold another ten percent of the shares. During the past 11 years the firm has managed to offer quality services through support by an international group, enabling Alink Telecoms to access significant technical and financial resources. Alink Telecom (T) Ltd has invested over $800,000 towards upgrading its technology since early last year, to enhance availability, reliability and total performance of its network, the group chairman noted. In order to be able to provide more update and quality services, the company has migrated to the Tanzania Communication Regulatory Authority (TCRA) licence scheme of international application services. This will allow it to offer VoIP, video conferencing, e-mail hosts as well as calling cards. "Alink Telecom (T) deploys only qualified technical teams for field support, nationally and internationally, an aspect of procedure distinguishing Alink Tanzania to the corporate customer from its competitors. Our professional, qualified and experienced teams deliver technological solutions adapted to the real needs of the customer in terms of support, scalability and service," says the chairman. In order to meet the requirements and demands of the current market, Alink Telecom (T) Ltd now offers Kibaro Internet and its range of internet high speed solutions, "which gives comfort of broadband surfing in conjunction with specific requirements and budget of every customer," he elaborates. (Source: The Citizen) iBurst PC/Internet bundles stall in South AfricaiBurst has terminated its PC/Internet bundle offering while Sentech has ceased to actively market its bundled product. MTN previously said sales of its PC/Internet bundle were ”trickling in slowly”. iBurst MD Alan Knott-Craig Junior says iBurst's PC/Internet offering did not sell well enough to justify the administration and risk management costs the company incurred. The probable reason for poor sales is that consumers prefer to buy hardware to their own specifications, from a familiar vendor like Incredible Connection, rather than take the “one-size-fits-all” bundled offering, he says. “The offering was not worth our while.” The high price of PC hardware and software also impacts on whether people can afford Internet access, he says. Sentech product manager Mike Kuczmierczyk says Sentech will continue to offer its PC/Internet bundle. However, the company is no longer actively marketing it. He would not be drawn on the number of PC/Internet units Sentech sold. “All I can say is the offering definitely sold below expectations.” Broadband providers initially introduced PC/Internet bundles as a way to lower the barrier to Internet access and drive broadband penetration in the country. Telkom, Vodacom, MTN, MWeb and Polka also provide PC/Internet bundles. Telkom and Vodacom would not state how well their PC/Internet bundles are selling, saying the matter would be addressed at the companies' mid-year results presentation on 19 November. (Source: ITWeb) IN BRIEF:- In South Africa, mobile operator MTN is planning to launch an Internet service operation in order to remain competitive. MTN is not the first cellular operator to elevate the importance of ISP services within its strategy. Earlier this year, its competitor Vodacom established an ISP business. - Kenya's digital villages will get Internet connection from Ericsson. It said it had partnered with The Earth Institute at Columbia University to provide connectivity to the Millennium Villages project. - According to Andrew Chenge, Infrastructure Development Minister, Tanzania's number of Internet users has risen thousandfold from 500 in 1996 and the number of Internet services providers increased tenfold during the same period. - In an interview with local newspaper, the Monitor, Erik Van Veen, the chief commercial officer of MTN reckoned that Uganda now has a combined total of about 300MB worth of bandwidth capacity from all providers”. Cost remains the major impediment to Uganda's data market. - Kenya Power and Lighting Company's (KPLC) intends to commercialise the extra capacity on its fibre optic network. KPLC will only require about one quarter of the carrying capacity of the cable and, therefore, intends to commercialise the extra capacity to generate extra revenue.
Connect Africa ICT Summit Ends With Renewed CommitmentThis week's 'Connect Africa' summit in Kigali ended on a high note with government and private sector delegates agreeing to work together to develop Africa's interconnectivity. President Paul Kagame said that Africa may soon lead the world in bridging the digital divide should the present commitment expressed by Heads of State, donors and the private sector translate into real action. Kagame, who was closing the two-day ICT summit at Serena Hotel on Tuesday, also promised that his government would soon draw appropriate policies and other mechanisms in the spirit of ensuring a more favourable climate for ICT investments on the continent's interconnectivity. The summit, dubbed 'Connect Africa' was attended by hundreds of government and business leaders from around the world, including five foreign African presidents. The President said that he would soon invite a national ICT stakeholders' meeting to discuss how the country would immediately start to implement programmes at promoting the sector. "This is the time when we have to own our problems, take a lead in solving them and create the best environment for investors," he said. The Secretary General of the International Telecommunication Union (ITU) Dr Hamadoun Toure said that days of charity and assistance for Africans are over. He said: "We have emerged from this historical summit with one aim of making sure that everybody plays their role in making business out of ICT. We have to create a win-win situation to ensure we are beggars no more," he said. He said that the private sector is determined to invest in the sector while politicians agreed to enact necessary investment regulations. "This was not a summit of recommendations and we have not adopted any, it's about action," he said. The State Minister for Energy and Communications, Eng. Albert Butare, said that the summit agreed to come up with a triangular commitment. "This will involve three players, Governments, to draw favourable policies, investors to come up with ideas and required human resource and the financial institutions to finance their ventures," Butare said. On the issue of investors who may hesitate to put their money in Africa for fear of political instabilities, Toure said that there could be a hundred reasons not to invest in Africa much as there could be a hundred others to invest. "We shall go with those that are willing, but as long as we have the required policies in place, I am sure investors are always willing to make profits which are there in this case," he said. A total of $50 billion was pledged at the summit to help build ICT infrastructure on the highly unconnected continent, with multinational telecoms giant, GSM, promising to invest $50 billion in five years, while the World Bank promised to double their aid flows into ICT to $2 billion by 2012. Other stakeholders including the African Development Bank and the EU also made pledges. (Source: New Times) Timid ICT Evolution in MaghrebFigures released by the United Nations Development Programme in Algiers show a timid evolution of ICTs in the Maghreb region with only 2.5% of Internet penetration. Algeria has reached 5, 33%, whereas Morocco is leading with 14, 36%, Tunisia is lagging behind, it faces technical and political obstacles to catch up with the rest of the region inspite of the slow pace of ICT penetration. However, for computing penetration, Tunisia is doing quite well with the rate of 5,63% compared with a catastrophic 1, 06% in Algeria, but a promising 2,35% in Morocco and 1,41% in Mauritania. For mobile telephone density, Tunisia leads the group with 56,32%, seconded by Algeria with 44,52%, Morocco is in the third place with 39,70%, Mauritania has 24,30% and Libya is the last one with a mere 4,45%. On the other hand, a survey on ICT carried out in Algeria by FOREM, a local NGO, says only 0,10% of small and medium enterprises (SME) have introduced computers in their businesses, 70% of existing computing equipments are outdated but 12% is the computing penetration rate iof the networks. In its report, Forem concludes that a high digital illiteracy level still prevails. In order to curb or at least to reduce the digital gap, Boujemaa Haichour, the Algerian minister of ICTs has initiated a series of measures. He has set up first regional academic networks to offer e-learning trainings, opened up the ICT market for more competition and established online universal access services. However, the UNDP?s expert argues that Algeria is not exploiting rationally and fully its huge ICT potentials, namely Internet facilities, he has also suggested to develop an internet policy to establish adequate structures to run and monitor related activities and services. Along the same lines, Ali Kahlane the DG of private company Satlinker has proposed a content industry development for the web. Although the internet does not belong to use, said Kahlane, we can re-appropriate it by filling the pipes with our content and that is why Algeria is badly in need of a concrete content industry, he concludes. (Source: HANA) CPN Completes Design on National IT Education Blueprint in NigeriaThe Computer Professionals Registration Council of Nigeria has completed the design of a national blueprint for Information Technology education in Nigeria. Part of the blueprint includes syllabi for computer education in both primary and secondary schools, which is to be unveiled by the Minister of Education, Dr. Igwe Nwachukwu. The president of CPN, Mrs. Adenike Osofisan, said the blueprint was necessary in view of the critical position that ICTs occupied in everyday life, where they have become a tool used by all. CPN, she noted designed the blueprint as part of its oversight functions as the body set up by government Act to regulate the Nigerian IT industry. Osofisan noted that there was a need to look at reviewing the national IT education curriculum with the view to making it more relevant to current realities. She said IT education was one of the areas that needed to be reviewed due to its very volatile nature. Besides, she noted that the entire framework of the IT policy should be reviewed to make it more focused on achieving national IT development goals. Meanwhile, CPN is to work with various law-enforcement agencies towards a greater regulation of the IT sector. According to Osofisan, the need had become necessary in order to ensure greater professionalism in the industry. She said many individuals and organisations were involved in IT services today without going through the requisite training and that CPN wanted to check this trend. The CPN president also revealed that the organisation would hold a national IT assembly in order to foster greater compliance with the CPN Act and promote the achievements of the government's national economic development goals. She said, "The need for the IT assembly became imperative because of the need for all the critical sectors of the economy to put their intellectual resources together and partner with government towards the realisation of the vision of making Nigeria a giant economy by year 2020." (Source: Highway Africa News Agency) IN BRIEF:- Omatek Ventures Limited, an ICT company has started manufacturing computers, casing and speakers in Ghana. It is the second to be built in the West Africa sub-region after the one in Nigeria. The factory which is currently operating at 25 percent capacity utilization would roll out 48,000 fully-built PCs, 120,000 casings and 120,000 speakers per annum. - Rwanda company Media Consult has launched a new Information and Communication magazine the INDEX. The 28-page printed magazine will be published on a bi- monthly basis. - Cameroonian centre for Information and Communication Technology, ICT and Non-Governmental Organisation, ADCOME, has won the 2007 Global Junior Challenge Award worth FCFA 15 million. The award is designed to young people and to schools to identify and reward best case practices on the use of ICT in education and training. - Hanze University of Netherlands has donated Euros 2 million (about Shs5 billion) for the introduction of Information and Communication Technology training in four technical colleges in Uganda. - Fujitsu Siemens Computers has beaten its competition to clinch the number one position for desktop sales in Egypt during Q307 capturing 11% per cent of Egypt’s desktop market share, while the market grew 6%per cent.
Nigeria’s Transcorp Targets N35b Revenue From SAT-3 CableTranscorp has projected a revenue of N35 billion from the underground Submarine Cable (SAT-3) it inherited through the acquisition of the Nigerian Telecommunication Limited (NITEL). Vice President, Corporate Communication of Transcorp, Adedayo Oyo disclosed this at an interaction with journalists in Abuja On Wednesday. Mr Ojo also used the opportunity to clarify issues on whether SAT-3 has been sold or not as speculated. According to the vice president, the submarine cable which Transcorp inherited through the acquisition of the NITEL is intact and has not been sold to any organisation, and has been handed over to a firm to manage. He stated that Trasncorp is expected to make about N35 billion revenue from the venture within the next five years. Speaking further, Ojo disclosed that the Management of Transcorp has initiated a number of plans meant to transform both NITEL and its mobile telecommunication arm, M-tel. Part of the transformation plans, he said are total restructuring of the telecommunication companies for effective performance, adding that Transcorp did impose management contract for SAT-3 on NITEL management. The Transcorp official stated that management of NITEL was part of the decision to hand over SAT-3 to management contractor. His words: "SAT-3 has not been sold to any company". He stressed that Transcorp has not sold any facility inherited from either NITEL or M-tel. Explaining further, Ojo said that core assets of both M-tel and NITEL including the SAT-3 cable are still intact, adding that Transcorp has no intention to sell them. He added that what was sold were non assets of NITEL, which he stated were sold by the privatisation agency, the Bureau for Public Enterprises (BPE) to settle former workers of the NITEL who were affected by the privatization exercise. Ojo claimed that $750 million paid by Transcorp for the purchase of NITEL/M-tel too much considering the poor state of the telecommunications firms. He pointed out that NITEL had many facilities that could make it a big firm, but was poorly managed. (Source: Leadership) ODM Appeals Ruling on Safaricom in KenyaThe legal tussle over the planned sale of Safaricom shares to the public yesterday climbed a notch higher when opposition politicians moved to the Court of Appeal seeking orders to block it. Orange Democratic Movement (ODM) leaders Anyang' Nyong'o, Omingo Magara and Mwandawiro Mghanga want the sale stopped until the Privatisation Act is enacted. Prof Nyong'o specifically wants the Sh34 billion sale stopped until the case is heard and determined. "It is in the interest of justice, fair play, judicial efficacy as well as the rule of law to grant interim stay pending a decision on the intended appeal," he says in court documents. If granted, the appeal will scuttle the IPO for which the Government has set a tight schedule to enable it list before end of the year. If all goes according to plan, the flotation would run from early December to just before Christmas. The politicians are contesting a High Court ruling by Mr Justice Joseph Nyamu a month ago that allowed the sale to go on, based on findings that there was adequate legislative framework to conclude it before the Privatisation Act was enacted. In another landmark ruling, Mr Justice Nyamu said the separation of powers in a democratic society meant that the Judiciary could not be used to order the Executive on how to conduct its mandate. The judge had also found that the sale of Safaricom was of immense public interest and should be allowed to proceed on that basis. Advisors are currently in the second, and possibly final, week of due diligence. (Source: Business Daily) Microsoft Contributes 47 Percent to Nigeria's IT and Economic GrowthThe International Data Corporation, (IDC) last week released details of a global research study showcasing the information technology (IT) industry's impact on "job creation, company formation, local IT spending and tax revenues" in 82 countries and regions worldwide. Commissioned by Microsoft, the study covers the areas that comprise 99.5 per cent of the global IT spend with Kenya, Nigeria and South Africa as countries in focus for Africa. The study predicted that IT spending would create just over seven (7) million new jobs and 100,000 new businesses worldwide over the next four years. It also predicted that in 2007, Microsoft-relaated activities would be responsible for almost 15 million jobs in an IT industry of just over 35 million people 42 per cent of total IT employment globally. In the Middle East and Africa, (MEA) of the 1.2 million people in IT-related employment this year, 53 per cent are involved with Microsoft and its ecosystem of partners. Over the next four years, IDC predicts that the IT sector will generate more than 393,000 new jobs and account for the creation of more than 9,000 new companies in the region. This will help produce $12.5 billion in new tax revenues and contribute $34.4 billion to GDP. In Nigeria, the figures show that 47 per cent of the 84,000 people in IT related employment are involved with Microsoft and its ecosystem of partners. More than 23,000 new jobs and 400 new companies are expected from IT over the next four years, producing more than N29.5 billion ($200m) in tax revenues and contributing N141 billion ($1.1 billion) to GDP. In terms of market growth, IDC predicts that spending on IT in the MEA markets will grow at just under 10 per cent per annum for the next four years, with software growing at almost 11 per cent. In 2007, just over $31bn was spent on IT, almost $5bn of which was on software almost 15 per cent. The report also shows that almost 40% of IT employees are engaged in creating, distributing, installing or servicing software. Spending on IT in Nigeria will grow at almost 15 per cent per annum for the next four years, with software growing at just over 14 per cent. In 2007, the report shows that almost N74 billion ($560 million) is being spent on IT in 2007; N7.4 billion ($56 million) of which is on software around 10 per cent. Mba-Uzoukwu reiterated Microsoft's strong commitment to contribute significantly to local software economies. "Information technology has already helped empower more than a billion people, but there are another 5 billion we have yet to reach," he said. (Source: Vanguard) Dynamic Visual Technologies Raises R12.5m Ahead of AltX Listing in South AfricaSoftware developer Dynamic Visual Technologies (DVT) has raised R12.5m through a private placement of its shares ahead of an AltX listing on November 6. It released 12,5-million ordinary shares at R1 each in an oversubscribed offer. T hat cash will be injected into the company. Its private owners also raised R3.3m by selling some of their personal stakes. The cash would mainly be used to fund potential acquisitions. Negotiations were already under way with two companies that had been identified as prospective targets, said founder and CEO Chris Wilkins. The cash should also provide working capital and finance product developments, while the listing would help it retain staff through a share incentive scheme. DVT's main shareholder is the black-empowered technology company Cornastone, which bought 28,7% for R4,5m last year, giving it a black empowerment profile. Cornastone Consulting's CEO, Hamilton Ratshefola, serves as its chairman. DVT was formed in Cape Town in 1999 by Wilkins and Clive Hubbard, and has made a profit every year. Its products include helpdesk and customer relationship management software. Wilkins said that, in its eight-year history, it had delivered more than 95% of its software development projects on time, within budget and according to requirements, compared with an industry average of 30%. The company reported revenue of R44,4m for the year to February 28 and predicts R58,4m for next year and R76m in 2009. Attributable profit for this year was R2,8m. T he directors hope to grow that to R5,8m and R8,5m in the next two years. Dividends are not on the agenda because the profits DVT generates would be reinvested to fund further growth, the directors said in the prelisting prospectus. (Source: Business Day) IN BRIEF:- China’s largest cellular operator, state owned China Mobile, is close to striking a deal which will see it take a stake in pan-African mobile group MTN, according to XFN-Asia which cites a report from Shanghai Securities News. - The government of Uganda has signed the sale deal of its 80 percent shares in Rwandatel to Lap Green Networks. Lap Green will make part payment of $50m. Another $50m will be paid in two instalments of $25m within two years. - Morocco's state-run Caisse de Dépôt et de Gestion (CDG) purchased on Friday 0.6% of the capital of Vivendi, and ceded to the French telecoms firm 2% of the capital of Moroccan telephony operator Maroc Telecom. The agreement, signed between the two institutions raises the participation of Vivendi in Maroc Telecom to 53% up from 51%. - As global IT company Datatec reported a rise in gross profit for Q3 it also announced that its two African acquisitions have helped to broaden its distribution channels to serve eight countries, including the prime market of Nigeria. While much of Africa is still an IT desert, Datatec is gathering intelligence to determine how far and how fast to press home its first mover advantage in those countries. The company plans to set up set up a branch in Angola. - Dimension Data has acquired Accelon, a communications services company operating in Nigeria and Ghana, for an undisclosed sum.
Vodacom to Boost Data Revenue With Music Download ServiceVodacom expects a fillip to its data revenues when it becomes the world's fourth operator to launch a new music download service. MusicStation is a more sophisticated version of the mobile music phenomenon that has gained a niche following among cellphone users. The version due to launch in December will let users choose from 1-million tunes, download them without paying data transfer fees and let them listen to the tracks as often as they want, for R25 a week. "Both ourselves and Vodacom believe we will see a marked increase in revenue derived from digital music downloads," said Warren Carley, regional commercial director for software developer Omnifone. "Vodacom expects it to be exceptionally popular." Carley would not say how many of Vodacom's 23-million customers are expected to subscribe. Nor would he say how the R25 weekly fee would be divided between Vodacom, Omnifone and the record labels and musicians. Data accounts for only 8% of Vodacom's annual revenue now, with CEO Alan Knott-Craig convinced it will generate a far larger slice of its future income. Music downloads had not yet been as lucrative as the cellphone industry expected, Carley said. The average UK subscriber spent £6 to £36 a year, by paying for each track. "You can't run a business on that by the time you have paid the labels and split the revenue," he said. MusicStation's subscription service should almost double what the industry was earning now, he said. While record labels complain that the industry is being harmed by piracy and illegal download services that pay no royalties, four big record labels are backing MusicStation, as they are guaranteed an income. The system monitors how often each track is listened to, so musicians can be paid each time their track is played. An Omnifone team in SA will provide local music content. (Source: Business Day) Free Website to Promote African BusinessesA new website, www.opportunitiesinafrica.com, has been created to attract investment trade and business into the Africa and to equally promote African trade and business both internally and internationally. Supported by UNECA, the aim of the website is to publish a positive image of Africa as a place with infinite business opportunities. Here global businesses can successfully invest, trade and forge strong business links with indigenous companies. This website also enables African companies to sell their goods on world markets. www.opportunitiesinafrica.com has been designed to incorporate three exciting platforms each of which will offer African companies and governments the opportunity to promote themselves and their products and services online to the rest of the world. The following is a brief outline of these three platforms and how they will benefit organisations whatever their size, output or category. Governments wishing to invite tenders for state-sponsored projects from both internal and international companies can now do so on this platform. They can instantly highlight any and all investment opportunities available in their respective countries to the global market on one site. This area of the website also enables private companies the opportunity to showcase their investment opportunities. Companies can make contact with interested parties to raise venture capital or seed funding and to tap into the experience and networks of the investor to help realise and develop their business ideas, enabling them to be successful on a much broader scale. This area of the website is to offer a comprehensive directory of companies which currently operate within your country, highlighting their services, products and contact details. This allows international business a one-stop point of contact to enable working partnerships to be forged between their organisations and your country's businesses. We strongly advise that all African companies and businesses avail themselves of this opportunity to promote themselves on the global market. www.opportunitiesinafrica.com is free to use and all companies are invited to participate. (Source: Mmegi/The Reporter)
PEOPLETelkom South Africa announced a new executive committee structure. Thami Msimango is returning to Telkom after briefly defecting to Vodacom, and will become the new chief of global operations and subsidiaries. Naas Fourie will be the new chief of strategy while Motlatsi Nzeku will become the chief of operations, Charlotte Mokoena will head human resources and Ouma Rasethaba will deal with corporate governance. JOBS AND OPPORTUNITIESDesign of an e-government portal framework for the Government of Seychelles We are presently searching for individual for e-government portal development. Application deadline: As soon as possible and at the latest Monday 12 November 2007. Contract duration: Short term, 30 Man-days. For further information visit the Danish Management A/S website at http://www.danishmanagement.dk EVENTS- USING ICT FOR EFFECTIVE DISASTER MANAGEMENT - AFRICA FORUM 2007 13th - 15th November 2007, Dar es Salaam International Conference Centre, Tanzania The use of ICTs in disaster management is one of the CTO's core areas of expertise. Following successful events in Asia, the Caribbean and the Pacific, we are delighted to deliver our fourth regional ICTs for Effective Disaster Management Forum in Tanzania. There is no admission fee and we hope that all disaster management stakeholders will be able to attend and contribute to this event's success. With the Ministry of Communications and the Tanzania Communications Regulatory Authority as hosts, as well as the potential of a half-day workshop conducted by the ITU, this event has already attracted a huge amount of interest. For further information contact Mr. Salim Binbrek at the CTO on Tel: +44 208 834 1592 or Email: s.binbrek@cto.int. For more information please see the CTO website http://www.cto.int - 5th OPEN ACCESS CONFERENCE 2007: HOW SOCIETIES BENEFIT FROM OPEN ACCESS TO ICT 14th - 16th November 2007, Bagamoyo Tanzania Resource persons and delegates from all around the world will meet in Bagamoyo to discuss best practice in ICT following the trend and advancement in the use of ICT in general such as mobile phones, multipurpose tele-centres and the like. The conference will address ICT in its entirety with demonstrations and presentations. Focus areas include: ICT infrastructures, Strategic ICT Leadership, ICT in Education, Universal Access, Applications, Policy and Social Implications; ICT with business and M-Applications. For further information contact Mr. Amos Nungu on Tel: +255 787 716778 or Email: amnungu@kth.se. For more information please see the conference website http://www.wideopenaccess.net/ - 3RD African Outsourcing & Contact Centre Conference 27th – 28th November 2007, Safari Park Hotel, Nairobi, Kenya This conference and exhibition provides a business networking platform for the entire regions outsourcing industry. This is a unique opportunity for companies looking for outsourced services to meet operators in this emerging outsource destination as well as for local operators to learn about international trends, best practices and business opportunities. For further information visit www.aitecafrica.com - ICT AFRICA 13-15 February 2007, Addis Ababa, Ethiopia CT Africa 2008 offers: A Plenary session featuring policy makers, Business leaders and key ICT research leaders High quality, peer reviewed technical presentations Technical tutorials on emerging ICT technologies Workshops on ongoing projects Industry exhibition For further information contact visit http://ictafrica.nepadcouncil.org/
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