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WEEKLY PUBLICATION DEADLINE: 12 pm GMT Sunday. ISSUE NO 382 Africa’s competition laboratory Kenya is the one to watchNo regulation regime is perfect but the three East African countries – Kenya, Tanzania and Uganda – are leading the way in terms of breaking down many of the old barriers to competition. Of these, Kenya is interesting because it was the pioneer and many of the things that are happening there will in time be seen elsewhere in some form. Russell Southwood explains what’s happening in Africa’s competition laboratory. Outside of the large Sub-Saharan markets like Nigeria and South Africa, Kenya stands out because it has both the population level and a density of private sector activity to be different. In other words, it’s big enough to be relevant for the ten or more countries of a similar scale. In addition, since Moi left the stage, the economy has been moving at a fast clip to catch up: last year economic growth was 7%. With the dead hand of inertia removed, Kenyans have felt more confidence in setting up new businesses. The pointers it provides are as follows: - Even with a liberalised regime, it is incredibly hard for small independent companies to challenge the incumbent in the fixed line sector. Kenya was slow to introduce an interconnection regime designed for competition between many players and its two independent fixed wireless operators have suffered as a result. Fixed wireless is, as the mobile companies are discovering, far from fixed. - Between them, Kenya’s fixed wireless operators Flashcom and Popote Wireless do not have much more than 10,000 subscribers and in the case of Popote, it’s making 80% of its revenues from data. Both use CDMA and are focused on the capital Nairobi, with Flashcom having a larger number of base stations . Subscribers can actually use their phones more or less anywhere in the city. Neither have yet started a wider geographic roll-out. Despite this lack of current success in the voice market, Popote’s Eric Muthi believes that there is still considerable growth potential. Meanwhile there are others waiting to offer more retail voice competition: in one case, simply as a voice service and in others as part of a wider offer. - Meanwhile incumbent Telkom Kenya has adopted the strategy of India’s Reliance and has used its CDMA fixed wireless product as a proxy mobile service. It is said to have 400,000 subscribers based on its cheap KS5.50 a minute national rate. Subscribers have had what for all intents and purposes has actually been a mobile service and Telkom Kenya has wriggled this way and that to suggest otherwise. - With the France Telecom take-over of Telkom Kenya, the country’s two operators, Safaricom and Celtel, will have some serious competition for the first time and may have to begin to address their quality of service shortfalls. Competition should also mean prices will begin to fall for as one person told us:”Competition in this market is really only on price.” Telkom Kenya’s strategy has been very savvy in that it starts operating with an existing base of subscribers before having to invest in paying for its mobile licence. Rumour has it that France Telecom will simply rip out the CDMA network and put in GSM. As a new entrant, it will have a clear CAPEX advantage. Econet is supposed to have cleared the hurdles it had and will be investing soon but on past evidence, don’t hold your breath. - Even without a fibre connection, the country’s bandwidth requirement has grown rapidly as the economy has expanded. It is now approaching the 1 gbps mark and this is all being paid for at satellite prices. The broader message in this is that an expanding economy will drive use both at a corporate and retail level. And rapid growth will come from economies that are coming out of war or unfavourable political circumstances where there’s a “one-off” bounce that might turn into above-average growth in the mid-term. As Bill Clinton’s electoral team used to say, it’s the economy, stupid. Messages on satellite bandwidth costs are mixed. Most operators buying in volume say that prices are coming down but a small number of those we spoke to said because of he shortage of C-Band prices were going up. (Interestingly Altech has been in talks to buy Sameer ICT, which includes KDN.) - The market is readying itself for the arrival of much cheaper bandwidth. Seacom and TEAMS are both seen as credible projects. EASSy is perceived as still being in the game but its credibility has been undermined in the eyes of operators by the confusions over the rival NEPAD project. TEAMS has almost all its financing in place and says it has a ship booked to start. Depending on their investment, operators have been offered 1 mps for between US$2-300 a month. This is only to Fujirah but an onward solution is said to be not too far away and will cost about the same amount to the United States. The price will be higher than the headline figures suggest but nevertheless will be low enough to be market changing. The recent public disagreement between UUNet and PS Bitango Ndemo illustrates that not all operators have understood this changing world. It will no longer be about making money from selling over-priced bandwidth. The game moves to retail services and applications. - A “triple play” combination of voice, Internet and TV will probably be offered by at least two operators next year. France Telecom is likely to roll out its LiveBox product as the Kenyan market has considerable potential. Jamii Telecom is rolling out a PONS network and wants to be offering “triple-play” over its new STM64 fibre metro network. Industry estimates of potential retail broadband subscribers vary between 300,000-500,000. Expect bundled offers at almost European levels and download speeds starting at 512 kbps. The existing Government if re-elected wants to provide subsidised bandwidth to universities and colleges. - In the meantime, the retail independent retail ISP as it used to exist has all but disappeared and those remain are not in the best of health. Where have all the retail subscribers gone? Well, some have stayed with ISPs like Africa Online under its new owners but many more have either defected to the fixed wireless operators, or are using Telkom Kenya’s phone-in number or at the top-end of the market are using the data services of the two mobile operators. Only the state of Telkom Kenya’s copper and its distracted management focus mean that it has failed to harvest what might have been an extensive market. Incumbents need to know that if the don’t have a “low –price, high-volume” strategy for DSL then the mobile operators will take this business away from them. - Apple may say that it has no plans to roll-out in emerging markets like China but the market has a life of its own. Apparently a shipment of iPhones has already reached East Africa and we saw one in the hands of someone we visited. He hadn’t yet got it working but he was working on it. Another early adopter told us that he was surprised to discover that it worked on his Celtel account immediately and just as well when he visited Someone in Uganda who used one to e-mail to confirm our meeting clearly had better luck. It will be interesting to see whether this grey market in the latest desirable phone will survive Apple’s attempts to exclude untied users through software fixes. European competition law is already being upheld in Germany where T-Mobile must sell the device independent of a network package and even a hefty price tag does not appear to be a sufficient disincentive to stop sales. It would be unfair to say that all was rosy in the garden that is Kenya but in terms of competitive markets, it has got a great deal right and others might learn from what is happening there.
France Telecom Wins Ghana Telecom BidFew days after Singapore Telecom withdrew from the race to take over 51% stake in Ghana Telecom (GT), the Government of Ghana has selected Telecom France as the winner of the bidding process for GT. France Telecom beat Vodacom and Portugal Telecom. The price is yet to be confirmed but sources close to the Ministry of Communication say it is between $500 million and $600 million In all, twenty foreign investors expressed interest in Ghana Telecom when the Government of Ghana announced early this year that 51% of GT would be sold to a strategic investor in a bid to enhance efficiency and quality of service. The rest of the shares would then be floated on the Ghana stock exchange (GSE). Ecobank Development Corporation (EDC) and Societe Generale are the transactional advisors for Ghana for the privatization. Telecom France's revenue was up by 1.9% on a comparable basis to EUR25.9 billion (up 2.1% on an historical basis), reflecting a good second-quarter performance in the first half of 2007. (Source: Ghanaian Chronicle) Telkom South Africa double deal flopsTelkom's plans to reinvent itself have been destroyed as talks to sell assets to Vodafone and MTN collapsed this week. The news was partly a surprise and partly no surprise at all, as many analysts expected a proposed deal with Vodafone to proceed, but a more nebulous deal with MTN to fail. However, Telkom disclosed that the two deals had been intertwined so axing one instantly killed the other. Telkom aimed to sell part of its 50% stake in Vodacom, worth about R75bn, to the UK's Vodafone and publicly list some remaining shares. It seemed a clear-cut move, with only the price to resolve. Yet it apparently hinged on a separate plan for MTN to buy "certain or all of Telkom's fixed-line businesses", which collapsed after the strategic, operational and regulatory aspects were examined. Earlier this month Vodacom CEO Alan Knott-Craig described the deals as "very complicated". Of the MTN deal, he said: "I wouldn't be surprised if nothing ends up happening. I think almost every company in this country is going to go to the competition board." Telkom said the MTN deal also failed because anticipated costs did not match benefits. That confirmed market doubts about how MTN would gain by absorbing Telkom's infrastructure, especially as MTN was already laying cables of its own. The news does not, however, hang up on Telkom's much-needed restructuring. Its results for the six months to September showed a 19% dive in profit for fixed-line voice calls, emphasising the need to offer combined fixed and mobile voice and data services. Telkom said it would continue to pursue its options to offer converged services. Vodafone also confirmed it was still interested in taking control of Vodacom to end the unworkable “ménage à trois”. The talks had not ended because of problems between Vodafone and Telkom, but because of difficulties between Telkom and MTN, it said. Kaplan Equity Analysts MD Irnest Kaplan expected Vodafone and Telkom to revive the share-sale talks. But he was pleased MTN would not attempt to buy anything from Telkom. MTN was interested in Telkom's national backbone, but Telkom probably wanted to foist much more onto MTN, including 30000 staff. "MTN's shares are labelled internationally as an awesome high-growth operation of choice in Africa and the Middle East. If it bolted on Telkom it would change its whole investment profile," Kaplan said. "It's very challenging now for Telkom with a lot of uncertainty. We don't know if the Vodafone deal will be resurrected and Telkom has a lot of management posts to fill." Telkom also needed robust strategies to defend its turf against rivals such as Neotel and Internet Solutions, he said. (Source: Business Day) $70m Financing boost sets Eassy fibre cable project back on trackEastern Africa Submarine Cable System (EASSy) has secured key financing, raising hopes that Kenyan consumers can start enjoying cheaper Internet connectivity in early 2009. It becomes the second of Kenya's three competing submarine fibre optic projects to complete its financing plan with the support of five development finance institutions. Implementation of the EASSy project, a public-private partnership, has been dogged by wrangles among member states that have left it trailing the private sector-led Seacom. "This is a significant moment in the development of infrastructure in Eastern Africa," said Sammy Kirui, the chairman of the EASSy consortium and Telkom Kenya managing director. National Service provider Telkom Kenya hosts the secretariat for the project, which draws membership from more than 12 African states. Mr Kirui said EASSy had received the entire long-term financing of $70.7 million from the IFC, the African Development Bank (AfDB), the European Investment Bank (EIB), Germany's (KfW) and the AFD of France. The total cost of EASSy - a two-part project offering international connectivity through a sub-marine cable and regional links through a back haul link - is estimated at $235 million. More than 25 private telecoms companies that are part of the consortium's membership are expected to provide the rest of the financing. Earlier in the month, Seacom, a private undersea fibre optic initiative whose cable will follow the same path as EASSy, announced that it had obtained financing and was moving into the construction phase. Seacom has invested more than $10 million in the marine survey and engineering of its cable and fixed June 2009 as its ready for service date. This leaves the Kenyan-government driven - the East African Marine System (TEAMs) - trailing in the race to land high speed internet on the East African coast. "From a consumer's standpoint, the more cables there are the better, as they will compete on the pricing," said Mr Kirui. East African consumers of bandwidth typically pay between $200 and $300 a month for relatively low speed connectivity. With the arrival of fibre optic cables, these prices are expected to fall by up to two thirds. In March, EASSy members formally signed a contract with French telecommunications firm Alcatel-Lucent to lay the submarine cable on a full turn key basis. Construction of the EASSy system is now expected to be complete by the first quarter of 2009. EASSy was first conceptualised in 2003, when Eastern Africa telecom operators set up a steering committee to examine the viability of implementing a submarine optical fibre cable system that will connect the Eastern Africa seaboard and the land locked countries to the rest of the world. (Source: Business Daily) Will a new Board save Gamtel in Gambia?A new board for the Gambia Telecommunications Company (Gamtel) was this week inaugurated by Neneh Macdouall-Gaye, secretary of state for Communications and Information Technology. The inauguration of the new board of directors, headed by Chairman Michael Tenn, managing director of Gamtel, came following the signing of a strategic partnership between the government and Spectrum Group in August, this year. Other members of the board are Chief Executive Officer of TAF Construction Mustapha Njie, vice chairman; Ali Musawi, Spectrum/Gamtel; Mr Raghid Charara, director of International Operations of Spectrum/Gamtel; Mohammed Jammeh, UTG lecturer; Banding Sillah, finance director of Gamtel; Alhaji Taal, representing permanent secretary at the Department of State for Finance and Economic Affairs; Lamin Camara, representing permanent secretary at the Department of State for Communications and Information Technology; Rein Zwolsman, CEO of Gamtel and Cril Rumble, chief finance officer of Gamtel. According to Secretary of State Macdouall-Gaye "the composition of the board, which comprises representatives of the government, private sector, Spectrum Group and Detecon (the management consultants) is a new set up of its kind to create diversity and synergy in the successful execution of this new initiative”. SoS Macdouall-Gaye recounted the avalanche of challenges that has gripped Gamtel prior to the new partnership, saying "you will agree with me that Gamtel over the years experienced operational, technical, financial and strategic limitations which posed unbearable challenges that led to a stagnant technological expansion and growth. This impacted on the profitability of the company, inability to honour its liabilities and inadequate cash flow to provide necessary working capital". "As a result, Gamtel has deteriorated in capacity and resources to carryout its national obligations. This was compounded by the fierce competition it faces in the industry which calls for a strategic shift in thinking and new management style hence the need for this new strategic partnership," she added. "Therefore, government was forced to shift its strategy to commercialise the company by divesting 50% of Government's shares and entrusting the management to a third party company (Detecon). He emphasised that he would not compromise any complacency for failure. It is therefore worthy to note that the president attaches great importance to this strategic partnership and has entrusted you the board members and Spectrum Group to make this partnership a success and that Gamtel/Gamcel become a world leader in telecommunications," she told the new board. The Communications and Information Technology Secretary of State then gave a piece of advice: "As board of directors, you are tasked to provide the strategic direction of Gamtel/Gamcel and to give the necessary guidance, advice and support to management. You are therefore, expected to help: Re-position the company and maintain its position as a market leader in the country; improve the company's financial status and profitability; ensure improve dividend payment to shareholders; improve its quality of service and expand its activities especially in rural areas; ensure available, accessible and affordable services are provided to consumers; and restore its past glory and become a world class telecommunications service provider." She acknowledged the challenges that lie ahead of the board. However, she said: "We are confident that with the calibre, experience and dedication of the board members, we can make this a reality." (Source: The Daily Observer)
In brief:- In Uganda, the National Environment Management Authority (Nema) has required that Warid Telecommunications carries out an Environmental Impact Assessment (EIA) for each of its masts being set up across the country. The request follows an earlier incident in November when Nema stopped the building of mast by Warid on the basis that the telco didn’t have an EIA for the building of this mast. - The National Union of Ghana Students (NUGS) said in a statement that the Government's decision to abolish VAT on mobile phone imports and instead impose tax on mobile phone airtime is “unwelcome”. It said the initiative would be to the detriment of students who were mostly non-income earners. - Justin Morel, the Ministry of Communication in Guinea has warned the four telcos operating in the country (Sotelgui, Areeba, Intercel and Orange) that failure to reach an interconnection agreements between them in the next 48 hours will results in financial sanctions. Disagreements on interconnections prices has resulted in a none-sense situation where Guineans are not able to call somebody on other network. - In an attempt to seek redress for various alleged acts of unfair trade practices and breach of agreements, the Association of Licensed Telecoms Distributors of Nigeria (ALTDON) is instituting N10 billion suit against the management of Celtel Nigeria. The dispute follows the decrease of the distributors commission by Celtel. The mobile operator argues that the growing subscriber base, now 10 million would provide more volume sales and profit. - Wataniya, Qatar Telecom's national mobile telecommunications unit, plans to keep its 50% stake in a Tunisian mobile phone venture after winning an arbitration case against Orascom Telecom Holding, reported Bloomberg. An international tribunal found that 'although Wataniya did not respect the right to propose the appointment of Tunisiana's board chairman, this breach itself was not enough to require Wataniya to transfer its 50% shareholding to Orascom. - Gabon Telecom has introduced a voluntary redundancy scheme in an attempt to reduce further the number of employees still on its payroll. Telecoms, Rates, Offers and Coverage- HITS Telecom, the fourth telecommunications operator to be given a licence to work in Uganda, has successfully conducted its first calls this week. The commercial launch of the service is scheduled for Q1 2008. - Local Nigerian newspaper, Leadership reported several hours of disruption on MTN’s mobile network during this week. This recent failure adds to the long list of quality service issues that the Nigerian Communication Commission wants to be solved. The organisation recently ordered that all the telecommunication (fixed and mobile) operators have up till December 2007 to improve on their network or face sanction. - Vodacom has launched two personal social networking services that are a first for South African cellphone users. “We have used the latest technology, but the real breakthrough here is ease–of-use and the additional location-based feature,” said Dot Field, Vodacom’s chief communications officer. Meep The first service is Meep, a real-time, presence-based Instant Messaging service. The second is TheGRID that will for the first time allow South Africans to enter the location-based social networking space from their cellphones. A unique feature to find friends by seeing their physical position on a street map is practical and fun to use. - Celtel Kenya has signed an SMS interconnection agreement with Telkom Kenya that allows the latter's wireless customers to access the former's network via a short message service. Further, Celtel said it would extend interconnection to the Internet service providers (ISPs) to use Celtel's platform for the Voice Over Internet Protocol (VOIP). - Cell C, the smallest of South Africa’s three mobile network operators said that the company added 850 000 new pre-paid subscribers during the third quarter of 2007. Cell C also announced that their free weekend minute deal proved to be a great success. Since the launch of the Woza Weekend offering at the end of June, Cell C said that it has activated more that one million new subscribers.
Is the Merger of Pan-African ISPs a good sign for Internet Prices?Customers subscribing to iWay Internet brand are set to benefit from efficient high, quality and reliable service after the merger of Afsat Communications and MWEB Africa. Afsat and MWEB have been operating in several of the same countries, but their services were complementary and together they would have more buying muscle for renting transmission capacity from companies that operate the satellites. In a press statement issued by Afsat, the Chief Executive Officer, Mr Salim Suleiman said the iWay brand provides more than 50,000 corporate customers across Africa. "We will provide MWEB with our satellite network expertise and wide coverage across the continent. Becoming part of the MWEB Africa Group will enable the business to expand to new level," he said. Through its iWay brand, Afsat provides fast reliable and secure broadband Internet connectivity solutions to corporate, businesses and residential customers. It also provides reliable and secure corporate data networks to large banks, corporate and government institutions. The MWEB Africa General Manager, Mr Harry Aucamp the company's strategy is to expand its presence and Internet services throughout Africa. "The merger will considerably strengthen our representation and underlines our commitment to be a leading player in this dynamic market. Afsat's iWay service is perfect fit with our current MWEB VSAT strategy," he said. MWeb Africa is part of the Naspers Group, a multimillion media company with interests in electronic and print media which also includes Multichoice and Media24. (Source: The Monitor) News24.com hits a new Milestone in South AfricaNews24.com, the breaking news and information service in the 24.com network of sites, has recorded more than one million unique South African visitors in a month - the first South Africa website to do so. This is according to international statistics group Nielsen//NetRatings' list of the most visited local Internet sites for October 2007. Elan Lohmann, News24 publisher, comments, "Online media is often regarded by marketers and traditional media executives as not yet on the map but our reach is continuing to grow in the local market. News24's achievement is a significant event for the entire industry. It shows that there are a mass of South Africans who require their news content online. More importantly perhaps, it shows that the local Internet market is coming of age as a viable mass communication medium. "We believe that connectivity will continue to improve at an increasing rate in South Africa and that news websites will have the most to gain. Global giants like Facebook, Myspace, Google and Youtube may steal away local users to their services but nobody can do local news better than we can on home soil." Jannie Momberg, News24 editor, attributes the site's success to a strategy focused on breaking news and compelling content. "It has been our focus to ensure our readers are kept up-to-date with the fast-paced news cycles of the 21st century. News24's content is also available via mobile phone and on DStv channel 299, providing more South Africans with the opportunity to access news when they need it." "Furthermore, we have made the News24 experience more relevant to our users. MyNews24.com, where we publish stories written by our readers, has attracted over 80 000 users per month. This is a remarkable achievement when we consider that it was only launched in May this year and a clear indicator that South Africans are embracing the digital revolution of Web 2.0. The comments facilities that we have added has also stimulated fantastic activity and given a real voice to our users," says Momberg. Concludes Lohmann, "It is a privilege and a highlight of my career to be associated with such an Industry milestone and all credit goes to the dedicated News24 team." (Source: Biz-Community) Egyptian bloggers plan festival of torture videosEgyptian bloggers, often at the forefront of exposing human rights abuses, are planning an online festival of torture videos to run alongside the 31st Cairo Film Festival, from 27 November to 7 December. According to the "Middle East Times", the parallel festival is the invention of a blogger named Walid, and will feature "controversial acts of torture allegedly committed by the security authorities." Prizes, including a "Golden Whip", will be awarded to the best entrants. Egypt's bloggers have exposed many incidents of police torture. In a rare case of security forces being sentenced for abusing detainees, two policemen got three years in jail for torturing a man in their custody earlier this month. Footage of the abuse filmed with a mobile phone was widely distributed on YouTube and sparked nationwide and international outrage. But bloggers who are critical of the government can also find themselves as victims. Egyptian blogger Kareem Amer, who is serving a four-year jail term for insulting Islam and President Hosni Mubarak, has recently been tortured while in custody, reports the Arabic Network for Human Rights Information (HRInfo). Amer, the first blogger to stand trial in Egypt for his Internet postings, has three more years left in his sentence. (Source: IFEX) In brief:- Boudjemaâ Haïchour , the Algerian Minister of ostal Services and Information and Communication Technologies (ICT) announced all the communes nationwide will benefit from high-speed internet connections by 2008. Meanwhile Algerie Telecom announced the launch on December 15 of a new broadband package including telephony, television and internet. - Last week, satellite capacity provider Intelsat announced a new customer agreement with Angolan cellco MSTelcom, to extend GSM coverage. Through recent acquisition and mergers, MSTELCOM has become the larger satellite service provider in Angola. According to Rui Faria, the company’s business development manager, the fast growth has translated in some structural adjustments which impacted on the service quality. This problem will be solved in the new future as the company will soon launch its Wimax network. - Access to business licensing information has been made easier following the launch of a website with the relevant data in Kenya. Users have access to searchable data on all aspects of licensing, including what is required to start a business in any sector of the economy. Investors can also download application forms from the website - www.businesslicense.go.ke.
Nigerian Keyboard Firm Sues One Laptop Per Child ProjectThe One Laptop Per Child foundation is being sued over its keyboard design by the Nigerian-owned, Massachusetts-based firm, Lagos Analysis Corp. Lagos claims the non-profit outfit illegally reverse-engineered their software drivers to make the OLPC keypad more accent mark friendly to foreign fingers. The initial copyright infringement suit has been filed in Nigeria, and the company plans to press further lawsuits in countries where the OLPC laptop is being vended. Lagos CEO Adé G. OyegbÍla said that the company's Konyin Multilingual Keyboard features four shift keys and a software driver specialized to more easily reproduce the uncommon accent marks found in Nigerian languages and dialects. Such diacritic ticks can be unwieldy in traditional keyboards, but are often essential to getting the right message through. (For example, OyegbÍla explains, without the dot below the "o" in Lagos CTO O. Walter OluìwÍleì's name, the meaning becomes "God destroys the house). OyegbÍla claims that Nicholas Negroponte, the Massachusetts Institute of Technology professor who founded the OLPC foundation, purchased two of the company's keyboards in 2006 and used them to reverse-engineer its keyboard technology. Negroponte is also named in the lawsuit. Although the OLPC keyboard lacks the quartet of shifters found on the Lagos board, OyegbÍla claims the exact functionality of the "shift2" button was mapped to the XO's "alt gr." (Source: Daily Trust) New Software to Ease Clearance of Goods between Kenya and UgandaIt will now be easier to process clearance transit goods destined to Uganda from Kenya following development of software that enables the revenue authorities of the two countries to share information instantly. United States development agency USAID and the East and Central Africa Global Competitiveness Hub (ECA Hub) have developed a platform known as Revenue Authorities and Digital Data Exchange (RADDEX) that will among other things increase the risk assessment of the goods on transit. It will also help to increase transparency, accuracy in goods verification and enhance overall efficiency including avoidance of duplicate data capture at border posts. The system will reduce clearing goods to a maximum of six hours instead of six days as has been the case. Clearing agents will also have access to RADDEX, which they will use to download forms and paperwork concerning their transactions so they are in position to clear their goods in hours instead of days. "RADDEX solution enables customs data to be communicated instantly from point of transit origin, through all points of transit, to the point of destination," said Njoki Mungai, public relation co-ordinator for the ECA Trade Hub. This data exchange is expected to reduce customs clearance time and overall transport time with direct benefits to the larger eastern Africa region. Although initial focus is on Kenya and Uganda, the web enabled software solution will be extended to any border countries and along any major transport routes such as the Northern, Central and Southern Corridors. (Source: Business Daily) Kenya’s Copyright Board Takes Piracy War to Cyber CafesCyber café operators within Nairobi are torn between legalising their Microsoft software operating system, shifting to Open Source Code or closing shop all together following the crack down on illegal software. Most cyber cafes in Kenya use Microsoft software but with no valid licences. Jet Cyber and Dagit Cyber Café in Nairobi are the latest companies to be raided on the suspicion of copyright infringement. The raids on the cyber cafes come after the expiry of the October 30th deadline set by the Kenya Copyright Board. During the raid, 50 computers containing unlicensed versions of Microsoft Windows Office 2003 edition were confiscated. Also impounded were Windows 200 and Microsoft 2003 counterfeit installer CD. The computers were valued at Sh1.5 million while the cost of Windows Os and Office are estimated at Sh1.4 million. Edward Segei, a State counsel seconded to the Copyright body, said the owners of the raided Internet Cafes will face charges of copyright infringement. These latest moves have thrown a number of cyber café operators into a tight spot. While some of the operators have got genuine Office operating system and Microsoft Windows, others shifted their operation to the Open source Code system. Irene Wambui, a unit manager at Wang' Point Telecenter attributed use of pirated software to ignorance. "We bought the entire business plus the computers from the previous owner without knowing that the software was not genuine" said Wambui. Wang' Point Telecenter recently decided to buy genuine software. "The shift however came at a cost. While the value of our previous machines were Sh10, 000 we had to spend Sh60, 000 for each of our 17 machines," said Wambui. Another cyber owner operating along Kimathi street who wished to remain anonymous until he installed the Open source software, contemplated between closing the business altogether. "At first when Microsoft officers visited us, they convinced us on the importance of operating on genuine software which we didn't object to, but the manner they are doing it cannot let us sustain our businesses," he said. His dilemma started when Microsoft sent him a letter stating that they would want him to legalise his operating system. However , he says that his business is operating on Windows 2000, but then Microsoft asked them to upgrade to Windows XP. "After testing the Windows XP, we found that it was not suitable for us but they insisted that we must go that way," he claimed. He welcomed legalising software on Windows 2000, to which Microsoft says they did not want to license what they don't support. So, he embraced Open Source. "At first I was hesitant but with what am experiencing, I wish I had gone Open Source long time ago. It did not cost me anything. I closed for two days and installed all the machines with the Open Source software" he says. He adds that if he was to go the Microsoft way he could be forced to increase his charges from 50 cents to Sh5 per minute of surfing "to recover his costs." A Kenyan Open Source Code group Skunkworks led by Ken Kasani are now championing more cyber café to go to Open Source. According to Mr Kasani, the software will manage all aspects of cyber café billing such as Internet time, printing, items, accounts, discounts, the programme will be across platform , it will be possible to run it on both Linux and Windows computers connected on the same cyber works. The package is being developed using FOSS development tools and platform and, therefore, will be released worldwide to other developers who wish to collaborate. Sunkworks are selling software at three points to serve businesses. On pricing, FOSS will be available be free of charge, where the only charges are for installation and improvements . Mr Kasani also says the use of FOSS enhances the PC speed. Using Open Source, one would not need to install an antivirus gadget, making it cheaper. On the other hand, Microsoft Initiative is stemmed from the fact that software piracy and counterfeiting in Kenya has up to recent years been widespread yet discreet. Abednego Hlatshwayo, Microsoft Anti-Piracy Manager for East and Southern Africa says, locally, a significant number of PCs running on counterfeit/pirated software are found in cyber cafés spread out in urban centres and, increasingly, in rural areas, a situation whose ripple effect heavily contributes to poor quality software. This increases information risks, leads to massive unemployment, and loss of revenue to government. "Our Windows Genuine Advantage (WGA) programme provides a platform for consumers to validate their Microsoft Windows software as well as provide notifications to consumers using non-genuine Microsoft Windows XP. Customers using genuine software have access to Microsoft download centre for latest features, updates, and support. "Many customers do not know whether they are running a genuine copy of Windows software, and the WGA notifications feature is a simple and effective way to help them know the status of their software," says Mr Hlatshwayo. (Source: Business Daily) In brief:- The United Kingdom Engineering Council has given the Accra Institute of Technology (AIT) a full accreditation to offer its engineering qualifications through City and Guilds of London, the body that runs the UK Engineering Council Examinations worldwide. - In Nigeria, a new programme named “e-skills and Your Career” has just been introduced on radio by Jidaw Systems Ltd, an ICT human resources and consulting firm. The programme, broadcasted on Wednesdays at 11:40a.m. on Metro FM 97.6 radio station, focuses is on developing skills and career opportunities provided through Information and Communication Technology. - Cisco has reported that the company has set aside Sh1.3 billion to invest in Kenya over the next 24 months to beef up its administration and equipment. At the same time, the firm also announced plans to increase its academies in the country. In partnership with the ministry of Science and Technology, an additional 15 polytechnics will be incorporated into the network. Currently, most local universities have an integrated Cisco network syllabus in their curriculum. - An Indian global consulting and information technology service provider, Satyam, has become the fourth sponsor after Anheuser-Busch, McDonald's and MTN to sign up for the 2010 FIFA World Cup. - Morocco has opened a ICT training centre in the southern city of Guelmim. The centre with a capacity of 700 trainees will aim at providing youths with qualifications adapted to the needs of the market. - A special fund to support the development of e-government in East Africa could soon be established if industry players in the region have their way. Participants at a regional e-government forum in Nairobi said that the lack of funding has slowed down the adoption of e-government in the region. - Tunisia and Syria have signed last week a co-operation in the information and communication technologies field with a particular emphasis on electronic services, applications and postal and financial systems. - The Digital Bridge Institute (DBI), Abuja and the London Metropolitan University, UK have agreed to collaborate on academic post graduate degrees programs in digital communication and computer networking. - Yaoundé, the capital of Cameroon has be chosen as the centre of the Francophone African Network for Telemedicine (RAFT UNFM). - Mozilla has announced the release Firefox 3.0 Beta 1, intended for testing purposes to gain feedback before developing the browser further. Although still buggy, it features improved security, easier use, improved performance, a better platform for developers and more customisation options. - Chanchangi Airlines in Nigeria has said that it will upgrade its facilities to meet up with the May 2008 deadline given by the International Air Transport Association (IATA) for the implementation of e-ticketing. - Egyptian government has announced the selection of SAP as its strategic IT provider for enterprise resource planning (ERP) software. A multi-million dollar five-year agreement beginning 2008, a four-year deal with Egyptian National Postal Organization (ENPO)National Postal Organization (ENPO). In addition, both parties intend to establish a partnership for a certified SAP customer support center in Egypt in an effort to boost job creation.
Sudatel to Buy 70 Percent Stake in Nigerian company IntercellularSudan Telecommunications Company (Sudatel), the national telecoms company of Sudan is to buy 70 per cent share of Intercellular, one of Nigeria's leading privately owned telecoms operator in yet another major take-over in the nation's fast-growth telecom sector, Technology Times confirmed. El-Rufai had hitherto hinted that Intercellular was in talks with an undisclosed foreign operator hoped to inject no less than $150 million and was quoted in a recent interview with Sunday Trust where he admits that previous talks with Telecel to take stakes in Intercellular fell through as "they backed out due to some of the terms and conditions of the agreement." Sudatel, which flagged off as a regional carrier in 1994, also has capital investors are from eight countries including Saudi Arabia, Emirates, Qatar, Yemen, Bahrain, Iran, Sultanate Oman, Jordan, and 14 local and regional banks and 80 local and foreign companies. Sudatel also has stakes in Arab Cables (40%), Thurya Mobile Phone Service, Rascom, Sudanet (51%), Datanet (99%), Hawatif Corporation, among others. Sources in the know confirmed that the two companies will announce the new deal early next year as Sudatel follows the footsteps of fellow Arabian operators that have lately entered the Nigerian telecoms market to consolidate their international expansion into emerging markets. According to el-Rufai, local operators face a huge challenge from securing long term loans to drive their growth in the face of stiffer competition from the bigger GSM operators. "So for us, the best thing to do was to look for equity. I have run around our community (the north), because we are a northern company with 98 percent northern shareholding. But this equity has not been forth coming. We have tried through state governments and other individuals and it’s been difficult. They have not been willing to invest. As a result, we have recorded not quite an impressive success. The result is that today, our equity is only $16million and there is no way you can run telecom with a meagre amount of $16million when you compare with our other immediate competitors like Multi-links, Starcomms and so on. "Some of them have 10 times the equity we have. So it’s been very difficult for us. We made efforts to get foreign investments but you know the problems of Nigeria like the country risk and other infrastructural problems. All these discouraged the investors. But I am glad now that we have two serious interested companies that we are talking to. One is a Nigerian company and one is a foreign one and I hope that we are going to close the deal so that quite lot of money will come into the company and this will coincide with the issuance of unified licence which we have. We can now do full mobile like MTN and others. We have made our plans and by God’s grace within a month we should be able to close and then bring in a strategic investor who will bring a lot of money so that we can rapidly expand and introduce new services like broadband so that we increase internet penetration and introduce other data services." On how the company started after the were sacked from Nitel, he says, "we started this company with a share capital of N200million. It was not easy, but when we were sacked there were a lot of Nigerians that sympathised with us because the peak of NITEL growth was during our time. So they contributed money and then Hakeem Bello Osagie, the then Chairman of UBA said he was going to assist us so he gave us a loan. Motorolla as an organisation, at that time, was doing all it could to break into the Nigerian market but they couldn’t. So they sympathised with us and came to our aid by giving us vendor financing. So we started." (Source: Technology Times) Egyptian Orascom talked with Vivendi about a tie-upNaguib Sawiris, the billionaire head of Egyptian cell phone group Orascom Telecom, has approached Vivendi about a possible telecoms tie-up but the pair failed to agree on price, Les Echos said last Fricay Sawiris said earlier this month that the minute there was an opening in France "we will go there." Vivendi declined to comment on the report. The French newspaper said Sawiris had proposed to Vivendi to either do an equity swap, sell part of its assets or take a stake in the Paris-based media and telecoms group. The paper added that Sawiris had borrowed 4-5 percent Vivendi voting rights from French bank Natixis to put together a complex deal. Vivendi controls Maroc Telecom and SFR, France's number two mobile operator, while Sawiris' telecoms investments span Egypt, Algeria, Pakistan, Tunisia as well as Wind, Italy's third largest Italian mobile carrier. Orascom Telecom is the fourth largest Arab mobile operator by market value. Vivendi has been looking to invest in North Africa but failed to grab Tunisie Telecom and announced this week that talks to take a stake in Oger Telecom had ended without a deal. Oger Telecom, which is majority owned by Saudi Oger, in turn controlled by relatives of late Lebanese prime minister Rafiq Hariri, provides fixed-line, mobile and web access in Turkey, Saudi Arabia, South Africa, Lebanon and Jordan. Les Echos said Sawiris was considering buying France's fourth 3G license in partnership with broadband provider Iliad. Sawiris said earlier this month he had recently met with Martin Bouygues, who controls France's third largest mobile phone operator Bouygues Telecom, but had no concrete acquisition discussion with him. (Source: Reuters) Foreigners to Pay More for Safaricom Shares in KenyaForeign investors wishing to buy into mobile phone operator Safaricom Ltd must be prepared to pay much more than the price local investors will pay for the same shares during the company's planned initial public offer. Sources involved in putting together what is set to be the largest IPO ever in sub-Saharan Africa revealed to The EastAfrican that the decision was made because the government felt it would be inequitable to allow foreigners to benefit from the discounted price local investors will be paying for the shares. But citizens of member states of the East African Community countries of Uganda Tanzania , Burundi and Rwanda will be treated as local investors, according the draft prospectus now before the Capital Markets Authority for final approval. The advisers have proposed an allocation formula that divides the IPO into two: A local investors' tranche and an international tranche. In turn, the local investors' tranche has been divided into four investor categories, namely employees of Safaricom; dealers of Safaricom; qualified institutional investors; and retail and corporate investors. It is understood that the foreign investors' tranche will take between 20 and 35 per cent of the offer, depending on the valuation of the company. In a departure from past practice, foreign investors will this time around buy the shares through a book building process managed by UK investment bank Morgan Stanley. However, all licensed brokers and agents will be allowed to scout for foreign investors and place orders in the book as long as the orders are accompanied by a bank guarantee. Consequently, the lead transaction adviser will determine the offer price for the international tranche, which, according to the proposal, will have to be higher than the price of the local tranche. Morgan Stanley, the book runners, will determine the minimum application size in the international tranche. Away from the limelight, debate has been raging in the local investment banking community over whether or not it makes sense to create a special investor category for foreigners. Critics have argued that the local market is large enough to absorb Safaricom and that there is no need to make a large allocation for foreign investors. The opposite view is that in view of the fact that the existing investors on the Nairobi Stock Exchange are likely to liquidate the shares they currently hold to purchase Safaricom - and considering the size of the issue, now estimated at between Ksh55 billion ($821 million) and Ksh70 billion ($1.04 billion) - the international tranche will be the one to provide liquidity and stability in the market, especially during the critical aftermath trading period. Indeed, pundits are already predicting that the advent of Safaricom and the anticipated massive liquidation of existing shares for the cash to buy Safaricom is likely to precipitate an unprecedented bear run on the Nairobi Stock Exchange that could see the value of the market go down by as much as 80 per cent. The case for the international tranche is also being supported on the grounds of macroeconomic consequences, the argument being that the size of the Safaricom issue is likely to tighten the market and precipitate unpredictable movements in short-term interest rates, inflation and the exchange rate - hence the need for the participation of internationals. (Source: The East African) Black-Owned Telecoms Firms Buy Stake in Nokia Unit in South AfricaTwo black-owned telecoms investment companies are taking stakes in the local operations of Nokia Siemens Networks. No value has been disclosed for the deal, under which Sekunjalo Telecoms and Africom Telecom Holdings each take 13% of Nokia Siemens Networks Holdings RSA, which is the parent company that holds 60% of the operating entity Nokia Siemens Networks SA. Reunert holds 40%. The overall result of the deal is to give Nokia Siemens Networks SA a black shareholding of 18,9%, partly achieved through Reunert's existing 9,5% black ownership. The companies are paying market value for their stakes, and are borrowing the cash from Rand Merchant Bank. Linda Khumalo, the head of Nokia Siemens Networks SA, said the move was the first phase of its black empowerment compliance process. Nokia Siemens Networks was formed by merging the infrastructure divisions of Nokia and Siemens to gain economies of scale by becoming one of the world's largest telecoms infrastructure suppliers. Sekunjalo Telecoms and Africom Telecom Holdings already hold shares in the local operations of Siemens, making them the obvious choice of black partners for the newly created Nokia Siemens Networks, said Khumalo. "It is a relationship that we have inherited, but this is a new shareholding deal to get Nokia Siemens Networks compliant with the black empowerment codes of conduct." (Source: Business Day) In brief:- Dubai-based private equity group, Alcazar Capital intends to invest some US$58.5 million in Telkom Kenya as part of a France Telecom-led deal that gives 51% of the country's telecommunications firm to the consortium. - TeleTech, a multi-national business processing outsourcing (BPO) giant has decided to establish a facility in South Africa. The company already employs more than 50 000 people in 18 countries and Cape Town is its first base on the African continent. - Despite the relative slowdown being experienced by companies all across the South African technology channel, Tarsus Technologies has reported strong growth figures for the first half of 2007 with the biggest growth percentage-wise coming from the sub-Saharan Africa market. Another strong growth market for Tarsus has been the retail vertical, where its investments in new product lines such as HP's Pavilion range have achieved very favourable progress. - Telecoms player the Huge Group has made a R511m bid to buy 59% of Durban-based iTalk Cellular, an airtime and handset dealer with national outlets selling airtime exclusively for MTN.
Web and Mobile Data NewsJump Shopping Goes Mobile in South AfricaSouth African online shopping search engine Jump Shopping has recently launched a mobile offering of its popular search engine Jump.co.za. Jump Shopping Mobile enables users who are not in front of their computers to search through more than 3 000 000 products from 100 online stores in South Africa. This service can be accessed by using any web-enabled mobile phone and entering m.jump.co.za into the mobile browser. "It makes perfect sense to launch such a product, as there are more mobile phone users than PC users in South Africa. This is a great initiative that empowers the consumers of South Africa and give them the ability to look for comparative prices while shopping in the real world," says Albert Bredenhann, MD of Jump Shopping. Bredenhann says that South Africa has more than 28 million mobile phone users (out of about 38 million accounts) and recent research and media coverage shows that South Africa's mobile users are using their mobile phones for more than just local calls BBC reports 20% of its international WAP traffic (web site visits from cellphones) originating from South Africa; Opera Mini, a leading mobile browser, reports South Africa as one of its top five territories worldwide; an international mobile advertising network claims over 60 million page views per month originating from South Africa. In January 2007, Jump Shopping sold 22% of its business to BidorBuy Inc in Delaware, US. (Source: Biz-Community) Kibaki Makes Use of Websites to 'Woo' Voters in KenyaKenya's president and presidential candidate, Mwai Kibaki has released his campaign website to improve his chances of re-election. Kibaki is fighting for re-election and his website includes comprehensive reports and pictures on Kibaki's life and times as well as records of his achievements since assuming presidential office in 2003. "This website is a useful tool for those who are keen to contribute good ideas and finances that will make the campaign even more effective and popular with the voters," he said. Analysts and some opponents say the website is a far cry from its usefulness because many Kenyans are still grappling with the inconveniences of the digital divide. Furthermore, though the site is free, the majority of Kenyans, particularly those in the rural areas have neither the knowledge nor access to the internet. Party officials are however upbeat about the website that it will not only focus on the presidential candidate but will also highlight the political achievements of women. Women candidates vying for parliamentary and civic seats under the President's party have been asked to make use of the website as their political platform. Kibaki said, "Let us use these communication tools to ensure that the campaigns are peaceful with no physical and verbal violence." A key rival of Kibaki in the presidential elections is Mr. Raila Odinga of the Orange Democratic Movement (ODM) and his website was launched in the middle of this year. (Source: Highway Africa News Agency)
People- Elvis Eromosele, correspondent on the information and communication technology (ICT) desk of Financial Standard Newspaper has won the Best ICT reporter (print) at the Nigerian Information, Technology and Telecommunications Award, NITTA 2007 which held recently in Lagos . - Unisys has announced the appointment of Dick Tilley as VP and GM for emerging markets, covering the company's Africa, Eurasia and Middle East (AEME) regions. The company has also announced the appointment of Kevin Fynn as VP and GM for Unisys in Africa, reporting directly to Tilley. Both appointments are with immediate effect. - Former President Nelson Mandela is to be named Honorary Laureate of the Mo Ibrahim Prize for Achievement in African Leadership on Monday. Events- MED-IT@DAKAR 2007 4-5 December 2007, Hotel Méridien Président, Dakar, Senegal 3rd B2B exhibition specialised in IT. Exhibition, conferences and business rendez-vous in order to establish strategic partnerships between French, North African and Senegalese IT professionnals Visit our web site : http://www.medit.eu.org - INTEROPERABILITY. OPEN STANDARS AND OPEN SOURCE FORUM 5 December 2007, CMC Building (corner Long and Wale) 44 Wale Street, Cape Town, South Africa In line with CITI’s FOSS programme for 2007/8, we have invited Microsoft SA to speak on Interoperability, Open Standards, and Open Source and its direct impact on the IT sector in SA. If you have an OSS company or are interested in hearing Microsoft’s official stance towards Open Standards and Open Source, book your seat now. To attend, contact Leigh Holt, leigh@citi.org.za - 3rd REGIONAL WORKSHOP ON MEDIAS AND ICT ISSUES IN WEST AFRICA 13-15 december 2007, Dakar, Senegal The workshop entitled “new journalism, new technologies, improved governance” will aim at promoting uses of blogs and new ICT tools by medias for improved governance in West Africa and strengthening reporting on ICT in the region. For further information on the workshop please contact Judith Lenti jlenti@panos-ao.org or Ken Lohento contact@cipaco.org at PIWA. - E-TISSAL EXPO 2008 6-8 February 2008, International Congress and Expo Center of the Exchange Office of Casablanca, Morocco. e-Tissal is organized by the media and communication professionals for every professional that creates, uses, delivers or services media and communication in the Mediterranean, African and Middle East Region, the third most active media market in the world. For further information visit http://www.e-tissal.com/ - ICT AFRICA 13-15 February 2008, 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/ - THE AFRICAN BANKING TECHNOLOGY CONFERENCE 19 -21 February 2008, Kenyatta International Conference Centre, Nairobi, Kenya The conference theme is “sharing knowledge and best practices in banking across Africa”. For further information click on www.aitecafricac.om Jobs and OpportunitiesCORE SUB PROJECT MANAGER – SOUTHERN AFRICA The client is urgently requesting the services of a experienced Sub Project Managerr to work on a project of huge importance. It is imperative that the candidate has a strong background working directly for Ericsson or alternatively at a Ericsson based operator. Your responsability as Sub Project Manager will be as follows:- - Management of core network rollout projects including MSS, HLR installation and integration as well as software upgrades.. - Management of service layer rollout projects including Mediation, Billing and GPRS installation and integration as well as software upgrades. - Responsible for all implementation and delivery projects including quality control, project reporting, customer liaison & coordination, project This is a fantastic opportunity for career orientated engineers seeking significant career progression, development and in addition an opportunity to work in a project of huge status within an extremely competitive and demanding market place. For further information contact advertising@balancingact-africa.com - TENDER TO DESIGN, SUPPLY AND IMPLEMENTATION OF BOTSWANA NATIONAL EXAMINATIONS PROCESSING SYSTEM Bids are invited from suitably qualified professional organisations to provide the services specified in the Tender No. BEC IT 001/07 - Design, Supply and Implementation of Botswana National Examinations Processing System. Tender documents will be available with effect from Monday, 12th November 2007 on payment of BWP500. Bids must arrive no later than 10:00 am (local time) on Wednesday, 5th March, 2008. The tender documents can also be downloaded from the Government of Botswana web site http://www.gov.bw/business/tenders.html Contracts* Neotel, ECI, BroadGate Systems – South Africa Neotel has selected ECI XDM and BroadGate systems for the building of its national next generation transport backbone network. * Algerie Telecom and Ericsson - Algeria The Swedish vendor Ericsson has been selected by Algerie Telecom to supply a softswitch solution which sets the stage for Algeria’s largest telco to migrate to an all-IP network. Ericsson will supply its Telephony Softswitch solution to upgrade the operator's national transit layer to a next generation network architecture. The changeover is expected to be completed by the middle of next year, bringing a wider range of advanced services to Algerie Telecom’s 3.5 million subscribers.
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