Wireless Federation

Malawi based mobile operator, (Telekom Networks Malawi) TNM has announced that it has set aside $28-million to upgrade its network and expand coverage in rural areas. The move follows an announcement by rival operator, Celtel Malawi last month to spend US$90 million on expanding its network over the next year.

Celtel is the larger of the two networks operating in Malawi, and according to figures from the Mobile World database, ended last year with 654,000 subscribers which represents a market share of 60%. The country itself however had a population penetration level of just over 8%.

Last year, Malawi Information and Civic Education Minister Patricia Kaliati warned that the government would revoke the telecom operator licences if they didn’t expand their coverage to rural areas.

The Malawi telecoms regulator, Macra also recently started advertising for a fourth mobile phone operator, even though the license for the 3rd operator has still not been allocated. Malawi’s Minister of Information and Civic Education, Patricia Kaliati said that the country needs more competition in the phone market to drive down prices and improve rural coverage. She also said that the outstanding 3rd license would be granted once a new board is elected to manage the regulator.

Wireless Mobile Telecom Wireless News

Celtel Malawi, a subsidiary of Middle East and African telecoms firm Zain Group, says it plans to invest USD90 million in its financial year 2008/09 to improve its network and extend coverage to all parts of the country. The operator also hopes to use part of the monies set aside to enable it to reduce the cost of its handsets. The decision to cut mobile phone costs is a result of the government’s recent initiative to implement new tax measures, it said. In the 2008/2009 national budget presentation, the government announced it was scrapping a 25% customs duty and excise on imported handsets, but introducing in its place a 10% domestic excise tax on airtime.

Wireless Mobile Telecom Wireless News

The atmosphere appears friendly and jovial at a five-star hotel in Nairobi, where a collection of academic dons fawn fondly over their young scholars basking in the media spotlight.

But beneath the warm, fuzzy feeling in the room, there is an underlying spirit of cut-throat competition disguised by friendly smiles and hearty pats on the back.   The guests— mostly university students and their dons— are gearing up for the second round of the Celtel Africa Challenge television game show, where up to Sh16 million in university grants is up for grabs.

“We are already gearing up for our second win.  The competition shows that quality education is an important tool for poverty reduction and we are glad that the effectiveness of our education system is being proven,” said Prof James Tuitoek, vice-chancellor of Egerton University. The university won last year’s edition of the inter- university quiz show.

For participants in what was a hit on TV airwaves last year, the Celtel Africa Challenge re-created a new form of educational competition last seen in the days of the Voice of Kenya’s educational competitions, which pitted high school students against each other in the eighties.

A modern version of the televised educational test of wits, Africa Challenge, pulled surprisingly big  audiences to become the  most- watched television programme in its category. It  beat other more publicised shows such as Tusker Project Fame and Popstars in ratings.

“These students are stars in their own right.  I think they are even bigger celebs than those on the other shows because they have to be all-rounders — they don’t have just one area of expertise,” said Adrian Onyando, a lecturer at Egerton University’s Department of Literature and the team liaison  for the university’s representatives to the TV show.

Although watching nerdy students answer difficult questions may not necessarily beat the glamour of discovering  a singing sensation , the Challenge still managed to become the most watched show for the 15 weeks it ran last year.

As a measure of how university students are able to think and reason on their feet, the  game show provides viewers and more importantly, prospective employers, with a practical yardstick to gauge youths’ knowledge .

Analysts say more consumers are warming up to the game show trend as loca  consumers’  viewing habits  evolve to satisfy a more sophisticated customer who wants to get intellectually stimulated from what he watches.

“Watching a bunch of people vie  for money has a timeless appeal.  The bigger the stakes, the better, but in general most viewers want interactivity with their television sets; they want that ‘ah ha’ moment when they feel smarter than who’s on the TV,” said Suzanne Scott, an independent ratings analyst based in the United States.

This season, Celtel Kenya is spending a hefty Sh277 million to produce the second  contest as part of its Corporate Social Responsibility programme.  The firm says the show helps employers gauge the education levels of prospective employees.

The first season of the Celtel Africa Challenge was won by the team from Egerton University, who collected the attractive US$ 50,000 university grant and US$5,000 per student prize kitty.

During the competition, students were given Sh35,000 if they correctly answered questions such as “which single celled animal propelled by pseudopods begins and ends in an A?”

“We had to get input from all kinds of sources to prepare for the competition.  We were only able to train for two months for season one.  For the second season— we extended that to three months,” said Mr Onyando.

The students even trained while the post election violence was going on—that is how seriously we take the game,” he adds.

He says although his team is confident of a second win this year, he spends sleepless nights wondering about the competition.  He expects the University of Nairobi and Strathmore teams to give his team of four stiff challenge this time around.

The show, which is televised simultaneously across Kenya, Tanzania and Uganda on Nation Television, ITV and Uganda Broadcasting Corporation, started last Sunday.

This year, the show has been expanded to include Malawi and Zambia, with more universities participating.  Kenya, Tanzania and Uganda will be represented by four universities each while Malawi and Zambia, which are competing for the first time, will have two teams each in the Celtel Africa Challenge Championship.

Good teams are formed of smart students who know the rules of the game and understand how to play; but great teams understand how team mates play, which combinations of players are the most successful and which strategies are necessary, says a guideline sent to universities to help them prepare for the show.

“This is definitely not a one-man show—we needed to work as a team to win the competition.  We hope that our unity will see us through to the end,” said Mr  Onyando.

Wireless Mobile Telecom Wireless News

Mobile operator Celtel International, part of the Zain group, has extended its ‘One Network’, the borderless mobile network in Africa, to an additional six countries. These are Burkina Faso, Chad, Malawi, Niger, Nigeria and Sudan. These countries now join the Republic of Congo, the Democratic Republic of Congo, Gabon, Kenya, Tanzania and Uganda in the network which was initially launched in September 2006. All Celtel’s customers both prepaid and postpaid in the twelve countries from East, Central and West Africa, can move freely across geographic borders making calls and sms at local rates. They can top-up their prepaid phones with locally-bought airtime cards. The One Network service is automatically activated upon crossing into any one of the other countries, with no prior registration required or sign up fee charged.

Wireless Mobile Telecom Wireless News

Celtel International is considering a major re-branding strategy that would see it drop the ‘Celtel’ brand and adopt a completely new identity - Zain. The plan is expected to create unique difficulties in Kenya and Nigeria, where the Celtel brand is still quite new, as well as across all non-Arab operations. It is part of a long-term strategy by Kuwait’s MTC Group, which owns the mobile telephone operator, to re-invent itself through the launch of a global brand.

MTC, which has expanded significantly through acquisitions, is seeking to consolidate recent growth under one banner. “We have a new brand that will be launched as single global brand for all our operations,” Dr Saad Al-Barrak, MTC’s deputy chairman and chief executive officer, said recently. “We will start any new operation with this new global brand.”

Controversy

Controversy has already erupted over the brand name chosen. Critics feel Zain, leaked in Kuwait in early August, has limited appeal to cultures outside the Arab world. A recent valuation of MTC by analysts from investment banker Morgan Stanley found that Africa accounted for 70 per cent of the company’s fair value.

MTC Chairman, Mr Asa’ad Al Banwan , Celtel International Chairman, Mr Mo Ibrahim, and MTC Deputy Chairman & Managing Director, Dr Saad Al-Barrak. Photo by MTC

The new logo has also been described as too dark and moody. The re-branding process has reportedly begun in Kuwait and is expected to spread to other MTC-branded operations in the Middle East.

Change will come to Africa and its Celtel-branded operations from 2008. The new changes come shortly after a regional marketing blitz to announce the expansion of Celtel’s borderless mobile network to include the Republic of Congo, Gabon and Democratic Republic of Congo. The service was previously limited to Kenya, Uganda and Tanzania. The decision to re-brand will create a costly marketing and logistical challenge for the Kenya and Nigeria operations, given that the two only recently re-branded to Celtel from KenCell and V-Mobile respectively.

The change from KenCell, which began in 2004, is yet to be completed by Celtel Kenya: Many of their telephone booths - admittedly an atrophied part of the business - are still branded KenCell. Nigeria’s switch from VMobile, which began last year, will also have to be scrapped.

A huge task

Speaking to FS during the Second Annual Connecting Rural Communities Africa Forum in Nairobi, Mr Mwaghazi Mwachofi, Celtel International Vice-President for Regulatory Affairs, confirmed that discussions on rebranding were in progress. “Nothing has been decided as yet, nothing concrete,” Mwachofi said when pressed on the matter.

“The Celtel brand is strong and powerful and re-branding is huge task.” MTC Kuwait is also expected to form a new subsidiary, MTC International, as a private company to hold all the MTC Group’s foreign assets and operations.

A newspaper report on the plan several weeks ago saw the Kuwait Stock Exchange halt trading in MTC shares pending clarification of the issues raised.

A local Arabic-language daily had reported that MTC was going to form an entity with $1.73 billion (Sh116 billion) in capital as an umbrella company under which MTC Kuwait and MTC International, called Zain, would operate.

The paper had also said the international unit would sell a stake - possibly 40 per cent or more - in an initial public offering on the London Stock Exchange next year. The re-branding confirms MTC’s ambitions to become one of the biggest mobile operators in the world.

The strategy

According Al-Barrak, the company was looking for a global brand that would work from China to Gabon, in Rio-de-Janeiro and Madras, in Moscow and Iceland. Currently, MTC is looking to fill gaps in sub-Saharan Africa - for example Angola Ethiopia and Senegal - and eyeing Saudi Arabia’s third licence. The company is also making noises about moving its headquarters because of Kuwait’s investor-unfriendly laws.

“The Kuwaiti business environment repels investment and the country’s laws are not good for a financial hub,” Al-Barrak was recently quoted as saying. Kuwait has been dragging its feet on reforms to create a more transparent stock exchange.

Another Kuwaiti law imposes a 55 per cent tax on foreign investors. MTC, Kuwait’s largest publicly traded company, said last week that it could move to Dubai or Bahrain, the Gulf’s financial centres, or to Amsterdam, headquarters of its subsidiary Celtel. The firm operates in Bahrain in partnership with Britain’s Vodafone Group and acquired Netherlands-based Celtel in 2005. It has no presence in Dubai. “MTC is today thinking on the global scale… especially since Kuwait accounts for only 15 per cent of its revenue, (a figure that) will fall below seven per cent in the next two years.” Incorporated in 1983 in Kuwait, MTC now has a presence in 20 countries.

The Group is a leading mobile operator in six Middle Eastern and 14 sub-Saharan African countries providing a comprehensive range of mobile voice and data services to over 29.7 million active individual and business customers.

It operates in Kuwait and Bahrain as MTCVodafone, in Jordan as Fastlink, in Iraq as MTC-Atheer, in Lebanon as MTC-Touch and in Sudan as Mobitel. It also has 14 operations in sub-Saharan Africa as Celtel. These are Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Kenya, Malawi, Madagascar, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia. The company has also won Saudi Arabia’s third mobile license and is expected to roll-out a network soon. The change of identity is part of MTC’s plan to re-brand its operations across all networks in line with their “three by three by three (3×3x3)” strategy.

Wireless Mobile Telecom Wireless News
 

Celtel Malawi, a unit of Kuwaiti cellco MTC, boosted its subscriber base to half a million at the start of August from the 376,000 it had before a fire damaged its network in late March. Managing Director Charles Zouzoua told news service Reuters that Celtel Malawi, the country’s largest cellco, had repaired its network since the fire and had about 68% of the mobile market, compared with some 30 percent five years ago.

Malawi has two mobile network operators; Celtel, and its rival Telekom Networks Malawi (TNM), which is partly owned by the government and the country’s Press Corporation conglomerate.Malawi had a mobile penetration of just over 4% at the end of 2006, and a fixed-line teledensity of less than 1% at the same time, one of the lowest in the world.

Wireless Mobile Telecom Wireless News
 

The World Bank’s International Finance Corp (IFC) has announced it will invest USD32.5 million in a fibre-optic cable project that will provide internet and international communication services for 21 African countries. The IFC, the private-sector arm of the World Bank that focuses on investing in emerging market economies, said the cable project should improve telecommunications access for 250 million Africans and cut costs for individuals and businesses. The project, called the East African Submarine Cable System, is to run 10,000 kilometres from the continent’s southern tip to the African horn. It will connect South Africa, Mozambique, Madagascar, Tanzania, Kenya, Somalia, Djibouti and Sudan. A further 13 countries will share the system through land links. They are Botswana, Burundi, Central African Republic, Democratic Republic of Congo, Chad, Ethiopia, Lesotho, Malawi, Rwanda, Swaziland, Uganda, Zambia and Zimbabwe. Mohsen Khalil, IFC’s director of global information and communications technologies, said in an interview the project’s total cost will be USD235 million and said it is a cooperative effort between private and public interests designed to ensure that prices do not fall under monopoly control and rise. ‘Consumers along the east coast of Africa typically pay between USD200 and USD300 a month for internet access,’ the IFC said. ‘As a result of this project, prices for international connectivity will drop by two-thirds at the outset and the number of subscribers will triple.’ Construction is to start within weeks and the cable is scheduled to be in operation by early 2009.

Wireless Mobile Telecom Wireless News

Incumbent telco Malawi Telecommunications Limited (MTL) is looking into installing a cross-border fibre-optic link with its counterpart in neighbouring Mozambique, Telecommunicacoes De Mozambique (TDM). The proposed connection will be between Mwanza in Malawi and Zobue in Mozambique. MTL chief technology officer Peter Boll said the USD25 million project would connect the neighbouring countries and eventually allow onward connection to the rest of the world. ‘The implementation schedule of this project, and main construction works from Blantyre will start during the third quarter of 2007,’ he said. TDM’s Head of Technical Planning Division Moises Alexandre Nhabanga said, ‘This project will improve communication capacity and quality and will allow Malawi to connect through the EASSy cable project, having a landing point on the coast of Mozambique.’ Malawi Communications Regulatory Authority (Macra) Director of Telecommunications Mike Kuntiya welcomed the scheme, saying, ‘This project is a welcome idea as it will form part of the broadband network that government has been encouraging operators to come up with.’

MTL will also be commissioning a microwave link connecting Lilongwe with Mchinji in Zambia and extending the Mzuzu-Karonga microwave link in northern Malawi to Dar-es-Salaam, the former capital of Tanzania.

Wireless Mobile Telecom Wireless News
 

Three local companies have joined two foreign firms in the race for a licence to deploy mobile phone services in Malawi. The Malawi Communication and Regulatory Authority (MACRA) has revealed that local concerns Malcom Ltd, Megatel Communications Ltd and Globally Integrated Networks have submitted bids, alongside Econet Wireless International of South Africa and Millennium Globe Telecom Ltd of the USA. The regulator is evaluating the bids to check if they were in line with specified guidelines. A spokesperson for MACRA said, ‘We check compliance to instructions as contained in the invitation to apply document, which include the need to indicate the financial capability and technical capacity among others. This is a capital-intensive investment and it is expected that bidders should have enough financial resources.’ There were eleven companies that obtained bid documents, but only five applied. The winner will join established cellcos Celtel and Telekom Networks Malawi.

Wireless Mobile Telecom Wireless News

Malcom, Megatel Communications and Globally Integrated Networks have all submitted bids for a mobile phone licence in Malawi. These local companies join two foreign bidders: South Africa’s Econet Wireless and US-based Millennium Globe Telecom. These five companies are the only ones to submit bids from 11 companies who purchased bid documents. Malawi currently has two mobile network operators: Celtel and TNM.

Wireless Mobile Telecom Wireless News