Safaricom Kenya warns about damaging price war
Safaricom Kenya has warned that an on-going price war between the country’s mobile networks cripple the industry. Safaricom Chief Executive Bob Collymore stated that the price wars would cost the industry 320.58 million in revenue this year alone.
Telkom Kenya chief executive Mickael Ghossein had earlier in the week voiced similar concerns, saying with low profit margins, operators would not see the point in reinvesting in infrastructure to up quality.
The price war was sparked by Airtel, which recently took over the former Zain network and stated that it had doubled its subscriber base to 4 million in less than six months.
Collymore added that they believe the industry will lose revenues of between US$240-320 million as a result of this. Safaricom was unlikely to follow Airtel in cutting tariffs. That price is unsustainable, we are unlikely to move to that level because he had been charged with looking after the responsibilities of not just customers but also shareholders. He accused Airtel of putting Safaricom and the entire industry at risk through its strategy of offering calls at rock bottom rates.
Based on figures from last September – only a few weeks after the price cuts by Airtel – the Mobile World subscriber database reports that Safaricom is the market leader with a market share of 81% with Airtel (formerly Zain) coming in at 8.6%. Newer entrants, Econet had 7% of the market while Orange (Telecom Kenya) had 3.6% of the market.
Econet’s investment to reach $900 million soon (Zimbabwe)
Econet Wireless Zimbabwe’s CEO Douglas Mboweni has stated that the GSM, 3G and WiMAX operator is in the middle of investing an additional USD300 million in its networks to bring total investment to date to USD900 million.
According to Mr Mboweni, from the time the company started operating in October 1999 up to the time they published their financial results in February this year they had spent about US$600 million. Amid February this year and part of next year they are looking at putting another US$300 million to upgrade the equipment that they have and also extend network coverage throughout the country. Econet has seen its subscriber base grow from 1.2 million in March 2009 to over five million as of last month.
As per Mboweni, the company would set its next subscriber target at the beginning of the next financial year in March depending on service demand. On another topic, asked to explain the reasons behind the reported problems subscribers had been having accessing services, disruptions sometimes occurred as a result of upgrades to network systems, mainly due to sourcing technology from different suppliers, including Sweden’s Ericsson and ZTE of China.
Econet appeals government for $38 million recovery (Zimbabwe)
Econet Wireless Zimbabwe, the country’s largest mobile operator, has appealed to the government to help it recover US$38 million in call termination fees which it claims is owed by state-run fixed line incumbent TelOne.
The cellco claims that TelOne has not paid it any fees for terminating fixed-to-mobile calls on Econet’s network since January 2009, when the sector began a changeover from local currency to US dollars.
Econet chairman Tawanda Nyambirai on Wednesday appealed to Vice-President Joice Mujuru during a government-business conference held in Harare, for assistance in recovering the accumulated monthly arrears.
Econet subscribers’ base grows by 233% (Zimbabwe)
www.WirelessFederation.com/news: The mobile subscriber base of Econet Wireless Zimbabwe has been claimed to be increased by 233%, from 1.2 million to four million in the twelve months ended March 31, 2010. The result of the financial year to the end of February 2010 has also been announced by the GSM operator.
Econet recorded annual revenues of USD362.8 million, up from USD88 million in the previous year, posted EBITDA of USD179.3 million up from USD27 million a year before, operating profit of USD158.2 million and net profit attributable to shareholders of USD114.6 million.
CAPEX was USD160 million, up from USD124 million the year before and a CAPEX of USD300 million has been announced for the current financial year ending February 2011. Two new switching centers have been commissioned by Econet in the twelve months to end-February 2010. Two switches are now operating in Harare and one in Bulawayo.
Bharti board approves $9 billion Zain deal (India)
www.WirelessFederation.com/news: After the approval of the Bharti’s bid for $9 billion purchase of Zain’s African wireless assets by its Board, the company is planning to make a formal offer this week. Both Bharti and Zain are under exclusive talks till March 25, for the completion of the deal that will give Bharti an access to 42 million new subscribers in 15 African countries.
Bharti has sought overseas businesses as competition at home has reduced call rates for many of its 122 million Indian subscribers to as little as half a U.S. cent a minute.
Zain at the same time has been asked to provide legal protection from a dispute in Nigeria. Econet Wireless Holdings Ltd., based in a suburb of Johannesburg, is disputing control of Zain’s unit in Nigeria. The Nigerian operations have been described by Bharti chairman Sunil Mittal as the most important piece of its planned purchase.
A 2006 deal is seeked to be overturned by Econet in which Celtel bought a 65 percent stake in Nigerian mobile operator Vmobile, since renamed Zain Nigeria.
Airtel posted its biggest gain since November 30 adding 3.9 percent on March 19 to close at 311.90 rupees in Mumbai trading.
Telecel intends to double its subscriber base by Oct-end, roll-out 3G (Zimbabwe)
www.WirelessFederation.com/news: Telecel Zimbabwe, third largest operator in terms of subscribers, is reportedly planning to roughly double its base to 700,000 subscribers by the end of October 2009, and said it also intends to roll-out 3G services. Acting chairwoman Jane Mutasa said that Telecel Zimbabwe had 355,000 subscribers at end-July. According to a report, NetOne had less than 400,000 subscribers, where as the market leader Econet Wireless Zimbabwe was ahead with more than 1.25 million SIMs in operation.
Africa closes tech gap with flashy phones
Rickety minibus taxis weave between corrugated iron shacks, dodging street hawkers and the odd scrawny child with trousers gaping at the knee.
Alexandra is one of South Africa’s roughest townships, and yet you can switch on your laptop there, slide in a data card and access your e-mail in seconds using the world’s most advanced commercial wireless technology.
About a decade after mobile phones started to spread across the poorest continent, trailing Europe by several years, wireless technology in major cities is catching up with that in the West.
South African mobile operators Vodacom and MTN in March launched HSDPA (high-speed downlink packet access), wireless broadband technology that is five times faster than the first third-generation (3G) networks. With top download speeds of more than 1.5 megabits per second, the equivalent of a fast broadband connection at home, HSDPA is known as 3.5G.
The March launch came barely days after T-Mobile launched commercial HSDPA networks in Germany, Britain and the Netherlands and before customers in Finland, France and Italy could access the new services.
“African operators are definitely catching up, or at least following closely behind Europe,” said Devine Kofiloto, principal analyst at Informa telecoms and media research group. “Whether there is a business case (for 3 or 3.5G) is a different question.”
Customer priorities
In Europe, 3G was initially promoted for video calls, mobile video and music downloads. When 3G and 3.5G first launched in South Africa skeptics noted that downloading the latest Madonna track was probably not the top priority for millions of Africans who had yet to make their first phone call.
“African markets are essentially voice-centric. What could low-end users possibly use 3G technology to do?” said Kofiloto.
3G and 3.5G coverage rarely extends beyond upmarket urban areas–Alexandra is close to Sandton, Johannesburg’s main business district. But that could be about to change.
Namibia’s MTC said last week it would launch HSDPA before the end of the year. Vodacom, joint owned by Vodafone and fixed-line operator Telkom, is building a 3.5G network in Tanzania and Econet aims to launch the service in Zimbabwe.
Basic mobile phone use has exploded in Africa and many Africans would rather spend scarce spare cash on phone service than on new shoes.
Proponents of the new technology argue demand for high-speed Internet access via 3.5G data cards or phones could be huge among small businesses in countries where fixed-line infrastructure is patchy and unreliable.
3G and 3.5G services will generate more than one quarter of mobile revenues within four years, according to market research group Strategy Analytics.
“There is a clear case for 3G and HSDPA in Africa because the fixed line infrastructure is simply not there,” said David Pringle, spokesman for lobby group GSM Association.
“The seeds are being sown in the urban areas, but when prices come down this will be viable for ordinary people.”
Source- http://news.zdnet.com
Technorati : Africa, HSDPA, Handset, MTN, Mobile, T-Mobile, Vodacom
Ice Rocket : Africa, HSDPA, Handset, MTN, Mobile, T-Mobile, Vodacom
