Safaricom and Airtel consider strategic partnership for fibre network (Africa)
Telecom operators Airtel Africa and Safaricom Kenya may be looking to enter a partnership to lay a fibre network in Africa, enabling them to reduce costs. According to reports, Safaricom Kenya offered the partnership to Telkom Kenya and Essar as well, but Airtel Africa responded positively.
As per the reports, Bob Collymore, CEO of Safaricom, said that they are going to roll out the fibre in the coming financial year. It will involve partnering with other mobile operators. Safaricom and Airtel have a long standing Tower Sharing Agreement and we have similar agreements with Telkom Kenya and Essar. Therefore, collaborating in fiber optic network deployment is an extension of this and will ensure that operators minimize costs while avoiding duplication.
He added that they have mentioned in the past that the strategy remains one of “in filling” which means that they focus on building fiber in the areas that have no infrastructure whilst avoiding unnecessary duplication.
Vodafone receives partial approval to raise stake in local venture (India)
Vodafone Group PLC had filed an application with the Indian government seeking permission to raise its stake in its local venture by buying out its local Indian partner. Latest reports state that the telecom giant had received partial approval from the government for the same.
As per reports, India’s Ministry of Finance has said that since the transaction is between non-resident companies, there is no foreign equity inflow. However, another application filed by Vodafone Essar Ltd. to transfer shares from a resident entry to a non-resident firm has been deferred.
According to the application, Vodafone agreed to buy out local partner Essar Group’s 33% stake in Vodafone Essar for about $5.46 billion. The Essar Group had held a 22% stake through Mauritius-based Essar Telecom India Ltd. and a further 11% through Indian-registered Essar Telecommunications Holdings Pvt. Ltd.
Vodafone launches Wi-Fi device in India
Vodafone Essar has launched its mobile Wi-Fi device, Vodafone R201 in India at the price of US$121.62
Vodafone R201 is a portable mobile Wi-Fi terminal which can be used by five users simultaneously to connect to Vodafone’s 3G network. It is designed to provide customers with an advantage of connecting and communicating on-the-go.
According to Vodafone Essar Chief Marketing Officer, Kumar Ramanathan, as a result of their innovation effort,Vodafone is introducing an exciting range of products to let their customers experience 3G services at its best.
According to the company, R201 uses a SIM slot to connect to Vodafone’s 3G network and five users can then connect their computers, mobile gaming devices or digital music players to the device over Wi-Fi network to enjoy 3G speeds. The device comes with a battery life of up to 4 hours and can offer 3G internet services on the go at a download speed of up to 7.2 megabyte per second on HSDPA (high-speed downlink packet access) enabled devices.
Essar Kenya appoints Madhur Taneja as new CEO
Essar Kenya has appointed Madhur Taneja to replace Atul Chaturvedi as the company’s new CEO.
Taneja has been the CEO of Warid Telecom in Uganda. Chaturvedi, who has been at the helm of Kenya’s third mobile operator for less than a year, moves out to take up what he says are other assignments.
Chaturvedi confirmed his exit and stated that he is in the country until the end of March to take some important projects to conclusion. Essar group has a 51% stake in Warid Telecom, with operations in Uganda and Congo.
Vodafone to enter landline business in India
Vodafone Essar is planning to enter the leased landline and business solutions space, competing with larger peers Bharti Airtel, Reliance Communications and Tata Communications.
According to Naveen Chopra, Director Enterprise and Carrier Business, they are a late entrant in the business, but that puts them in an advantageous position of nothing to lose. Vodafone’s entry may intensify price wars in the enterprise business, just like new entrants in the mobile telephony space did since late 2008.
With retail customer tariffs coming down to one paisa per second, enterprise business present high margin data revenue for telecom operators. Unlike mobile telephone call rates that have halved over the last two years, telephony solutions for enterprises have been falling 10-15 % every year.
According to Chopra, they cannot pretend that there will be no pricing impact, but the volume growth in the enterprise business more than adequately compensates the fall. Over a span of five years,Vodafone Essar expects trebling of revenue from the segment, which currently accounts for 8-10 % of the company’s revenue at the moment.
According to the company, by the financial year that will end in March of 2016, enterprise business would account for nearly 20% of the company’s revenue. In the October-December quarter, revenue of Vodafone Essar was approximately 7,126 crore. It does not disclose the profitability of the region. It will also give preference to enterprise customers on its 3G services to be launched before March-end.
The company bought 3G airwaves in nine service areas for 11,618 crore in a government auction last year. The service is expected to bring more profit-making data business to telecom operators.
Vodafone adds nearly 1.9 lakh users from MNP (India)
Vodafone Essar has emerged as the biggest gainer, adding almost 1.9 lakh new subscribers, whereas state-owned BSNL lost more customers than it attracted from other service providers.
Since the launch of MNP services, nearly 20 lakh mobile subscribers have switched service providers using the facility.
MNP allows users to change service providers while retaining their phone numbers.
According to official figures provided in the Rajya Sabha by the Department of Telecom, a total of 19,79,600 numbers of subscribers have ported their numbers so far using the MNP facility.
According to latest available figures, Vodafone Essar gained as many as 1.9 lakh customers, followed by Idea Cellular, with a net gain of 1.5 lakh subscribers.
Essar failed to disclose information: Vodafone (India)
Vodafone Group Plc has stated that its partner (Essar) failed to provide material information to the market on a proposed merger of the Asian company’s stake.
According to the company’s statement, Vodafone, the world’s biggest mobile-phone operator, raised its objections with the Madras High Court, Bombay Stock Exchange and the regulator, the Securities and Exchange Board of India.
Essar has an option under the venture agreement to sell its entire stake in Vodafone Essar Ltd. for $5 billion to Vodafone or a smaller amount at an independently appraised market value.
Vodafone in July agreed to pay an extra $750 million should Essar sell some of its shares to account for the cost of 3G licenses. The window to sell the stake closes in May.
As per Vodafone’s earlier reports, it was opposed to a plan by Essar, which holds a 33% stake, to combine 11% of the venture with publicly traded India Securities Ltd. The price of India Securities including the stake could be misinterpreted to indicate a fair market value of Vodafone Essar.
Vodafone today stated that Essar appears to admit in its statement that the only purpose of the ISL merger is the discovery of the fair market value of Vodafone Essar. The consent of the ISL shareholders appears to have been obtained without this material disclosure.
Vodafone, Essar fight over JV takeover (India)
Vodafone and Indian partner Essar Group are at fighting over the latter’s plan to exit the Vodafone Essar joint venture.
The controversy stems over Essar’s plan to merge two business units including Essar Telecom Holding, which has an 11% stake in the JV.
Vodafone has objected to the merger, stating it could artificially inflate the valuation of the venture and thus affect the price it pays for a buyout the operator is reportedly planning.
The company claims that Essar did not disclose the merger to shareholders, and that details of the plan had been kept from Indian corporate regulators.
But as per Essar previous statements, the merger is fully compliant with Indian financial regulations and laws, and that Vodafone has no legal capacity to protest.
Essar claims the true purpose of the objection is to prevent Essar from discerning the fair market value of the venture, and that Vodafone is attempting to force Essar out of the company and own 100% of it at an artificially depressed value.
Under the terms of the companies’ agreement, Essar can either sell its entire stake to Vodafone for $5 billion, or part of its holding at market value.
Vodafone is thought to have enlisted Vodafone Essar minority shareholder Analjit Singh to join in a takeover bid, in order to comply with Indian laws preventing foreign ownership of more than 74% of a mobile operator.
Vodafone objects to Essar’s reverse listing (India, UK)
Vodafone has complained to market regulator SEBI and the Bombay Stock Exchange (BSE) about its partner Essar’s plans to transfer 11% stake to another listed group firm stating that it was not disclosed by the Indian partner.
According to Vodafone, it has written to both BSE and SEBI to express its concerns regarding reverse listing of Essar Telecommunications Holdings Pvt Ltd into India Securities Ltd and has asked for the matter to be examined.
Vodafone had acquired nearly 67% stake in 2007 while Essar have little over 33% equity in the joint venture.
India Securities Ltd (ISL) is a group firm of Essar and is listed on the bourses. Transfer of 11 per cent stake held by Essar Telecommunications Holdings to ISL would allow shareholders of ISL to participate in Vodafone-Essar.
Essar is doing so to get to know the fair (market) value of its 33.02% stake, for which the company has the right to exercise the put option, a contract that gives the seller the right to sell a specified quantity of securities at an agreed price within a specified time period.
According to Vodafone, there has been no disclosure to the shareholders of ISL on Vodafone Essar, which would become a substantial asset of ISL. Therefore, the investors in ISL have no basis on which to form a valuation judgment.
Mobile companies inks deal on number portability (Kenya)
Mobile phone users from April will be able to switch operators without losing their preferred numbers in a move that sets the stage for a fresh battle for control of Kenya’s competitive telephony market.
The country’s four mobile firms—Safaricom, Airtel , Essar’s Yu , and Orange have signed agreements on Friday allowing for the launch of the mobile number portability (MNP), as the switch is technically known.
The Communications Commission of Kenya (CCK) considers that the move will enhance competition in the mobile telephony market, adding that it could lead to a further drop in prices as players race to defend and grow market shares.
According to Charles Njoroge, the Director General of CCK, it is also expected to change the level of playing ground for the operators in the market. Changing subscribers’ numbers can be a major inconvenience at both personal and business level because telephone numbers are considered part of our identity, and any change would affect the circles of our friends, family and business associates.
This has been the major barrier for Safaricom subscribers to join rivals networks despite the operators offering lower rates, a signal that MNP is expected to change the competition landscape once again.
Under the MNP, subscribers will keep your number exactly the way it is, even if they move from one network to another, but they will have to inform their current and new operator of the switch. The subscriber will be required to surrender the SIM card to his or her provider and acquire another SIM card from the new service provider.
According to Atul Chaturvedi, the Managing Director, Yu, the service gives the consumer more freedom and ability to be more service oriented. Quality of service is going to play a critical role in attracting and retaining subscribers and with this service we have an opportunity to net disgruntled subscribers with our offers.
