Alcatel-Lucent to link Seychelles with global fibre networks
Alcatel-Lucent has inked a deal worth more than US$30 million with Seychelles Cable System (SCS) to build the Seychelles East Africa System (SEAS) connecting Victoria in the Seychelles to Dar es Salaam, Tanzania.
The new submarine cable will provide Seychelles with high-speed direct access to an international fibre-optic backbone for the first time. The SEAS will span over 1,900km offering international connectivity in support of affordable internet access and new broadband applications for commerce and government services.
According to Benjamin Choppy, Principal Secretary, Department of ICT, this new connection will provide faster internet and improved access to telecommunications, providing a cost-effective reliable solution that will give the country an alternative to satellite connections, on which they completely dependent on now.
Cable & Wireless Seychelles, Airtel Seychelles will partner with Alcatel-Lucent in SEAS.
According to the CEO’s of both the telecom operators, Charles, the scalability of Alcatel-Lucent’s submarine solution and its extensive end-to-end expertise will help the company to meet the growing bandwidth needs as well as improve the quality of service that they offer to their customers on both fixed and mobile networks.
Vodafone to launch M-PESA in India
Vodafone and HDFC Bank have teamed up to offer mobile banking service to the rural masses. The pilot for these services has been started in ten villages in the Sikar district of Rajasthan.
As per Mr. Rahul N Bhagat, country head of retail liabilities, marketing and direct banking channels, HDFC, the company has launched a pilot mobile money transfer service called M-PESA in ten villages of Rajasthan. The service will allow subscribers to make payments, money transfers, deposits and withdrawals. As of now, HDFC has appointed 54 business correspondents (BCs) in these villages, leveraging manpower on Vodafone’s retail network.
BCs are retail agents of banks and provide services in remote areas, where setting up a branch is not cost-effective. These retailers are authorized to collect small-value deposits, give small loans and offer products such as micro-insurance and mutual funds to the elderly, poor, disabled, and those with poor access to a bank.
M-PESA is already a successful service in Kenya, and is now also available in Tanzania, Afghanistan and South Africa. It is a branch-less banking service designed to enable users to do basic banking transactions without the need for a bank branch. The service is being run by IBM Global Services on behalf of Vodafone in all these countries.
Through the M-PESA, customers can deposit and withdraw money from a network of BCs, including retail outlets, kirana stores etc which act as banking agents.
According to Bhagat, BC route is all about faith and goodwill that people have on BC’s therefore company’s entire reputation is at risk, as this network is difficult to administer. If anything goes wrong, the bank will be held liable.
As per the new RBI guidelines, it has allowed profit companies to become BCs for banks. Bhagat believes that this is a positive move and will help increase the reach of banks into the remotest areas of the country.
RBI has allowed companies that have a large retail presence, excluding non-banking financial companies, to act as BCs. Till now, only non-profit companies and individuals could work as BCs.
Vodafone, Bharti trying to extract profits from African Deal
For the established telecom operators in Africa, making money from each user in the world’s fastest-growing market is turning into the biggest challenge.
A number of operators’ are trying to reduce their call rates to attract a large number of mobile users. In Tanzania, which has seven phone companies, prices have fallen 90% over the past 18 months. Companies also face among the world’s highest churn rates, with users frequently changing operators, and patchy infrastructure, all of which make returns on investment difficult.
Phone operators assembled at Africa’s telecommunications conference that began yesterday in Cape Town want to sell services to the 50% of the market that doesn’t have mobile phones. They also want to service current customers more cheaply, without losing user loyalty, while stemming declines in average revenue per user, or ARPU, by offering newer services such as mobile Internet, banking and other money transactions.
According to Andile Ngacaba, chairman of Dimension Data and Convergence Partners, the company is now dealing with an ecosystem that’s changing very, very fast. On the one side, the company sees this subscriber growth and growth in data and data applications. On the other side, they see this decrease in ARPUs. This requires new models of investment such as infrastructure sharing.
African mobile users surpass 500 million in Q3
As per the reports by Informa Telecoms & Media Mobile, subscriptions in Africa surpassed half a billion during the third quarter of 2010 a figure expected to rise to 842 million in the next five years.
According to the research firm, the number of active mobile subscriptions reached 506 million by the end of September, up 18% on last year, meaning the continent now accounts for 10% of the global total.
According to Thecla Mbongue, senior analyst at Informa Telecoms & Media, although the rate of growth in mobile subscriptions in Africa will slow as markets mature, the continent continues to offer great opportunities for investors.
It is said that Nigeria is Africa’s largest mobile market, through 16% of mobile subscriptions, with Egypt and South Africa making the top three. Additionally, Nigeria and Egypt, together with Morocco, Tanzania and Zimbabwe together accounted for 48% of the 54 million net subscriber additions during the first nine months of the year, highlighting that even Africa’s more established mobile markets are still showing strong growth.
As per Mbongue, demand for voice services will remain vigorous in under-penetrated markets, while non-voice services such as mobile broadband and mobile money services will continue to gain traction. Connectivity into and out of Africa has improved dramatically over the last 18 months with the landing of a number of submarine cable systems on both the east and west coasts of the continent; this has expanded the opportunity for providing data services. By 2015 there will be 265 million mobile broadband subscriptions in Africa, a huge increase from the current figure of about 12 million. Mobile money users are seen reaching almost 360 million by 2014. By contrast, household penetration of fixed broadband stood at just 2.5% in the first quarter of this year.
Though, Mbongue warned that terrestrial backhaul networks need to be extended for rural and remote communities in Africa’s interior to benefit from international connectivity.
As per Informa Telecoms & Media, African broadband has a long way to go if it is to emulate the mobile revolution that has already swept through much of the continent.
Vodacom eyes at Africa
Vodacom Group Ltd. is planning to expand its footprint in Africa. According to Chief Executive Officer, Pieter Uys, growth opportunities in Africa, outside the mobile-phone company’s South African home market, have whetted his appetite for acquisitions.
According to Uys, the first quarterly growth in Vodacom’s international operations after five consecutive quarters of negative growth and the appointment of Johan Dennelind from Dec. 1 as manager for the operations will give Uys more time to consider strategies for expansion. He is deliberately in the last 12 months did not focus on expansion. If the opportunity came the company would have looked at it, and they did look at Zain, but the company did not send out a whole troop of people around the continent, he focused on turning around existing business outside South Africa.
Vodacom, majority owned by Vodafone Group Plc, would be seeking to expand as intensifying competition from multiple providers of mobile-phone services pulls down prices. That’s forcing companies to develop in new markets and find more growth engines.
As per the CEO, the competitive environment has changed dramatically. Vodacom’s unit in Tanzania took 12 months to reorganize to compete with Bharti Airtel Ltd. and Millicom International Cellular SA, which operate under the brand names Zain and Tigo respectively. Tariffs have been cut by as much as 90% in the past 15 to 18 months.
Tariffs were US$0.06 a second about 15 months ago, it is now a dollar or below a dollar a second. Tanzania is the largest of Vodacom’s operations outside of its home market of South Africa.
Zantel increases Coverage with National Roaming Deal (Tanzania)
Zantel, a Tanzania based mobile network has announced a national roaming deal with Zain Tanzania that will expand its network by 236 base stations, a move that has connected its services to approximately every village in the country.
According to Zantel acting Chief Commercial Officer Nitish Malik, this extension has been made possible through an agreement Zantel has signed with Zain Tanzania to roam on its network. The new sites are in areas that Zain has exclusive network coverage. The network expansion was an ongoing exercise aimed at bringing services closer to the customers. The company has invested over US$140 million in the past two years to expand the network coverage in mainland Tanzania to ensure that the company is extending the presence and continue to grow business in untapped areas.
UAE based Etisalat is the majority shareholder in Zantel with 51% stake.
‘Airtel – Zain’ lost 6 million subscribers in Africa since Bharti’s acquisition
Zain has lost 6 million of its subscriber’s base from the day it tied knot with Bharti Airtel. Although according to Airtel’s spokesperson, the reporting in Kenya was different from that of other markets where a user is not accounted for if a person did not receive a single call for a month. However, most telcos label a user inactive only if the user has been inactive for anywhere between 3 to 6 months.
After announcing first-quarter results previously this month, Bharti Airtel disclosed Bharti Zain’s subscriber base at 36.3 million as touching over 42 million, the figure peddled at the time of the acquisition.
According to the spokesperson for Bharti Airtel, as good governance and to align the definition of customer reporting of Africa to India, the company reported 36.36 million customers. This represents revenue earning customers only. However, he did not specify if the company was seeing a churn in its African operations.
As part of the $10.7-billion deal, Bharti had agreed to acquire the operations of Zain in Burkina Faso, Chad, Congo Brazzaville, the Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia. The company is scheduled to unveil the Airtel brand in these countries by October.
Though the acquisition of Zain may have been responsible for the decline in profits, if Bharti doesn’t ensure customer satisfaction in the African nation, revenues and profits will continue to slide.
Bharti Airtel to invest $10 million in Seychelles
Bharti Airtel has planned to invest US$10 million in its newly acquired telecom network Seychelles. The company will also be participating in the Seychelles East Africa submarine cable (SEAS) project.
SEAS is a 2,000 km submarine cable between Seychelles and the Tanzanian city of Dar es Salaam project, which will connect Seychelles to the world and the global economy.
The company is investing US$ 34 million in the project, and is expected to improve the services offered to large enterprises and will further augment Telecom Seychelles world-class mobile services, which currently include new generation 3G mobile technology and integrated wireline services.
According to CEO, Manoj Kohli, the company will leverage the expertise and infrastructure to offer customized data solutions for the large enterprise and corporate clients, which will help them, gain a unique competitive advantage.
Millicom plans new strategies to counter Bharti’s Africa entry
www.WirelessFederation.com/news: India’s Bharti Airtel Ltd.’s Africa entry with services such as money transfers, banking and insurance has been planned to be countered by Millicom International Cellular SA, a company with mobile-phone customers in countries from Guatemala to Tanzania by accelerating its growth process and bringing new innovations for the people.
Millicom operates under the brand name is Tigo and was established 20 years ago by Sweden’s Kinnevik Investment AB as a holding company for cellular assets.
Like Bharti, France Telecom SA, Vodafone Group Plc and America Movil SAB de CV, Millicon is also pushing third- generation services for wireless Internet besides broadening its portfolio that includes SMS-based information services and microloans for topping up prepaid balances. Millicom was also interested in some of Zain’s Africa assets that Bharti agreed to acquire for $10.7 billion in March. In the process to speed up growth, the operator is also planning to bid in Costa Rica.
Meanwhile, other Greenfield operations or mergers would also be considered if the company is capable of becoming first or second in their markets and producing at least $100 million in annual revenue.
According to Chief Executive Officer Mikael Grahne, sooner or later markets come to a certain level of maturity and to get growth from then on you need new products and services, so Millicom is very heavily focused on anticipating that and the company will pursue customers who can pay more for extras and better network quality, rather than competing strictly on price of basic services.
Analysts feel that Bharti’s entry into Africa is likely to spark a wave of consolidation as less profitable players exit the market and bigger one resort to extensive investment. Earlier, an investment of as much as 7 billion euros ($8.8 billion) in deals focused on Africa and the Middle East in the next five years has been announced by France Telecom CEO Stephane Richard while Vodafone CEO Vittorio Colao announced this month that sub-Saharan Africa is among the three priority areas†for the world’s largest mobile-phone company.
Indian telco Bharti Airtel’s latest ventures improves its world ranking
www.WirelessFederation.com/news: In the latest global rankings, Bharti Airtel which was ranked eighth in last year’s ranking will overtake Norway’s Telenor Group, Deutsche Telekom and China Unicom to become the world’s fifth largest mobile operator group with just under 170 million global connections. The rankings are based on fourth-quarter 2009 connections data and are calculated on a performance basis to demonstrate the impact of the enlarged Airtel Group.
The latest acquisition and deals made by Bharti Airtel across the world has played a major role in improving the ranking of the company in the world rankings. Incidentally, Indian telecommunications company Bharti Airtel and the Bahrain-based Zain group has signed definitive agreements for Bharti to buy most of Zain’s operations in Africa at an enterprise value of $10.7 billion.
Not only Zain’s acquisition, but its home market in India, launch of Airtel in Sri Lanka in 2009 and acquisition of Warid Telecom in Bangladesh in January 2010 has brought it total to 18 markets, a global footprint surpassed only by the large European operator groups and its new African rival, MTN.
Bharti is also in talks with Tanzania’s government over its stake in Zain Tanzania. If materialized, the talk will make Bharti the second-largest African operator group behind MTN, which remains ranked at number twelve by global connections. According to Finance and Economy Minister Mustafa Mkulo, Tanzania’s government has a 40 percent stake in Zain Tanzania, and the government is keen to know the future†of the unit when Bharti becomes the new majority shareholder.
However, everything is not green for Bharti as it has to face numerous hurdles before starting its operations in Africa in a full vigor. The Republic of Congo recently announced that it retains the right to block the transfer of Zain’s license to Bharti with the government of the country claiming that it was not consulted and this was a violation of the country’s laws.
But Zain trust in the company does not seem to be taking a back seat as it has expressed its desire to sell all but two of its African mobile assets to Airtel excluding wholly-owned Zain Sudan (a market leader in the country) and its 15.5 percent equity stake in Wana (ONA) in Morocco.
All this must seem to be working wonders for the Indian telco but will lessen the impact of Zain which will be reduced to just six markets and sees the Kuwaiti-based firm drop to number 46 in rankings on a pro forma basis.
