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Debt Relief Sought For PTO's
A call went out recently that debt relief measures for Telecom Operators in Nigeria might be required to avoid significant dislocation in the telecom industry. Engr. Ogbonna Iromantu, pioneer Executive Vice-Chairman of NCC made the call at a NICOMM 2005 talk session Monday. He also expressed concern about the worsening multi-regulation regime in which state governments have been passing bills which practically seek to regulate aspects of telecommunications operations.
Uniform Interconnect rates for operators?
As part of fallouts from the ongoing reforms being canvassed and implemented by the Nigerian Communications Commission (NCC), indications are that a uniform interconnect rate will be implemented for all voice traffic on telecommunications networks in the country.
Interconnect rates have been a point of disagreements in the industry over the last few years, especially as the Private Telephone Operators have continued to complain that the present skewed arrangement was unduly in favour of the GSM operators.
InterSwitch makes bold move for cashless transactions
Foremost switching and e-payment company, InterSwitch, in a bold move to encourage more cashless transactions, is currently offwering merchants free online POS terminals. This promo is part of the company's push to encourage more Nigerians take up and use their debit cards.
InterSwitch debit cards are tied to holders' bank accounts, allowing them to make payments in realtime without the need to withdraw physical cash. The cards can also be used to withdraw cash round the clock at any of the ATMs on the network.
Data Driving Subscribers' Choice of Telephone Service Providers
In version two of its data survey which was recently conducted over the space of two months, DomainStandard Networks reports that 71% of respondents considered data on their phone lines as very important. 65% of respondents were willing to switch over to another network in order to enjoy more comfortable data tariffs, 30% were not sure, and only 5% were certain of not migrating.
The survey, whose results which were released on Friday and the second in line by DomainStandard, had respondents from major cities across the country, covered both GSM-based (GPRS) and Private telephone (CDMA/TDMA) operations, and examined subscribers' attitude to data services and tariffs on telephone networks. The survey results also suggest that the NCC's push for a unified licensing regime, where operators may offer a wide range of services under a single license, is a step in the right direction.
Speaking on the results of the survey, CEO of DomainStandard Networks Mr. Yomi Adegboye said that it was clear that "there is a growing awareness and enlightenment in Nigeria that's seeing people ask for more than just the ability to communicate by voice". Mr. Adegboye has been at the fore-front of those canvassing for the adoption of mobile data in bridging the digital divide in the country.
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Telco’s Scramble for Africa
First Nigeria, then the world
In the late summer of 1898, 150 French soldiers squared off against a flotilla of British gunships near a dusty village on the White Nile in southern Sudan. After centuries of quiet existence as a caravan station, the town of Fashoda found itself at a dangerous intersection of imperial aspiration. For a few months, headlines in Paris and London heralded the prospect of war between the great powers. It was the Cuban Missile Crisis of the day. In the end, however, the French backed down. The Scramble for Africa—a 35-year land grab for virgin fields of gold, diamonds, and rubber—had reached its climax.
Today, a new Scramble for Africa has begun. The aims are not imperial or colonial, but nakedly capitalist. At the beginning of the 21st century, the scramble is for Africa’s burgeoning, untapped telecom market. War is not on the table. But the thirst for profits, and the will to stake out unclaimed turf, is as potent as it was when European powers vied for African territory in the late 19th century. This time, the geography in the crosshairs of ambition is considerably larger than a ragged town on the banks of the Nile. It’s Nigeria, the continent’s most populous nation with 129 million people. “Nigeria is the second-largest market in Africa,” says John Everington, a Middle East and Africa telecom analyst with Informa Media in London. “If you can get a foothold in Nigeria, you are fairly set for big growth.”
At the moment, Nigeria’s mobile market is second to South Africa’s, which has just 44 million people but a per capita GDP more than 10 times larger. Nigeria is reckoned to become Africa’s biggest mobile market by 2010 with a penetration of 41 percent. Pyramid Research says that Nigeria is home to one in every 10 African mobile subscribers. By 2010, that ratio will grow to one in four. Nigeria—an oil-rich West African nation only just emerging from a long era of political turmoil and staggering corruption in all levels of government—in some ways reflects the political and social changes taking place across sub-Saharan Africa. These tectonic shifts are also making the world’s poorest and most beleaguered continent one of the most coveted prizes in a global race to lock up mobile subscribers.
After years of being regarded solely as a basket case plagued by civil war and the world’s highest HIV rates, Africa is suddenly also a roiling telecom market. As it grows harder for telecoms to eke out new subscribers and profits in places where markets are reaching saturation points, Africa’s vast pool of potential customers is tantalizing. And while some countries remain mired in lawless chaos, like Somalia and the former Zaire, the list of so-called African success stories grows a little longer every year. Because of countries like Ghana and Botswana, sub-Saharan Africa has experienced an average GDP growth of around 3.5 percent over the past few years.
The telecom boom in sub-Saharan Africa was validated in cold, hard cash in March when Kuwaiti telecom MTC paid $3.4 billion for Celtel, a Dutch company with 5 million subscribers in 13 sub-Saharan nations. That works out to around $680 per subscriber. Why the hefty price tag? Perhaps because even in a country like China, average revenue per user (ARPU) is $10, while ARPU across sub-Saharan Africa totals $25. In Nigeria ARPU is $55. That’s how you make money on the world’s poorest continent. While Celtel doesn’t have operations in Nigeria yet, the company has its eye on the country, and is on a shortlist to take over Nitel, the state-run telecom.
But even as bold telecoms wade into Africa, others are pulling out. Orascom, an Egyptian telecom, has been withdrawing from sub-Saharan Africa to focus on its operations in North Africa and the Middle East. In 2003, the company sold off seven of its sub-Saharan GSM assets. In 2004, it sold off its majority stake in Ivory Coast’s Telecel Loteny. Orascom also got out of the Republic of Congo. No one should think it is simple to do business in Africa, says Mr. Everington. In many places, basic infrastructure such as roads, electricity, and water simply doesn’t exist. When a mobile operator sets up a tower, it sometimes also has to build the road to the tower, provide a generator, and then hire guards to make sure that the installation is not dismantled piece by piece.
Why Now?
Still, the profits are alluring enough to make some companies look past the hassles of doing business in Africa. Nigeria had 9.1 million mobile subscribers at the end of December 2004, according to the Nigerian Communications Commission. That represents growth of 180 percent over the prior year. The International Telecommunications Union, the United Nations agency that regulates telecom worldwide, claims that mobile subscriptions in Africa grew by more than 1,000 percent between 1998 and 2003. The ITU now estimates that the continent has 67 million mobile cellular subscribers. Still, in sub-Saharan Africa, only four out of every 100 people have a mobile phone. That’s a lot of room to grow, and a lot of business to compete for.
Indeed, the competition in Nigeria is fast and furious. In 2001, the state auctioned four GSM licenses for $285 million each. The winning bids came from South Africa’s MTN, Nigeria’s state-run Mtel, and two homegrown companies, Glomobile and V-Mobile. The four telecom companies are angling to expand GSM beachheads in Nigeria’s still largely untouched market, while others are clamoring to get in. MTN, the largest mobile carrier in Africa, dominates Nigeria with 42 percent of all subscribers in 2004. That number, however, represents a 10 percent drop from the prior year as Glomobile and Mtel have been gaining ground on MTN. The money at stake remains huge. MTN earned a profit of $1.1 billion from its Nigerian operations in 2003.
With profits like that, it’s not surprising that the GSM licenses fetched the sums they did back in 2001. The fact that the global telecom industry generally deemed the auction kosher was no small matter. It’s not exactly the sort of information a national trade ministry would highlight on its brochures, but over the last two years Nigeria has gone from being the world’s most corrupt nation to the sixth-most, according to Transparency International, a non-governmental organization in London that monitors corruption worldwide. While sixth-most corrupt nation on Earth is hardly high praise, it does reflect a growing openness in Nigeria that mirrors anecdotal observations from outsiders seeking to do business in the country.
In a fast-moving market like Nigeria’s, transparency is critical. For example, Nitel, the country’s national telecom, is up for sale. In the running to buy the carrier is MTC Celtel, a Kuwaiti-owned mobile company that already has operations in 13 African countries, including Uganda, Kenya, and the Democratic Republic of Congo. “If Celtel gets into Nigeria, things will heat up,” says Tope Folayan, director of business development for Pan-African Telecom, a Sacramento, California-based company aiming to become the Nextel of Africa.
First Nigeria, Then the World
Pan African Telecom’s strategy is similar to many other companies eying the African telecom market: first Nigeria, then the rest of the continent. While Nigeria is the biggest market, it is not the only one in Africa worth fighting for. Consider Botswana. The country of 1.8 million people has one of the fastest-growing economies in the world and boasts a mobile penetration rate of 34 percent. While Kenya has mobile penetration rates of 14 percent, 10 of the remaining 12 MTC Celtel countries had penetration of less than 5 percent at the beginning of 2005. Those countries include Uganda, Sudan, and the Democratic Republic of Congo. “Celtel is doing a pretty good job in small markets no one talks about, yet have significant margins,” says Bigue Sagna, an Africa and Middle East analyst for Pyramid Research. At the end of the second quarter in 2005 MTC Celtel had 6.5 million subscribers in Africa.
How are new subscribers being lured on a continent where many people subsist on one dollar a day? Competition is driving down costs. In Nigeria, the ratio of prepaid plans to billed is 97 to 3. More than 500,000 retail outlets peddle mobile products and services. Across the continent, as it is in other parts of the world, SMS text messaging is emerging as a kind of currency transfer tool. Mobile users can send credits to friends and family, which can be resold for cash. This is highly useful in areas where banks and other financial institutions are hard to come by. Cheaper phones are putting sets into the hands of more people.
As the trend drives forward, look for more countries to open their state-run telecoms to private enterprises. In Ethiopia, coffee farmers in the south are agitating for Addis Ababa to open up its network to make their business more efficient. Meanwhile, other countries like Uganda and Botswana are lifting restrictions on VoIP, which will make calls out of Africa even cheaper.
Even in present day Fashoda, which the British renamed Kodok to banish any memories of the standoff, telecom money is pouring into the region the way foreign armies once marched into the desert. It is estimated that Sudan, a country riven by a ferocious civil war, received $100 million in telecom investment in 2004.
The above essay is culled from RED HERRING. Published Nov 21, 2005
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DomainStandard Networks in collaboration with The Executive CyberSchuul
invites the general public to a workshop titled:
DOING BUSINESS THE SMART WAY
Introduction: In today's world, the workplace is becoming increasingly mobile. Location is becoming less a strong factor in setting up a successful business. Rather, having access to people, data and applications regardless of location and time can give your business or organization a competitive edge. Every organisation serious about staying relevant in today's world needs to at least implement a basic mobile strategy. Mobility is vital in today's workplace.
What is enterprise mobility? A particular definition of enterprise mobility that paints the picture quite clearly is that which defines it as the freedom to carry on business outside of traditional brick and mortar office environment. The explosion in use of mobile phones and smartphones in our country, as well as the continual roll-out of underlying network services, proves that more than ever, workers want to stay connected while on the go.
Workshop highlights:
we will explain the concept and benefits of mobility
we will help you configure your compatible mobile phone for WAP, email and other internet/data services
we will teach you how to use GPRS for WAP, email, web and messaging on your phone
we will present you facts and figures about what each GSM network offers and their tariffs
we will present information on how to go about implementing a mobile strategy for your business
we will teach you how to use your phone as a modem with your PC for internet access and fax
The workshop will not be talk like you are used to but will include plain and easy to understand demonstrations to help drive the message home. Time will also be given for individual consulting. Its pure value all the way.
Target participants: Business executives, Entrepreneurs, Field workers, Marketing staff, Customer support personnel.
Date: Sunday 27th November 2005
Time: 1.00-5.00pm
Venue: Conference Centre, UNILAG Guest House,
University of Lagos, Akoka, Yaba
Chief Resource person: Yomi Adegboye, Mobile Enterprise Consultant and CEO, DomainStandard Networks
Fee: N5,000 per participant.
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If you cannot make the workshop for the 27th, you may book an appointment for a private session at our office on Allen Avenue.
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Received on Wed, 23 Nov 2005 00:09:17 -0500
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