Latest Updates from Reuters
Category

Safaricom bags lion’s share of Kenyan mobile revenues

Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Safaricom dominates the Kenyan mobile market, sweeping up more than 90 percent of revenues in areas such as voice calls and text messaging, according to regulator data that could further fuel a debate about competition in the industry.

Rivals like Bharti Airtel and some officials have complained that Safaricom’s dominance stifles competition. France’s Orange is seeking to sell its Kenya operation, becoming the second international operator to quit the country after India’s Essar Telecoms sold its Yu business last year.

The data obtained by Reuters comes as the East African nation is amending the telecom sector’s competition law to give the regulator more powers to penalise companies deemed to be abusing dominant positions in the industry, though what would constitute such abuse is as yet unclear.

Safaricom, in which Britain’s Vodafone has a 40-percent stake, has dismissed accusations it hampers competition, saying it does not abuse its dominance.

Safaricom’s revenues from calls amounted to a 91.63 percent market share in 2014, while its closest competitor, Airtel, had 8.33 percent, according to the data obtained from the Communications Authority of Kenya (CAK).

In text or short messaging services, Safaricom had more than a 90-percent share of total market revenues from that segment, the regulator said.

In mobile data, or internet services, Safaricom’s revenues were 85.50 percent of the market share in 2014, while Airtel had 14.43 percent, Orange had 0.01 percent and Equitel, operated by Equity Bank’s subsidiary Finserve, 0.06 percent.

The figures for Orange are for 2013 as it had not submitted audited accounts for 2014 to the regulator, CAK said.

The regulator usually issues quarterly figures for number of subscribers, which give Safaricom a 67 percent share of Kenya’s 35 million users in June. It also gives traffic volumes for areas such as calls.

Asked about the regulator’s revenue breakdown, Safaricom Chief Executive Bob Collymore told Reuters: “We don’t recognise that data.” He said subscriber numbers and network traffic were a better gauge of how the firm was performing.

 

M-PESA

The data did not detail revenue from phone financial services, where Safaricom’s M-Pesa service is the most popular offering, allowing users to pay bills or send money even using the most simple mobile phone device.

Analysts say this service draws customers to use Safaricom’s wider telecoms services over its rivals.

Eric Musau, analyst at Standard Investment Bank, said the dominance of a single operator was hurting competition by driving out rivals like Essar and Orange.

He said, however, that some smaller operators were failing due to inadequate capital, frequent shareholding changes and a lack of a sound strategy for the local market. “I would say one player had a better strategy than the rest,” he added.

CAK said in August that it was amending the telecom sector’s competition law, but said it was not targeting Safaricom or any other company. It did not aim to penalise any company just for being dominant, but only if there was abuse of its position in the market.

The regulator’s head, Francis Wangusi, said at the time the new regulations would break down the telecoms sectors into segments including mobile and fixed voice, data, text messaging and mobile money transfer services.

“It is too early for us to come up to say ‘Safaricom you are dominant’, because Safaricom can be dominant in certain markets, but not dominant in others,” he said. “In all these markets, we would not apply the same rules,” he added.

Safaricom has opposed the proposed changes saying they could deter investments by targeting large firms.

Airtel Kenya CEO Adil El Youseffi said the current market situation was limiting innovation and consumer choice and driving operators out of the country. “The sector is unable to attract new or incremental investments from other international players,” he told Reuters.

Orange Kenya gave no specific comment on the figures.

(By Duncan Miriri, Reuters)

Read more

South Africa boosts power output after maintenance

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa added 1,286 megawatts (MW) to its national grid on Thursday when two generating units were brought back online following an extensive “overhaul”, power utility Eskom said.

Eskom said electricity supplies would continue to be tight as it carried out other plant maintenance.

South Africa, the continent’s most developed economy, suffered almost daily power outages earlier this year as ageing power plants struggled to meet demand. South Africa’s national generating capacity is around 42,000 MW.

Read more

Russia’s Rosatom says Egypt nuclear talks in final stages

Comments (0) Latest Updates from Reuters, Middle East, Politics

ABU DHABI (Reuters) – Russia’s state-owned nuclear firm Rosatom is in the final stages of talks for a contract to build a nuclear power plant in Egypt, a senior official of the company said on Wednesday.

Anton Moskvin, Rosatom Overseas vice president, said that the deal was expected to be signed by the end of the year.

Speaking on a visit to the United Arab Emirates, Moskvin said construction of the the first reactor of the plant at Dabaa in Egypt’s north would finish by 2022 if a contract was signed by the end of 2015. The contract would involve a loan from Russia to Egypt, he said.

“The sooner we finish the better,” Moskvin said.

“We can start site assessment work next year and then see how soon we can start real site work,” he said.

Egypt has been considering building a plant in Dabaa, situated in the Matrouh governorate, on and off since 1981.

Cairo froze its nuclear programme after the 1986 nuclear disaster at Chernobyl, but announced in 2006 it planned to revive it. Plans for a tender were being prepared when President Hosni Mubarak was deposed in February 2011.

In February this year, President Abdel Fattah al-Sisi said he had signed a memorandum of understanding with Russia for the project.

The Dabaa plant will have four reactors when complete by 2025. Rosatom is currently the only firm in negotations with Egypt over the project.

“There are some 200 people from both sides meeting every month and sometimes twice a month to discuss commercial, technical and other issues,” Moskvin said.

Rosatom is also in talks with Saudi Arabia’s nuclear government body, the King Abdullah City for Atomic and Renewable Energy, over the kingdom’s nuclear plans.

“We are in constant contact with the King Abdullah City, the latest meetings took place in September,” Moskvin said. “Our primary interest there is in a building contract.”

Saudi Arabia and Russia signed an agreement to cooperate on nuclear energy development in June. [ID:nL5N0Z5163]

In 2012, Saudi Arabia said it aimed to build 17 gigawatts (GW) of nuclear power by 2032 as well as around 41 GW of solar capacity. The oil exporter currently has no nuclear power plants.

(By Maha El Dahan, Reuters)

Read more

South Africa’s Mediclinic agrees deal for Al Noor Hospitals

Comments (0) Africa, Business, Latest Updates from Reuters, Middle East

LONDON (Reuters) – South Africa’s Mediclinic Intl agreed to buy United Arab Emirates’ Al Noor Hospitals Group, gaining the upper hand on rival NMC Health in a tussle for expansion in the fast growing Gulf region.

But NMC Health, already a major player in the UAE, vowed to fight on, saying on Wednesday it remained committed to a tie-up with Al Noor.

Shares in Al Noor jumped 19 percent to 1,185 pence, above the 1,160 pence value of Mediclinic’s agreed offer and valuing the company’s equity at 1.38 billion pounds ($2.12 billion), as investors anticipated a battle for the group.

Mediclinic’s Chief Executive Danie Meintjes, who will remain CEO after the deal, said the combined group would be the largest private healthcare provider by revenue in the “highly attractive growth market of the UAE”.

Mediclinic, which has more than 50 hospitals in South Africa and Namibia, also has a presence in the UAE. Combining the two companies will create an operator with around 20 percent of the private beds in the region, analysts said.

It will also be the biggest player in Switzerland, the third largest in South Africa, and will have a 29.9 percent stake in Britain’s Spire Healthcare Group.

The deal, structured as a reverse takeover of Al Noor by Mediclinic, will create a London-listed group with a turnover exceeding $4 billion operating 73 hospitals and 35 clinics.

NMC Health, which is also listed in London, said it had made an informal cash-and-shares offer to buy Al Noor on Oct. 9, days after Al Noor and Mediclinic said they were in talks.

Al Noor Chief Executive Ronald Lavater said there was a “compelling strategic fit” with Mediclinic, and together they could expand coverage and service delivery in the region.

He said the board had considered the NMC Health proposal and had concluded it was “inferior both on the value and on the deal certainty”.

The tie-up with Mediclinic is backed by the two major shareholders in Al Noor, Sheikh Mohammed Bin Butti Al Hamed and Kassem Alom, who combined hold 34.3 percent, the companies said.

NMC, however, was undeterred. “This confirms our belief in the competitiveness of our initial possible offer and that the combination of NMC and Al Noor has the strongest strategic and financial rationale for all stakeholders,” it said.

Al Noor was advised by Rothschild, Goldman Sachs and Jefferies, while Morgan Stanley and Rand Merchant Bank worked for Mediclinic.

(By Paul Sandle, Reuters)

 

Read more

Burundi’s inflation eases to 4.1% year-on-year in September

Comments (0) Africa, Business, Latest Updates from Reuters

KIGALI (Reuters) – Burundi’s inflation rate dipped to 4.1 percent year-on-year in September from 4.2 percent a month earlier, helped by better production of some crops which slowed food price rises in local markets, official data showed on Tuesday.

The tiny central African coffee producer nation is facing one of its worst political crises after President Pierre Nkurunziza was re-elected in July for a disputed a third term.

Nkurunziza’s opponents said running again broke a peace pact that ended more than a decade of civil war in 2005. The country endured months of protests and violence and tens of thousands of people fled unrest that included an attempted coup in May.

As a result, Burundi’s economic output is expected to shrink by 7.2 percent this year after growing 4.7 percent in 2014, the International Monetary Fund said in its report on world economic output for October.

Burundi’s Institute of Economic Studies and Statistics (ISTEEBU) said inflation was under control between August and September due to a fall in the price of beans and rice, the most consumed food in a nation of nearly 10 million people.

Food price inflation slowed to 3.8 percent in the year to September from 4.6 percent in August, ISTEEBU said.

Economic analysts fear Burundi’s economic situation could worsen if the crisis persists and if more donors cut aid.

Some major donors such Belgium have already cut aid, in condemnation of the violence and human rights violations committed since April.

The European Union, which funds about half the annual budget of Burundi, is also considering whether to limit its aid, diplomats say, but is wary of hurting the general population.

It has imposed individual sanctions on security officials close to Nkurunziza who were implicated in the violence.

Read more

Kenya’s KenGen says full-year pretax profit more than doubles

Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s main electricity generator KenGen said on Monday its pretax profit for the full year to June rose 109 percent to 8.69 billion shillings ($84 million), helped by higher electricity sales.

KenGen, which is 70 percent state-owned, said in a statement its performance was boosted by increased generation from geothermal and wind power.

“Profit before tax increased … propelled by capacity growth, improved performance and tax credit from capital allowances enjoyed by the company following the commissioning of 280 MW geothermal plants, well heads and Ngong Wind,” it said.

It said electricity revenue jumped to 25.6 billion shillings from 17.4 billion the year before.

Earnings per share rose to 5.24 shillings from 1.29 shillings during the year to June 2014 and it said it would pay a dividend of 0.65 shillings per share, up from 0.40 shillings previously.

Operating costs rose to 8.41 billion shillings from 7.02 billion due to operating and maintaining new plants.

KenGen said in July it planned to add another 450 megawatts (MW) to the grid from wind and geothermal in the next three years at a cost of at least $710 million. [ID:nL8N0ZN29V]

Kenya, which depends heavily on renewables such as geothermal and hydro power, aims to expand installed capacity to about 6,700 MW by 2017, from about 2,500 MW now. It also aims to halve bills from between $0.17 and $0.18 per kWh within three to four years.

 

(Reporting by George Obulutsa; Editing by David Holmes, Reuters)

Read more

Dow Chemical seeks to triple Africa revenue in five years

Comments (0) Africa, Business, Latest Updates from Reuters, US

dow chemical

NAIROBI (Reuters) – Dow Chemical Co plans to triple its revenue from sub-Saharan Africa in the next five years and is investing in offices, local staff and manufacturing plants on the continent to meet that target, its head of the region said.

The company sees opportunities in agriculture, where it supplies crop protection chemicals, infrastructure, where it offers water treatment chemicals, as well as in mining and manufacturing.

“We expect to triple our revenue from Africa over the next five years. That is our objective and we are on track to do that,” Ross McLean, president for sub-Saharan Africa, told Reuters in an interview in Nairobi, without saying what revenue the company already achieves there.

“Dow is absolutely betting on Africa’s growth,”

Dow, whose group sales reached $12.9 billion in the second quarter, has opened hub offices in Kenya, to serve East Africa, and another in Ghana, serving West Africa. It is also opening offices in Ethiopia, Nigeria and Angola, as well as in other markets.

“Most multi-nationals, that are driving a growth strategy in Africa, are starting from a very low base, and currently they may be at 1 or 2 percent of the global revenue of the company,” he said, putting Dow’s revenue breakdown in line with that level.

Dow is also investing in a production plant in Egypt, and another in Saudi Arabia, where it has partnered with Saudi Aramco, in order to be consistent with supply of its products to African markets, McLean said.

He said challenges the company faced included weaker currencies in the region, and declines in prices of commodities and oil.

The World Bank cut its 2015 growth forecast for the region last week to 3.7 percent, the slowest since 2009.

McLean said that did not affect Dow Chemical’s ambitions.

“We are here for the long term and we are not scared by the bumps in the road. Africa is a place where you have to be pretty resilient and determined,” he said.

(By Duncan Miriri, Reuters)

Read more

Ugandan shilling stronger, helped low dollar demand, tight liquidity

Comments (0) Africa, Economy, Latest Updates from Reuters

KAMPALA (Reuters) – The Ugandan shilling was slightly firmer on Monday due to subdued dollar demand and tight liquidity in the money markets, traders said.

At 0905 GMT, commercial banks quoted the shilling at 3,668/3,678, stronger than Thursday’s close of 3,675/3,685. Markets were closed on Friday for a national holiday.

“Some players in the interbank are cutting back their (dollar) positions because there’s no demand,” said Ali Abbas, trader at Crane Bank.

“I have also seen some banks doing conversions to get shillings because there’s a bit of (shilling) scarcity.”

The local currency has lost 25 percent against the greenback so far this year and its steep depreciation has prompted the central bank to increase its key lending rate to try provide support and stem price pressures.

The rate now stands at 16 percent after being raised by a total of 500 basis points so far this year.

The central bank is due to make its next announcement on the rate on Thursday and most analysts expect a hike to help curb surging inflationary pressures.

Uganda’s inflation shot up to 7.2 percent year-on-year in September from 4.8 percent in August.

Bank of Africa said in a market note it expected some demand from energy companies, which could give the shilling some depreciation bias, though it will likely remain below 3,700.

(Reporting by Elias Biryabarema; Editing by George Obulutsa and Tom Heneghan, Reuters)

 

Read more

Botswana’s mining production index down 7.6% in Q2 y/y

Comments (0) Africa, Latest Updates from Reuters

GABORONE (Reuters) – Botswana’s mining production index fell to 98.5 in the second quarter of 2015, a year-on-year contraction of 7.6 percent, triggered by a slowdown in the diamond and copper mining sectors, its statistics office said on Wednesday.

Diamond production, exports of which contribute 30 percent to the GDP of the southern African nation, decreased by 5.4 percent in the second quarter of 2015 compared to a 1.5 percent contraction in the same period in 2014.

“This decline is mainly attributable to the weakening demand for diamonds in the global market,” Statistics Botswana said in a statement.

Copper production decreased by 69.7 percent year-on-year, the agency said.

 

Read more

Ivory Coast begins construction of Abidjan port upgrades

Comments (0) Africa, Business, Latest Updates from Reuters

ABIDJAN (Reuters) – Ivory Coast began construction on Tuesday of a four-year, 560 billion CFA franc ($962 million) project to build a second container terminal and widen the canal leading to its main port in the commercial capital Abidjan.

Among the busiest in sub-Saharan Africa, the port serves Ivory Coast, French-speaking West Africa’s largest economy and the world’s top cocoa producer, and is also a gateway for landlocked nations to the north.

China Harbour Engineering Co Ltd was awarded the construction contracts for both projects with the bulk of the cost covered by a loan from China’s Eximbank.

Construction of the new container terminal, which will be managed by consortium led by France’s Bollore, will last 48 months and cost 409 billion euros ($461 billion).

It is expected to allow Abidjan to increase container traffic from 1.2 million TEU to 3 million TEU by 2020.

The upgrades to the canal linking the port to the Atlantic Ocean will be completed in 36 months at a cost of 151 billion CFA francs.

Read more