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Etisalat sues MTN over use of frequency in Nigeria

8 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Etisalat Nigeria has filed a court case against rival MTN over the use of a new frequency band which MTN acquired when it bought internet provider Visafone, it said on Monday.

South Africa’s MTN bought the privately held Nigerian firm Visafone last month to improve its broadband services in its biggest market, giving it access to the use of 800 MHz frequency band on CDMA technology.

MTN operates 900 MHz and 1800 MHz frequency bands which the Nigerian Communications Commission (NCC) renewed last November, similar to frequencies operated by Etisalat and India’s Airtel that use GSM technology.

“The action is considered necessary to challenge the use of the spectrum by MTN at this time,” the local arm of Abu Dhabi-listed telecoms firm Etisalat said in a statement.

“The use of the 800 MHz spectrum to deploy broadband services ahead of its competitors … will further entrench MTN’s dominance in the Nigerian telecommunications sector”.

Etisalat said it was in contact with the NCC to understand the logic of its decision to approve the MTN deal despite declaring the South African firm a dominant player in Nigeria’s wholesale and retail voice markets in 2013.

MTN and the NCC did not respond to requests for comment.

The legal challenge is the latest headache for MTN in Nigeria, which contributed more than a third of the company’s total revenue in 2014.

Nigeria’s telecoms regulator fined the South African company $5.2 billion last year for failing to disconnect unregistered lines on time, before reducing the penalty by a quarter in December. MTN is contesting the fine, which is greater than its past two years of net profit.

Mobile phone subscription in Nigeria, Africa’s biggest telecom market, has grown in leaps and bounds since the advent of GSM technology in 2001 but average revenue per user (ARPU) has been on a downward trend due to increased competition.

MTN has 62 million lines in Nigeria while Visafone has 2 million. Etisalat ranks fourth in the industry with 23.5 million subscribers, according to NCC’s data.

 

(Reporting by Chijioke Ohuocha; Editing by Ulf Laessing and Adrian Croft)

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HeroTel wants to consolidate Wi-Fi service in South Africa

28 January 2016 Comments (0) Africa, Business, Featured

Alan-Knott-Craig-Jnr

The startup, with $4.75 million in capital, believes a single network will benefit consumers with more consistent service at lower costs.

Hundreds of small wireless providers are competing to connect Internet users in South Africa, but a new player has a different vision.

Instead of starting one more competing company, HeroTel founder Alan Knott-Craig Jr. wants to connect as many existing Internet providers as possible to form a national wireless network.

HeroTel hopes to consolidate the fragmented landscape of wireless Internet providers under a single brand. Knott-Craig said this would enable more consistent service for consumers at lower costs and aid expansion of service to areas that currently do not have broadband access.

HeroTel, launched in August 2015, has raised $4.75 million in investment capital and hopes to have a national footprint by April. Knott-Craig said he hoped the company would become the “Capitec of telecoms,” referring the South African banking network.

Knott-Craig, 38, is a South African entrepreneur and former CEO of the social network Mxit. He also founded Project Isizwe, a nonprofit that wants to put free Wi-Fi within walking distance of every South African.

Over the course of two years, the Isizwe Project has successfully turned the South African city of Tshwane (Pretoria), population 2.9 million, into the continent’s largest free public Wi-Fi network.

The network has 750 sites and more than 20 percent of the buildings in Tshwane are within walking distance of Wi-Fi, Knott-Craig said. One million people were to be connected by the end of 2015 with the entire population within walking distance of free Wi-Fi by 2017.

Knott-Craig believes that municipal governments should take responsibility for providing Wi-Fi to their citizens just as the governments provide electricity, sanitation and roads.

South-Africa Wi-Fi

South-Africa Wi-Fi

 

200 wireless providers operate in South Africa

In the private sector, he said there are about 200 wireless service providers operating in South Africa and the business is profitable. Revenues total about $53 million a year with profit margins of approximately 30 percent.

The problem, Knott-Craig said, is that consumers will demand greater wireless speeds at lower prices so a network makes more economic sense than a fragmented marketplace of providers.

Currently, Knott-Craig said, Wi-Fi speeds are doubling. But the cost to the consumer stays the same when it should be decreasing, he contends.

“People want fast reliable, affordable broadband, that’s all they want, and they don’t want you to feel like you’re doing them a favor by arriving to fix it,” he said.

Knott-Craig said South consumers now pay about 600 rand ($35) a month for 10 megabytes per second. He projected they will pay the same amount for 100 megabytes by 2017.

Five million households lack broadband access

He said HeroTel would use unlicensed spectrum, which is the same as the spectrum home and office consumers use for Wi-Fi.

In addition to improving service for existing customers, Knott-Craig believes pooling the resources of existing providers will enable the network to bring Internet access into about five million households that do not have broadband. Only about 400,000 of these are reachable by fiber-optic broadband, he said.

For the rest, he said, unlicensed spectrum Wi-Fi is the obvious answer because it is inexpensive, he said. “That’s why the HeroTel strategy makes sense.”

According to the Internet Architecture Board, South Africa has approximately 33.5 million Internet users, representing 61 percent of the population as of December 31, 2014.

Getting more people connected to the Internet will be good for all of South Africa, Knott-Craig said. “The more people in South Africa that are on the grid, whether it is the poor or the rich, the faster our economy can grow,” he said.

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Nigerian minister tells MTN to drop lawsuit over fine

26 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

By Julia Payne

ABUJA (Reuters) – South African cellphone operator MTN should drop its legal action over a $3.9 billion fine imposed in Nigeria to help facilitate talks on a possible settlement, the Nigerian telecommunications minister said on Tuesday.

The Nigerian Communications Commission (NCC) slapped a $5.2 billion fine on MTN in October for failing to disconnect users with unregistered SIM cards but after weeks of negotiations reduced it by 25 percent.

MTN, which makes about 37 percent of its revenue from Nigeria, then filed a suit in the West African country questioning NCC’s legal grounds for imposing the penalty.

“I’m not aware of any out-of-the-court settlement,” telecoms minister Adebayo Shittu told reporters.

Shittu said President Muhammadu Buhari will have the final decision on the matter, adding that MTN might be advised to withdraw the court case filed against the fine.

“If they withdraw it creates a better environment, an environment where there is no stress or pressure on either side,” he said.

A judge in Lagos, Nigeria’s commercial capital, last week gave the company until March 18 to try to reach a settlement with the Nigerian authorities over the fine. The prospect of a lower fine boosted MTN shares.

The fine equates to more than twice MTN’s annual average capital spending over the past five years.

Nigeria has been trying to halt the widespread use of unregistered SIM cards amid worries these are being used for criminal activity, including by the militant Islamist group Boko Haram.

 

(Writing by Ulf Laessing and Chijioke Ohuocha; Editing by Kevin Liffey and Keith Weir)

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Nigeria cuts MTN fine by more than a third to $3.4 bil

3 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Nigeria has cut a fine imposed on MTN Group by more than a third to $3.4 billion and given the South African mobile phone operator until the end of the year to pay it, the company said on Thursday.

The Nigerian Communications Commission handed Africa’s biggest mobile phone company the penalty in October after MTN failed to cut off users with unregistered SIM cards from its network.

Nigeria, MTN’s biggest market, has been pushing telecoms firms to verify the identity of subscribers amid worries unregistered SIM cards were being used for criminal activity in a country facing the insurgency of Islamic militant group Boko Haram.

The fine, originally $5.2 billion, prompted MTN to hold talks with the NCC over the past five weeks seeking a reduction.

“After further engagements with the Nigerian authorities, the NCC has reduced the imposed fine,” MTN said in statement.

The company, which makes about 37 percent of its sales from Nigeria, said it was considering the NCC’s decision.

“Executive Chairman Phuthuma Nhleko will immediately and urgently re-engage with the Nigerian authorities before responding formally,” it said.

Nhleko, who took charge for up to six months after the abrupt resignation last month of Sifiso Dabengwa, led the company for nine years before stepping down in 2011.

The fine came months after Muhammadu Buhari swept to power in Africa’s biggest oil producer, after a campaign in which he promised tougher regulation and a fight against corruption.

It also came after the kidnapping on Sept. 21 of Olu Falae, former Nigerian finance minister, by people whom the regulator said had used MTN phone lines to negotiate a ransom.

Some analysts have said the size of the fine risked damaging Nigeria’s efforts to shake off its image as a risky frontier market for international investors. Others said the fine showed Africa’s biggest economy was keen to enforce the law.

Separately, MTN announced a shake-up of its senior management structure in an effort to strengthen oversight, governance and regulatory compliance across its operations in 22 countries in Africa and the Middle East.

MTN’s Nigeria head Michael Ikpoki and the head of regulatory and corporate affairs Akinwale Goodluck have resigned with immediate effect, MTN said.

The company named Jyoti Desai, a 14-year veteran of the Johannesburg-based firm, as chief operating officer with effect from Dec. 1. Desai’s replacement as Group Chief Technology and Information Officer will be announced soon, MTN said.

 

(By Tiisetso Motsoeneng. Editing by Miral Fahmy and Mark Potter)

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Nokia remains bullish about Africa business despite economic slowdown

20 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

CAPE TOWN (Reuters) – Finnish network equipment maker Nokia remains upbeat about its growth prospects in Africa despite a slowdown in many of the continent’s fastest-growing economies, a senior company executive said on Thursday.

Nokia, which sold its once-dominant mobile handset business to Microsoft in 2014, deals in Africa mostly with telecommunications operators and governments, both of which have been hit by weaker currencies and slower economic growth.

But a growing wave of consolidation in the sector is forcing mobile operators to step up investment to take advantage of the spectrum they gain, said Nokia Solutions and Networks head for Southern Africa Deon Geyser.

“Worldwide growth is flattish, but Africa is a pocket of growth for us,” he told Reuters in an interview on the sidelines of the AfricaCom conference.

The region Geyser manages, which stretches from South Africa to Tanzania, is heavily dependent on commodities exports, and Geyser said the fall in the oil price had “hit a few key economies and subsequently the way they invest.”

However, he said fundamental technology trends remained unchanged and the company was “bullish” about Africa.

“You still have a significant amount of voice growth, even though revenue is flat, and you still have significant growth in data,” he said.

Nokia’s dominant networks division last month reported total net sales of 2.88 billion euros ($3.09 billion) in the third quarter, down two percent from a year earlier but up five percent from the second quarter.

Out of that total, the networks division reported net sales of 298 million euros in the Middle East and Africa in the third quarter, up six percent from a year earlier and up one percent from the previous quarter.

GDP growth in oil-rich Angola is forecast to fall to below 4 percent this year from 12 percent three years ago, while Zambia is also set slow to around 4 percent on the low copper price.

But these numbers won’t derail the general trajectory of telecoms spending on the continent, Geyser said.

“The consolidation on the continent will be good for us,” he said.

Nokia has launched an offer to take over rival network gear maker Alcatel-Lucent in a deal originally valued at 15.6 billion euros.

 

(Reporting by TJ Strydom; editing by Adrian Croft, Reuters)

 

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New MTN boss hints at cut to $5.2 bil Nigeria fine

10 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – The newly installed head of South Africa’s MTN has hinted that he would seek to reduce a $5.2 billion fine imposed on African’s biggest mobile telecoms company by the Nigerian authorities.

Non-executive chairman Phuthuma Nhleko was named executive chairman of MTN for up to six months after Sifiso Dabengwa stepped down as CEO with immediate effect on Monday.

His priority is dealing with the crisis in Nigeria, Africa’s most populous nation, which is MTN’s largest market and contributes more than a third of its revenues.

“I can’t say whether we’ll pay the whole fine. I don’t want to negotiate with Nigerian regulators on a public forum,” Nhleko, who is also a former CEO of MTN, told Talk Radio 702.

MTN has a deadline of Nov. 16 to pay the fine imposed on its unit in Nigeria for failing to cut off more than 5 million users with unregistered SIM cards.

The Nigerian communications regulator has been pushing cell phone network companies to verify the identity of their subscribers because of fears that unregistered SIMs were being used for criminal activity.

MTN would not comment on whether it has approached banks to ensure enough cash is available should the fine be enforced.

“The planning is based on all possible outcomes and contingencies and our aim is to comply with all regulations in Nigeria,” said MTN spokesman Chris Maroleng.

But analysts say Nhleko is pulling out all the stops to get the fine reduced.

“Nhleko will bring the matter to a conclusion,” said 36One Asset Management analyst Jean-Pierre Verster.

“I expect there will be a discount of somewhere between 5 percent and 75 percent.”

He sees the Nigerian regulator’s renewal of MTN’s operating licence last week as a sign that the regulator could cut MTN some slack.

Political risk consultancy eurasia said MTN would probably secure a reduction to the fine.

“We expect an eventual compromise to sharply scale back the size of the penalty (to less than half the original amount), especially as MTN takes concrete steps to address the regulator’s concerns,” it said in a published note.

Shares in MTN were down 3.9 percent at 153.75 rand by 1252 GMT, compared to a 1.6 percent drop in the Johannesburg Stock Exchange’s benchmark Top-40 index.

 

(Reporting by TJ Strydom; Editing by James Macharia and Keith Weir)

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Safaricom bags lion’s share of Kenyan mobile revenues

16 October 2015 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)

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Africa and the Middle East: Going Mobile

1 October 2015 Comments (0) Business, Featured, Middle East

ME mobile

By Enu Afolayan, Contributor

Going mobile. That’s the tune businesses, and marketers, are singing in the Middle East and Africa as the end of 2015 nears. If you don’t have a plan or haven’t started one, for the mobile marketplace, then you are at risk at being a generation behind the competition. You’re still driving a moped while everyone else is passing you by in their sleek, new electric cars that are almost driving themselves. Moreover, they are working on an app for that.

The people of the MEA market are snatching up mobile devices at a rapid rate and are second only to the Asia-Pacific market as the largest users of mobile phones. According to eMarketer, an independent market research company, 606 million people in the region have at least one mobile phone. They expect an increase to over 789 million in 2019. That’s a lot of phones. That’s a lot of people with phones who use mobile services and are increasingly buying goods and other services with them.

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Smile Telecoms raises $365m to fund Africa expansion

8 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters, Technology

Smile Telecoms

JOHANNESBURG (Reuters) – African mobile internet firm Smile Telecoms has raised $365 million to fund the expansion of high-speed broadband networks, it said on Tuesday, the latest firm to jockey for a position in the continent’s fast-growing mobile consumer market.

Telecoms and Internet companies are expanding in Africa to take advantage of the growing demand for data heavy services as more affordable smartphones encourage consumers to browse the internet, stream videos and download applications.

Mauritius-based Smile Telecoms said it would use the funds to extend its existing 4G LTE mobile broadband network in Nigeria, Tanzania and Uganda and also launch the network in the Democratic Republic of Congo in 2016.

The money was raised through a $50 million equity sale to Public Investment Corporation, a South African state-owned firm that manages more than 1.6 trillion rand on behalf of civil servants.

The rest of the funding was raised via debt from a group of investors that included Egypt’s African Export-Import Bank, Development Bank of Southern Africa, Diamond Bank plc and Standard Chartered Bank.

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