Microsoft’s new drive to target Africa – the 4Afrika initiative, as the software giant’s marketing people have styled it –
highlights the growing and deserved importance of the continent to global technology players.
Eighteen months after Tunisia’s Jasmine Revolution marked the onset of the Arab Spring, what effect has the upheaval in the region had on the telecoms sector?
Within the past year, four Middle East operators have launched LTE: Etisalat in the UAE; and all three of the mobile operators in Saudi Arabia – STC, Mobily and Zain.
But it is still early days for LTE in the Middle East. Although none of the operators will reveal their LTE subscription numbers, the indications at the LTE MENA conference, which was put on by Informa Telcoms & Media in Dubai on April 29-30, were that the number of LTE subscriptions in the region is still only in the low thousands.
This year’s AfricaCom conference and exhibition, which was put on by Informa Telecoms & Media in Cape Town on 9-10 November, was bigger and busier than ever before, demonstrating the vibrancy and potential of Africa’s telecom market.
But the regional industry isn’t just growing – it is also beginning to undergo some potentially profound changes, as data services become ever-more important and new, non-operator players take an increasingly prominent role.
Big changes are underway at Bahrain’s incumbent operator Batelco, which has just unveiled an overhaul of its senior management; is reported to be planning to sell most of its stake in its Indian venture; and might soon be in control of Zain Saudi Arabia, with partner Kingdom Holding.
For a long time, Informa Telecoms & Media analysts have felt like lone voices in the wilderness, banging on about the potential for MVNOs in Saudi Arabia, only to be met with apparent indifference and even scorn.
It was apparent at the East Africa Com conference, recently put on in the Kenyan capital Nairobi by Informa Telecoms & Media, that the East African telecom market is undergoing profound change.
Bharti will be looking to reinvent Zain Africa by introducing the low-cost business model that it has pioneered successfully in India. Bharti will also be hoping to achieve economies of scale across its Asian and African operations, which together will make it the fifth-largest mobile operator in the world. But operating in Africa does present particular challenges, some of which will be new to Bharti, despite its credentials as an emerging-market operator.
As the great and good of the mobile industry browsed the exhibits at the Mobile World Congress trade show in Barcelona this week, they may have overlooked a couple of watershed moments in emerging-market telecoms.
The prospects for WiMAX seemed to have dimmed somewhat in the past couple of years as a result of the strong growth of HSPA, which is often seen as a rival to WiMAX, and a recession that has reduced the appetite for the spending necessary to build networks.
As the Middle East’s mobile markets mature, and with the impact of the recession still raw, many of the region’s operators are becoming more cost-conscious.
Progress on the region’s big M&A deals – the prospective sale of Zain Africa or a stake in Zain; and the cash and share-swap deal between Bharti and MTN – appears to have stalled. There has been such confusion in the past few days over the possible sale of a large stake in Zain to an Indo-Malaysian consortium that it is at risk of descending into a debacle.
All good things must come to an end, and it looks as if Zain’s African adventure might be drawing to a close. There is little doubt that Zain is considering the sale of its operations in sub-Saharan Africa, or at least of a stake in those operations.
The telecoms market in West and Central Africa remains vibrant, but the message from last week’s West & Central Africa Com conference, organized in Abuja, Nigeria, by Informa Telecoms & Media, is that business is getting tougher for operators as a consequence of slowing growth rates, increasing competition and falling ARPUs, and the global economic slowdown.
East Africa currently has no submarine cable connections to the rest of the world, and as a result all international Internet connectivity in the region depends on expensive satellite services.
The members of Etisalat’s international investment team must be feeling pleased with themselves.
Last week, Oman’s telecoms regulator awarded five “reseller” licenses, allowing the new licensees to launch MVNO services, subject to agreements with host operators. The regulator insists on the term “reseller” rather than MVNO, but in effect they are MVNO licenses.
In the first of a flurry of recent mobile-money-service announcements, Vodafone said last week that it would launch its M-Pesa mobile-money-transfer service in Tanzania later this month in partnership with Vodacom. Tanzania’s No. 4 operator, Zantel, responded by saying it would introduce its own mobile-money-transfer service, beating the launch of M-Pesa. Then the UAE’s Etisalat, which has a majority stake in Zantel, said it was developing an international money-transfer service with Indian operator Idea Cellular, HSBC India and Mashreq Bank.