Is Bharti Airtel’s Zain Deal Good For Africa? Maybe Not

Kato Mivule | February 16, 2010

Bharti is positioned to take over Zain assets in Africa and that includes operations in Uganda. However, Bharti failed at gaining access to Africa’s Telecom Boom by taking over MTN assets in Africa. Bharti then is reported to have borrowed money to secure the Zain assets in Africa. The translation of this is might mean restructuring and more of a profit driven ideology that might sacrifice employees and African indigenous talent in the short term. Yet still Bharti Airtel will bring with it innovation in the area of mobile applications and probably move Africa towards fully utilizing “Africa’s new PC”, as one blogger refereed to the mobile phone phenomenon in Africa.

Bharti AirTel Logo

Zain Sees $5 Billion Profit From Africa Unit Sale | Businessweek
Feb. 16 (Bloomberg) — Zain, Kuwait’s biggest phone company, said it expects a return of as much as $5 billion from selling most of its African operations to Bharti Airtel Ltd. in a deal that would almost halve its assets…Bharti, South Asia’s biggest mobile-phone company, and Zain said yesterday they entered into exclusive talks under which the Indian company would buy the African assets for $10.7 billion. Bharti will pay $10 billion when the deal is completed and the rest a year later, Zain said in a statement on the Kuwait Stock Exchange Web site today. The transaction excludes Zain’s operations in Sudan and Morocco….Bharti is seeking Zain’s African business for access to an estimated 42 million customers across 15 African countries from Nigeria to Uganda. Bharti’s third attempt to enter Africa highlights billionaire Chairman Sunil Mittal’s ambitions to expand overseas as competition intensifies at home, where call rates have fallen to less than a penny a minute. Mittal has tried to gain access to other fast-growing markets, including a second failed attempt last year to buy South Africa’s MTN Group Ltd. for about $23 billion.

Zain Logo

Bharti eyes debt financing for Zain Africa buy – sources | Money Control
Bharti Airtel, which has offered USD 10.7 billion for Kuwaiti telecom Zain’s African assets, is likely to finance the majority of the deal’s purchase price with foreign currency loans, three people familiar with the matter said…Zain, which is selling its telecoms operations in 15 African countries to Bharti, said on Tuesday the deal included USD10 billion to be paid at completion and the remaining USD 700 million by the end of the year…Separately, the NDTV Profit television channel said Bharti was considering a rights issue to help fund the deal. However, at the time of its ultimately thwarted merger talks with South Africa’s MTN Group last year, Bharti had said there was no plan for any rights issue. A Bharti Airtel spokesman declined to comment on Tuesday on how the firm would fund the deal. Standard Chartered and Barclays are advising Bharti Airtel on the merger and its funding, one of the sources told Reuters.

Broadband brings new hope to Africa’s poor, elderly- ITU

The East African|February 8 2010

Effective delivery of essential services in Africa lies with the deployment of broadband networks, according to the International Telecommunications Union (ITU), a United Nations agency for information and communication technology.

During the recently concluded African Union Summit held in Addis Ababa Ethiopia, the agency appealed to African countries to focus on broadband networks as the transformational technology that will aid in the efficient use of energy, management of healthcare in poor, ageing and isolated population as well as the delivery of the best education to future generations.

ITU secretary general Hamadoun Toure said broadband is the most powerful tool to drive global social and economic development as well as accelerate the realisation of the UN Millennium Development Goals.

He, however, noted that the cost of broadband must be made affordable and accessible in order to benefit Africa.

“While the technology exists, the benefits are yet to be realised in most countries. This is because broadband networks can never deliver on their full potential until they provide each citizen with fast, affordable access,” said Dr Toure.

The ITU boss told the AU meeting, whose theme was “Information and Communication Technologies (ICTs) in Africa: Prospects and Challenges for Development,” that broadband networks must be regarded as basic national infrastructure, just like transport, energy and water networks.

Dr Toure added that Africa has to “act as one in its approach to formulating its Vision 2020,” during this decade — whose theme is premised on the idea of an integrated Africa through the utilisation of ICT.

Vision 2020 will address various strategies including common codes and spectrum management, harmonisation of policy and regulatory frameworks and low cost continental roaming.

It will also address affordable rural access and direct inter-continental links through fibre optics and satellite.

“In general, it will tackle key global issues related to ICT such as cyber security, cyber peace and emergency communications especially during natural disasters, content development through e-health, e-commerce, e-government, e-education and e-agriculture,” he said.

In order to encourage investment in the continent’s ICT sector, the ITU boss said there is “real opportunity to use all the potential of public-private partnerships (PPPs).”

The driver to new investments in the ICT sector, he added, would be a policy and regulatory framework conducive to competition and growth, as well as capacity building and training on policy issues in the continent.

On the levels of mobile tele-density (the number of telephone lines per 100 people), Toure said at the start of last year, the levels across Africa were at 38 per cent of the population but had improved to 42 per cent.

He, however, said the Internet user base, which by 2008 had grown to 48 per cent, was still low with only 8 per cent of the continent’s 840 million people having access.

Jean Ping, chairperson of the AU Commission highlighted different projects the body had launched in various fields including ICT, infrastructure, energy, agriculture and education.

“The Commission has also made progress in driving the science, technology and information society. An example is the tele-medicine facility opened at the AU clinic during the Summit through partnership with the Indian government,” said Ping.

The tele-medicine facility, financed by the Indian government, is part of the Pan African e-Network project, which is meant to enhance Africa’s capacity by imparting quality education to students and providing tele-medicine services, tele-education and video-conferencing as well as voice services for heads of state.

South Africa’s Internet Users Projected to Double in 5 Years

Kato Mivule January 20, 2010

Though the projections look promising on the side of PC Connectivity, much focus could be placed on smartphones and Notebooks. Personally I do not think that PC Connectivity is the future. The number of Cell Phone subscribers is 300 Million and beyond currently in Africa. Therefore smartphones and Notebooks have a far brighter future in Africa. Education could be focused on how best to utilize smartphones to solve a number of problems in Africa…

Web: SA’s internet users could double by
2015
SA Business Report January 15, 2010 By Thabiso Mochiko

South Africa’s internet users could double to 10 million by 2015
as the the cost of telecommunications falls and the number of personal computers
and smartphones connected to the Internet grows, Arthur Goldstuck, the managing
director of World Wide Worx, said on Friday.

The firm announced
this week that internet users in the country rose by 15 percent to 5.3 million
at the end of 2009 and could reach 6 million by the end of
2010.

Goldstuck said the growth to 10 million users would come from
a combination of an estimated 8 million computers with a internet connection by
2015 and increase in the number of consumers owning smartphones that have access
the internet.

“It will take a couple more years before mobile
internet users outnumber PC-based internet users,” he
said.

Goldstuck added that for internet usage to increase limits on
internet use needed to disappear completely or at least be made far less
restrictive.

“One of the areas of most dramatic usage growth
worldwide right now is in video material online, but South Africa’s data
restrictions mean we are kept from becoming part of that trend. It will take
several years for online video to take off to the same extent in South Africa,
but lifting data restrictions will open that market immediately,” he
said.

Barriers to entry should also be lowered including the cost
of access to asymmetric digital subscriber line or ADSL, which is dominated by
Telkom.

“A stronger push needs to be made for computer literacy,
starting in schools, but also extending to adult education in disadvantaged
communities,” he concluded. – I-Net Bridge

MS Office 2010 in Africa is a Waste of Time

Kato Mivule | January 6, 2010

Microsoft is set to release the new Office 2010 Suit sometime soon and has already dictated prices for the new product that range from 99 to 499 US Dollars.

I find the ‘Price Release’ strategy a little arrogant and outrageous given the current state of the global economy, especially when it comes to Africa. Millions of Clients around the world are expected to migrate from Office 2007 or 2003 for that matter and get onboard with Office 2010 at Microsoft’s terms.

Microsoft sets prices for forthcoming Office 2010 – Washington Post
“SEATTLE — Microsoft Corp. will sell four versions of its forthcoming Office 2010 software, due out in June, for prices ranging from $99 to $499. The company said Tuesday it will sell Office Home and Student edition, which comes with four core programs, Word, Excel, PowerPoint and OneNote, for $149 as boxed software that can, as with previous versions, be installed on three computers in the home. A “Product Key Card,” which has a code to unlock one copy of Office 2010 pre-loaded on new PCs, costs $119. Microsoft will sell an education-only version, Office Professional Academic, through campus book stores and some retailers for $99. Besides the core programs, the academic version comes with the Outlook e-mail program, Publisher for desktop publishing and the Access database software…”

Some critics are giving Microsoft high marks because of the successful “flawless” launching of Windows 7 late last year. Though it might be true that Windows 7 had a successful début, many of Microsoft’s Clients had been waiting for almost a decade for a new operating system to replace Windows XP.

Clients were more than willing to put up with the flaws of Windows XP than purchase a bulky and disgusting Windows Vista Operating System. Yet the successful “flawless” launching of Windows 7 and almost simultaneous release of MS Office 2010 will not catapult the sales for Microsoft.

Already many in the corporate world are transitioning to OpenOffice.org and taking full advantage of Google’s version of online office products that seem to be getting better.

For one thing in Africa, Office 2010 will sit on shelves and OpenOffice and Google will make inroads at almost no costs apart from training and support.

Rather than pay 499 US Dollars for new MS Office 2010 professional, African IT heads would rather invest in training, support, and Internet Access at lower costs for OpenOffice and Google web office products.

Many in Africa still utilize MS Office 2003 and I do not think they see it fit to waste resources to purchase a new MS Office 2010 professional for 499 US Dollars.

Mobile Telecom – Africa’s ‘Big Thing’ this Past Decade

Kato Mivule |December 29, 2009

The greatest I.T Achievement in Africa is the phenomenon of Mobile Phones across the continent. The transformational impact will no doubt be felt across political, social, and economic sectors across the African Continent in the coming decade. As the article below articulates, the only connection to the rest of the world in Africa is through mobile communication currently. No longer will Africa be a ‘Dark Continent’ when it comes to Information Technology. The ‘Digital Divide’ is still a reality for many in Africa but the Mobile Phone Phenomenon, is Africa’s Greatest Tech Achievement for this past decade.

Africa sees massive growth in mobile web usage | Guardian UK | Dec 22

• Facebook is the most popular destination among African users

•Twitter is the ninth most visited internet site in South Africa

Having swept America and conquered Europe, social networking site Facebook is now spreading rapidly through Africa.

From the deserts of Libya to the plains of Tanzania•Facebook is fast becoming the continent’s most visited mobile site as Africans use their phones to access the internet, according to a new report.

Even micro-blogging phenomenon Twitter is making an impact, appearing as the ninth most visited mobile internet site in South Africa and Kenya, according to a study by Oslo-based mobile software developer Opera of the top ten ‘mobile web’ countries in Africa.

The most popular African destination on the mobile web, is Facebook. The social networking site is visited by users of Opera’s mobile web browser in six out of the 10 countries surveyed by the company . Google is either number one or two in every African state except Kenya where Yahoo dominates.

Email services such as Hotmail and Gmail are also popular as is YouTube. The online video site has its highest rankings in Egypt, at number three, and Libya, at number four.

Among news sources, the BBC figures strongly in the top ten most visited sites in Nigeria, Kenya, Ghana, Tanzania, Namibia and Zambia. CNN features prominently in the top ten in Nigeria, Ghana and Zambia. They are the only two western news sources among the most popular mobile internet destinations across the ten African countries analysed by the Opera survey.

Sport features strongly with French sports newspaper L’Équipe the sixth most visited mobile web site in Ivory Coast. Egyptian mobile phone users flock to Arabic language sports portal Filgoal.com and Libyans prefer rival Koora.com.

Mobile Phone Charging Booth | Image Source: Kiwanja.net

Mobile usage is ballooning across the continent and the African mobile phone market – at more than 400 million subscribers – is now larger than in North America. Some countries, such as South Africa, have ‘mobile penetration levels’ – the number of handsets compared with size of population – close to those of Western Europe.

For many people in Africa, mobile telephones are the only way that they will ever get access to the internet because of the poor quality, and often complete lack, of fixed-line networks. Fierce competition has pushed mobile prices down for consumers while many of the latest crop of handsets available in Africa allow easy access to the mobile internet. Web browsers can also be installed on older phones.

The mobile web browser developed by Opera is the most popular in Africa, accounting for more than half the market, and in its latest State of the Mobile Web report, Opera estimates that the number of handsets using its browser across the top ten African states has leapt 177% in the past year. The report looks at South Africa, Nigeria, Kenya, Egypt, Ghana, Libya, Ivory Coast, Zambia, Tanzania and Namibia. Opera refuses to give overall customer numbers for Africa, but in its largest market – South Africa – it had 1.5 million ‘unique users’ in October.

Internet-enabled handsets are being used to access ever more mobile web sites, with page views shooting up 374% between November 2008 and last month. In some countries such as Kenya and Zambia, hundreds of pages are being accessed each month as handsets are often used by more than one person to get online. Across the continent roadside kiosks proliferate where people ‘rent out’ mobile phones. At first the devices were little more than a replacement for public phone boxes, allowing people to call friends and family, but increasingly they are being hired out as computers, allowing those who cannot afford a device of their own, to access the internet on a regular basis.

Opera’s mobile phone internet browser is the most popular worldwide, used by almost 27% of all mobile internet users. The iPhone is in second place with Nokia’s web browser in third, between them the top three account for nearly 70% of the market, according to data from StatCounter. Opera estimates that it has more than 41.7 million users worldwide, up from about 16.4 million in November last year, helped in part by the pre-installed browser in many recent models of smartphones.