On Tuesday this week Global Mobile Daily picked up a story from Nigeria's Daily Trust newspaper, drawn from an interview with the CEO of universal access provider Gicell. The company, founded in 2006 and was awarded a National Unified Access Service Licence by the Nigerian Communications Commissions (NCC), which includes digital mobile services, fixed telephony services, full international gateway services and national long distance services.
Gicell CEO Usman Abubakar Gumi told the Daily Trust that his company is rolling out a CDMA 450 network to provide voice and data services, making its market debut in the five states of Adamawa, Borno, Cross River, Kwara and Oyo, all regions which have been identified as un-served or under-served. Mr Gumi noted that this was a condition of securing funding from a World Bank supported programme. Also, Gumi stated that "as a Unified Access licensee we intend to cover the country within the shortest possible time."
Gumi was asked about the size of the genuinely addressable market and how effectively he expected his company to compete with established GSM MNOs Globacom, MTN Nigeria and Zain Nigeria. Gumi argues that "Nigeria, with a population of over 140 Million, is the most populated country in Africa... [and has] a young and rural–based population with youth under 35 years old occupying the main parts of the population, [which means that] despite the 50 million subscribers, according to the current statistics, there are still additional 55 million addressable markets" (sic).
At our recent GSM>3G Middle East event in Dubai, a notable segment of the exhibitors were from power supply companies keen to showcase solutions to the challenges of providing telecoms services in areas with underdeveloped infrastructure. In the case of Nigeria's rural regions, Gumi says "there are lots of challenges but we would do it the way others are doing it and also as much as possible maximize the use of alternative source of energy such solar panels."
World Bank involvement seems to be an important part of the Gicell funding mix because, as Gumi argues, "the Nigerian banks are short term lenders and the industry is very capital intensive." The role of the World Bank in the project, says Gumi, "is to cushion the cost of the deployment of services in those [rural] areas and to maintain the services for at least five years whether is profitable or not." Mr Gumi feels, however that "based on our study it will be profitable."
Rural communications, bridging the digitial divide, extending service availability to under-served population segments: these are all buzz terms which seem to be resonating ever more persistently at the many Com World Series events covering emerging markets. So I hope my colleagues are able to secure the involvement of Gicell at the Abuja, Nigeria-hosted West & Central Africa Com conference and exhibition in June this year. It is always refreshing to have the established players joined in the panel of speakers by new market entrants.
31 Jan 2009
29 Jan 2009
Left-of-centre friends to the rescue of Ecuadorean cellco?
An item in Tuesday's Global Mobile Daily reminded me of comments I made back in August last year regarding one of the actors in Ecuador's mobile market, Alegro PCS, a state-owned CDMA MNO aligned with incumbent wireline operators Andinatel (which serves the Ecuadorean interior region) and Pacifictel (which offers services in the ten coastal provinces).
I noted back then that Alegro PCS was lagging far behind its two GSM rivals in terms of market share. At that time, I observed that according to Informa Telecoms & Media's World Cellular Information Service, Alegro's share of subscriptions shrank from 4.03% down to 3.00% in the period March 2008 to June 2008, losing further ground to Telefonica-backed Movistar Ecuador and América Móvil-owned Porta. Since then, the situation has worsened further for the state-backed cello, whose share of the market stood at just 1.31% by December last year, according to WCIS.
Tuesday's news concerned intervention which might save beleaguered Alegro from disappearing altogether. This comes in the form of reported offers for prospective strategic partnerships from Uruguay's Antel, and Venezuela's Movilnet, both of which are also owned by the Governments of their respective countries. For me, this is interesting in light of conversations I had in Caracas back in April 2008. I was visiting the Venezuelan capital as part of a tour intended to boost and diversify the participation at our Americas Com event, the latest iteration of which will take place at the end of June this year in Rio de Janeiro. In Caracas I got the impression that Movilnet and its parent company CANTV, entities renationalised by President Hugo Chávez's government in 2007, were looking hard at development partnerships with telcos in politically sympathetic states such as Cuba and, I think, Nicaragua. From what I heard in Caracas, it certainly sounded as though the Chávez Government intends to use CANTV and Movilnet to drive forward its social policies. I won't pretend to know as much about Ecuadorean politics as (the little) I have picked up regarding Venezuela. However, it is my understanding that Ecuador's Prsident Rafael Correa Delgado is a self-described "humanist and Christian of the left".
I am therefore not massively surprised to hear of Venezuela's state-owned telco coming to the aid of a similar company in what I assume to be a friendly country for President Chávez. Uruguay, too, is currently led by a left-leaning President, Tabaré Vázquez.
I came back from last April's trip with a slightly better understanding of life in South America, 75% of whose inhabitants now live under left-of-centre governments. I started to wonder about the links which might be forged bewtween these governments and how this would affect the region's telecoms landscape. The interest of Antel and Movilnet in coming to the rescue of troubled Alegro PCS looks like a development of this kind.
However, it might be the case that neither of these companies will become involved in the Ecuadorean MNO. Another interested party, according to the GMD story is Indonesia's Telekomunikasi Indonesia (Telkom).
We will know within 60 to 90 days, according to the report. Whichever company prevails, they will need to provide capital estimated at US$200 million to help improve operational efficiency at Alegro PCS.
This is all of interest to me because one of my final tasks here at Informa Telecoms & Media - before moving on to pastures new in March - is to pass on what I know about the Latin American telecoms scene to the colleagues gearing up for another successful Americas Com.
I noted back then that Alegro PCS was lagging far behind its two GSM rivals in terms of market share. At that time, I observed that according to Informa Telecoms & Media's World Cellular Information Service, Alegro's share of subscriptions shrank from 4.03% down to 3.00% in the period March 2008 to June 2008, losing further ground to Telefonica-backed Movistar Ecuador and América Móvil-owned Porta. Since then, the situation has worsened further for the state-backed cello, whose share of the market stood at just 1.31% by December last year, according to WCIS.
Tuesday's news concerned intervention which might save beleaguered Alegro from disappearing altogether. This comes in the form of reported offers for prospective strategic partnerships from Uruguay's Antel, and Venezuela's Movilnet, both of which are also owned by the Governments of their respective countries. For me, this is interesting in light of conversations I had in Caracas back in April 2008. I was visiting the Venezuelan capital as part of a tour intended to boost and diversify the participation at our Americas Com event, the latest iteration of which will take place at the end of June this year in Rio de Janeiro. In Caracas I got the impression that Movilnet and its parent company CANTV, entities renationalised by President Hugo Chávez's government in 2007, were looking hard at development partnerships with telcos in politically sympathetic states such as Cuba and, I think, Nicaragua. From what I heard in Caracas, it certainly sounded as though the Chávez Government intends to use CANTV and Movilnet to drive forward its social policies. I won't pretend to know as much about Ecuadorean politics as (the little) I have picked up regarding Venezuela. However, it is my understanding that Ecuador's Prsident Rafael Correa Delgado is a self-described "humanist and Christian of the left".
I am therefore not massively surprised to hear of Venezuela's state-owned telco coming to the aid of a similar company in what I assume to be a friendly country for President Chávez. Uruguay, too, is currently led by a left-leaning President, Tabaré Vázquez.
I came back from last April's trip with a slightly better understanding of life in South America, 75% of whose inhabitants now live under left-of-centre governments. I started to wonder about the links which might be forged bewtween these governments and how this would affect the region's telecoms landscape. The interest of Antel and Movilnet in coming to the rescue of troubled Alegro PCS looks like a development of this kind.
However, it might be the case that neither of these companies will become involved in the Ecuadorean MNO. Another interested party, according to the GMD story is Indonesia's Telekomunikasi Indonesia (Telkom).
We will know within 60 to 90 days, according to the report. Whichever company prevails, they will need to provide capital estimated at US$200 million to help improve operational efficiency at Alegro PCS.
This is all of interest to me because one of my final tasks here at Informa Telecoms & Media - before moving on to pastures new in March - is to pass on what I know about the Latin American telecoms scene to the colleagues gearing up for another successful Americas Com.
28 Jan 2009
... and now for good news from.... Europe?
In the context of this global economic slowdown, is it very surprising that someone who is involved in delivering audiences of telecoms operator execs to paying sponsors from tech vendors has dedicated recent blog entries to digging out good news about new licenses and new network deployments? The good news I've found has come from emerging markets and a recurrent trend, which I reflected on earlier this week, has been MENA region-based groups taking advantage of the good deals on offer in the current climate.
Yesterday's Telecompaper newsletter, however, came with reasonably positive news from a telco whose footprint is largely confined to Europe. This concerns T-Mobile, whose CEO Hamid Akhavan has told the Netherlands-based news and research house that the cellco "has yet to see a direct impact on its results from the economic slowdown and expects to maintain its performance in 2009."
Akhavan told Telecompaper that the group "is focused on growing service revenues, while maintaining its profit margins [and that] growth will come from innovative services such as its mobile data service Web’n’walk and new data-driven phones such as Apple’s iPhone and the G1 Android handset." However, in contrast to the expansionist agenda of Middle Eastern telecoms groups, for T-Mobile International "mergers and acquisitions are not on the agenda at the moment, due to the high cost of capital, according to the CEO."
T-Mobile International is currently present in only one non-European market, the USA. In February 2008, the US operation extended its coverage to Puerto Rico and the U.S. Virgin Islands via the acquisition of SunCom Wireless, an operator owith more than 1.1 million customers across these territories and the mainland US states of North Carolina, South Carolina, Tennessee and Georgia.
In Europe, T-Mobile's expansion from its German base has largely been eastwards. Aside from Dutch and UK operations, the T-Mobile footprint has spread over time to Austia and into the former Warsaw Pact countries and parts of former Yugoslavia. Both with Informa Telecoms & Media and in other roles, I have been closely involved in setting up CEE region networking, discussion and exhibition events in the telecoms space. In doing so, over more than five years I have had watched a number of T-Mobile rebranding exercises in this territory.
While we have decided that a CEE-themed event is not longer an important element of the Com World Series, we continue to provide networking and discussion opportunities in this part of Europe, albeit in an online setting. Our thriving CEE Com LinkedIn group is a useful forum for finding new contacts in the region and joining them in useful discussions. If you do business in Central and Eastern Europe, I would urge you to join up.
Yesterday's Telecompaper newsletter, however, came with reasonably positive news from a telco whose footprint is largely confined to Europe. This concerns T-Mobile, whose CEO Hamid Akhavan has told the Netherlands-based news and research house that the cellco "has yet to see a direct impact on its results from the economic slowdown and expects to maintain its performance in 2009."
Akhavan told Telecompaper that the group "is focused on growing service revenues, while maintaining its profit margins [and that] growth will come from innovative services such as its mobile data service Web’n’walk and new data-driven phones such as Apple’s iPhone and the G1 Android handset." However, in contrast to the expansionist agenda of Middle Eastern telecoms groups, for T-Mobile International "mergers and acquisitions are not on the agenda at the moment, due to the high cost of capital, according to the CEO."
T-Mobile International is currently present in only one non-European market, the USA. In February 2008, the US operation extended its coverage to Puerto Rico and the U.S. Virgin Islands via the acquisition of SunCom Wireless, an operator owith more than 1.1 million customers across these territories and the mainland US states of North Carolina, South Carolina, Tennessee and Georgia.
In Europe, T-Mobile's expansion from its German base has largely been eastwards. Aside from Dutch and UK operations, the T-Mobile footprint has spread over time to Austia and into the former Warsaw Pact countries and parts of former Yugoslavia. Both with Informa Telecoms & Media and in other roles, I have been closely involved in setting up CEE region networking, discussion and exhibition events in the telecoms space. In doing so, over more than five years I have had watched a number of T-Mobile rebranding exercises in this territory.
While we have decided that a CEE-themed event is not longer an important element of the Com World Series, we continue to provide networking and discussion opportunities in this part of Europe, albeit in an online setting. Our thriving CEE Com LinkedIn group is a useful forum for finding new contacts in the region and joining them in useful discussions. If you do business in Central and Eastern Europe, I would urge you to join up.
27 Jan 2009
Ghana: Vodafone commits to $120m network upgrade
It has been impossible of late not to set telecoms news and commentary in the context of these troubled times for the global economy. I find myself looking for signs of our sector's resilience. In that spirit, I am keen to flag up examples of telcos committing to significant items of CAPEX. One such, reported last week in the Global Mobile Daily is Vodafone's selection of network vendor Huawei to upgrade the 2G network of the national incumbent carrier, Ghana Telecom, in which the giant cellco acquired a 70% stake back in July 2008.
At the same time as entering Ghana's mobile market, Vodafone also took over Ghana Telecom's fixed-line and broadband operation, which has around 99% of the total number of lines and around 90% share of the retail ADSL market. Ghana Telecom's mobile arm, One Touch, has been something of an underperformer. The MNO claimed 15.49% of mobile subscriptions by December 2008, according to Informa Telecoms & Media's World Cellular Information Service. This represents a slow, but steady decline in market share, which had stood at 18.29% at the end of 2006. Over this period, market-leading Scancom, a unit of the South Africa's MTN has held onto a solid lead over its four rivals. According to an article in Ghana's Chronicle newspaper last week, Vodafone will be aiming to compete more effectively in this context through a "commitment to deliver on its promise of providing a world class service to Ghanaians and to transform Ghana Telecom to an enviable position in the telecom industry."
Ghana will be among the countries to be represented at our West & Central Africa Com event, which this year will take place in Abuja, Nigeria in mid-June. The event will be a good opportunity to network and do business with all those involved in developing the region's telecoms sector.
At the same time as entering Ghana's mobile market, Vodafone also took over Ghana Telecom's fixed-line and broadband operation, which has around 99% of the total number of lines and around 90% share of the retail ADSL market. Ghana Telecom's mobile arm, One Touch, has been something of an underperformer. The MNO claimed 15.49% of mobile subscriptions by December 2008, according to Informa Telecoms & Media's World Cellular Information Service. This represents a slow, but steady decline in market share, which had stood at 18.29% at the end of 2006. Over this period, market-leading Scancom, a unit of the South Africa's MTN has held onto a solid lead over its four rivals. According to an article in Ghana's Chronicle newspaper last week, Vodafone will be aiming to compete more effectively in this context through a "commitment to deliver on its promise of providing a world class service to Ghanaians and to transform Ghana Telecom to an enviable position in the telecom industry."
Ghana will be among the countries to be represented at our West & Central Africa Com event, which this year will take place in Abuja, Nigeria in mid-June. The event will be a good opportunity to network and do business with all those involved in developing the region's telecoms sector.
26 Jan 2009
How (hard) will the global slowdown hit telecoms M&A activity?
Last Thursday's telecoms.com blog newsletter came with yet another article discussing how telcos will need to respond to the current mood of economic gloom. A Frost & Sullivan analyst, Saverio Romeo is quoted as believing that the key to surviving the credit crunch is being able to design lower cost and disruptive business models as an effective way to attract consumers. Romeo highlights the combination of existing technologies with new business models to create low cost products and services, such as the combination of mobile content with forms of marketing and advertising.
This is important, according to Saverio Romeo, because "due to the lack of credit in the global economy, investments will fall in the beginning of 2009. Particularly, investments related to incredibly costly projects such as acquisitions, will feel this drop intensely."
However, I have heard the view articulated widely of late that acquisitions will continue to be a feature of the telecoms landscape in the near future, with some people even expecting this kind of activity to intensify. In this scenario, it is telcos headquartered in the Middle East that would be expected to be shopping for extensions to their various empires.
There are a good number of very recent examples. In addition to ones I've already discussed here, consider the case of QTel acquiring a "significant stake" in Philippines-based Liberty Telecom Holdings, a provider of wireless voice and data telecommunications services, according to a report from Qatari daily, The Peninsula earlier this month. In another recent move, according to Informa Telecoms & Media's Telecom Markets service, the Bahraini incumbent carrier Batelco is set to acquire a 49% stake in India's S-Tel in partnership with Millennium Private Equity for US$225 million. S-Tel, says the report, is preparing to launch GSM services in six Category C spectrum circles in the northern part of India and is funded by private-equity companies Sky City Foundations and Telecom Investments Mauritius. Writing about this move, Fredrick Richter of Reuters quotes Jithesh Gopi, a telecom analyst at Bahrain-based investment bank SICO: "Middle Eastern operators and their major shareholders are less risk-averse than some of their counterparts in other regions as most of them have relative low levels of debt."
Also this month, as reported by Global Mobile Daily, another MENA region heavyweight, Orascom Telecom, via its Telecel Globe unit, has paid US$59 million in cash for Namibian GSM player Cell One, after closing the deals it agreed to in July to reacquire Telecel Centrafrique in the Central African Republic and U-Com Burundi (formerly Telecel Burundi).
It will be interesting to track further activity of this type on the part of MENA's leading telecoms groups in the coming months. I wonder how much more shopping they will feel like doing as this challenging year unfolds.
This is important, according to Saverio Romeo, because "due to the lack of credit in the global economy, investments will fall in the beginning of 2009. Particularly, investments related to incredibly costly projects such as acquisitions, will feel this drop intensely."
However, I have heard the view articulated widely of late that acquisitions will continue to be a feature of the telecoms landscape in the near future, with some people even expecting this kind of activity to intensify. In this scenario, it is telcos headquartered in the Middle East that would be expected to be shopping for extensions to their various empires.
There are a good number of very recent examples. In addition to ones I've already discussed here, consider the case of QTel acquiring a "significant stake" in Philippines-based Liberty Telecom Holdings, a provider of wireless voice and data telecommunications services, according to a report from Qatari daily, The Peninsula earlier this month. In another recent move, according to Informa Telecoms & Media's Telecom Markets service, the Bahraini incumbent carrier Batelco is set to acquire a 49% stake in India's S-Tel in partnership with Millennium Private Equity for US$225 million. S-Tel, says the report, is preparing to launch GSM services in six Category C spectrum circles in the northern part of India and is funded by private-equity companies Sky City Foundations and Telecom Investments Mauritius. Writing about this move, Fredrick Richter of Reuters quotes Jithesh Gopi, a telecom analyst at Bahrain-based investment bank SICO: "Middle Eastern operators and their major shareholders are less risk-averse than some of their counterparts in other regions as most of them have relative low levels of debt."
Also this month, as reported by Global Mobile Daily, another MENA region heavyweight, Orascom Telecom, via its Telecel Globe unit, has paid US$59 million in cash for Namibian GSM player Cell One, after closing the deals it agreed to in July to reacquire Telecel Centrafrique in the Central African Republic and U-Com Burundi (formerly Telecel Burundi).
It will be interesting to track further activity of this type on the part of MENA's leading telecoms groups in the coming months. I wonder how much more shopping they will feel like doing as this challenging year unfolds.
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