Azerbaijan was one of the most talked-about markets at last week’s 6th annual Eurasia Com event in Istanbul. Although Turkey is by far the region’s leader (with great talks of broadband opportunities and MVNO launches), and Uzbekistan is hailed as the next big thing, one of the markets that was most talked about was Azerbaijan. Within it, the company that drew my attention most was Bakcell, its 2nd mobile operator.
Bakcell was represented by Ineke Botter, its new CEO of two months, and seemingly the only female senior executive in the region’s telecom (although I’d welcome anyone to contradict me on this!). With a background in Greenfield operations, she was brought to the company to rethink its position and fulfil its stakeholders’ renewed ambitions.
After 15 years in the market and 1.5 million subscribers (according to my number-crunching colleagues at WCIS), Bakcell is still somewhat lagging behind Azercell, the mobile arm of incumbent fixed-line operator Azertel (3.6 million subscribers), and threatened with being caught up by relative newcomer Azerfon/NAR Mobile, already claiming 1.01 million subscribers after a launch in 2007. Furthermore, smaller alternative operators are trying to make a mark in the market, particularly with broadband services: CDMA player Catel, and new WiMAX ISP Delta Telecom (whose CTO Rahid Alekberli also spoke at the event). In these conditions, Bakcell has been suffering, according to Ms Botter, from an image of an old-fashioned company at a standstill in the market.
But under the impulse of new shareholders with “great ambitions and great expectations”, and a new management team at the helm of the company, Bakcell is gearing up to face the competition and make a strong impact in Azerbaijan’s telecom. The company is being reorganised along some key drivers to move towards a new image and stronger market position:
- A strong team to lead the change, with new executives coming from diverse backgrounds; one of them, CMO Steinn Naevdal, was at the event and is bringing experience from other emerging markets
- Building an efficient network with new ideas to facilitate the rollout (and “not just cut and paste from other operators’ models”), and money to spend; Ms Botter said the company has “good CapEx to spend”, and indeed a GSM network expansion contract was announced with Nokia Siemens Networks last month
- Focusing on the company’s Azeri roots, to differentiate from foreign-owned competitors
- Building healthy relations with the government, with the objective of participating in the process of creating an independent regulator, which doesn’t yet exist in the country
These clear points, presented with conviction by Ineke Botter, made me think that we would probably hear more from this company. I am looking forward to hearing about the innovative solutions that are to be tried out, and maybe even more to seeing its competitors’ response.
26 Mar 2009
Zain on its way to global domination
When Chris Gabriel (CEO of Africa at Zain Group) announced at AfricaCom last November that the group was ‘shopping’ and expected to confirm 3 or 4 deals in 2009, it sounded quite bullish, if in line with his presentation’s very enthusiastic tone. After all, one of the main topics discussed at the event was the likely impact of the global economic downturn on Africa’s markets, not to mention that on that same stage the year before, another group CEO (Nizar Dalloul of Comium) had said he expected to announce 2 deals in the following month – which didn’t happen.
But Zain is an unstoppable group, and they already had an announcement to make in the first quarter of this year, with a stake in Morocco’s Wana. I first heard this company’s story at North Africa Com in 2007, when their CEO gave a presentation in which he described their move from being an ISP to providing mobile CDMA services. Since then, they have acquired a GSM licence and are set to really shake Morocco’s market, one of the region’s most promising thanks to good economic and competitive conditions. Wana has been noticed for its ability to stay at the forefront of technology innovation, enabling them to provide attractive and affordable services to consumers that are increasingly technology-savvy. This model, combined with Zain’s buying power, is probably a great recipe for success. It also gives Zain its first presence in North Africa, a more developed market than the rest of Africa, where other Middle-Eastern investors (Etisalat and Qtel) have already established a strong presence.
Following this interesting first move of the year, Zain is now announcing a renewed interest in India’s booming market. Opportunities to invest are becoming rarer, and competition is already fierce, but the size of the potential market still means it is on the right side of the growth curve. Zain is said to be looking at two privately-owned operators who have yet to make their mark. India is one of the world’s most attractive markets, but also a difficult one for operators, considering the slowness of the regulatory decision process. We’ll see at our forthcoming event India & South Asia Com if Zain’s announcement is creating interest in the market.
If a deal was to be confirmed, this would be the group’s first step outside its original Middle East and Africa presence, towards its strategy of becoming a global operator. It is said to be looking at other parts of Asia as well. Going further East, there are some interesting markets with great potential in South East Asia: Vietnam, Laos and Cambodia for instance are experiencing great growth; regulatory changes are helping the sector’s development, and other international groups are showing interest. A possible future move then?
But Zain is not the only Middle-Eastern operator group looking at entering other markets. It is a noticeable trend, which has come up a lot in some of my colleagues’ conversations with local observers. The general feeling is that Zain is cleverly selective over its investments, going for strong growth markets where competition is still within reasonable levels. On the other hand, other groups are said to be spending over-the-odds for ‘trophy’ acquisitions, their main strategy being seemingly to place their logos in as many markets as they can regardless of the foreseeable returns. This will be a main focus at the Dubai event in the Com World Series to take place at the end of the year. Hopefully by then we’ll have a better idea of how investment is evolving in the region and more generally in emerging markets.
But Zain is an unstoppable group, and they already had an announcement to make in the first quarter of this year, with a stake in Morocco’s Wana. I first heard this company’s story at North Africa Com in 2007, when their CEO gave a presentation in which he described their move from being an ISP to providing mobile CDMA services. Since then, they have acquired a GSM licence and are set to really shake Morocco’s market, one of the region’s most promising thanks to good economic and competitive conditions. Wana has been noticed for its ability to stay at the forefront of technology innovation, enabling them to provide attractive and affordable services to consumers that are increasingly technology-savvy. This model, combined with Zain’s buying power, is probably a great recipe for success. It also gives Zain its first presence in North Africa, a more developed market than the rest of Africa, where other Middle-Eastern investors (Etisalat and Qtel) have already established a strong presence.
Following this interesting first move of the year, Zain is now announcing a renewed interest in India’s booming market. Opportunities to invest are becoming rarer, and competition is already fierce, but the size of the potential market still means it is on the right side of the growth curve. Zain is said to be looking at two privately-owned operators who have yet to make their mark. India is one of the world’s most attractive markets, but also a difficult one for operators, considering the slowness of the regulatory decision process. We’ll see at our forthcoming event India & South Asia Com if Zain’s announcement is creating interest in the market.
If a deal was to be confirmed, this would be the group’s first step outside its original Middle East and Africa presence, towards its strategy of becoming a global operator. It is said to be looking at other parts of Asia as well. Going further East, there are some interesting markets with great potential in South East Asia: Vietnam, Laos and Cambodia for instance are experiencing great growth; regulatory changes are helping the sector’s development, and other international groups are showing interest. A possible future move then?
But Zain is not the only Middle-Eastern operator group looking at entering other markets. It is a noticeable trend, which has come up a lot in some of my colleagues’ conversations with local observers. The general feeling is that Zain is cleverly selective over its investments, going for strong growth markets where competition is still within reasonable levels. On the other hand, other groups are said to be spending over-the-odds for ‘trophy’ acquisitions, their main strategy being seemingly to place their logos in as many markets as they can regardless of the foreseeable returns. This will be a main focus at the Dubai event in the Com World Series to take place at the end of the year. Hopefully by then we’ll have a better idea of how investment is evolving in the region and more generally in emerging markets.
4 Mar 2009
Events still scoring highly in the marketing mix ...
Despite the current downturn, a new study has revealed that event marketing is on the rise, with 53% of 300 respondents choosing it as the best discipline for building relationships.
The EventView Report, produced by The Meeting Professionals International Foundation, Event Marketing Institute and George P. Johnson, found that face-to-face marketing activities are playing a fundamental role within the marketing mix.
The results found that 26% of respondents chose event marketing as the marketing method that generates the greatest ROI, up 4% from 2008.
“Senior marketers believe events are the mot effective medium to engage customers and move them to purchasing behaviour,” said MPI, President and CEO Bruce MacMillan.
29% of respondents also said they will “transition from event marketing to experiential marketing in the next 12 months”.
http://www.eventmagazine.co.uk/news/bulletin/newsbulletin/article/881493/?DCMP=EMC-NewsBulletin
The EventView Report, produced by The Meeting Professionals International Foundation, Event Marketing Institute and George P. Johnson, found that face-to-face marketing activities are playing a fundamental role within the marketing mix.
The results found that 26% of respondents chose event marketing as the marketing method that generates the greatest ROI, up 4% from 2008.
“Senior marketers believe events are the mot effective medium to engage customers and move them to purchasing behaviour,” said MPI, President and CEO Bruce MacMillan.
29% of respondents also said they will “transition from event marketing to experiential marketing in the next 12 months”.
http://www.eventmagazine.co.uk/news/bulletin/newsbulletin/article/881493/?DCMP=EMC-NewsBulletin
23 Feb 2009
Post Barcelona, plenty left to discuss about emerging markets
Another year, another Mobile World Congress gone. Writing from an office in London, it’s always nice spending a few days in sunny Barcelona and be reminded that not everywhere is suffering the cold and damp of Britain’s climate.
This year’s event was remarkable by its lack of excitement. The parties were toned down (even the opening party was cancelled), and there were few new topics being talked about.
The state of the world’s economy was of course on everybody’s minds. In the keynotes, the big operators were resolutely optimistic about the telecoms sector’s ability to survive the crisis. Telefónica’s Executive Chairman Cesar Alierta went as far as saying that telecoms can “become the primary contributor to economic recovery” (while workers from his Spanish operation were demonstrating outside the congress for better union representation).
Emerging markets received a better coverage than last year’s event, although nothing outstanding was mentioned, and there was little representation among the speakers or the audience from Africa, Asia or Latin America – a sign of travel reduction from many companies, or of the move of the congress towards being a developed markets event? Following the session on Mobile Broadband for All, the main slot looking mostly at emerging markets was the Mobile Money session. Extended over two days, it gave an opportunity to solutions vendors and existing banks to showcase their visions for the services. However, they didn’t pay much attention to restrictions posed to mobile money services by strict banking regulations in countries where the services would be most useful. The undoubted winner of the mobile money market to date is still the M-Pesa service championed by Safaricom in Kenya. The service using technology developed by Vodafone, is giving established money transfer company Western Union a hard time by charging up to 10 times less commission per transaction, as was explained last year by the operator’s CEO Michael Joseph. They avoid regulatory restrictions by keeping the service to simple money transfers, but even this model is causing regulatory issues in a number of markets where the product could be successful. There will be more opportunities to discuss this in details at the upcoming East Africa Com event in Nairobi, Kenya in April, in which Mr Joseph will give a keynote presentation.
So what about the great market opportunities coming from emerging markets in these troubled times? Seemingly lost in talks about mobile broadband and LTE, investors and vendors rarely mentioned their strategies to address the markets that are still growing and investing in networks. Only this morning, Zain Group’s Africa representative Chris Gabriel announced plans to invest $1.5 billion in Africa to expand its existing networks, after having raised $4.5 billion last year to fund acquisitions and to upgrade its networks. Financing projects at such a large scale is certainly not easy for groups which don’t have the huge presence of Zain, but despite the difficulties in confirming funding plans, operators in emerging markets are likely to fare better out of the global economic downturn than their European or North-American counterparts.
This year’s event was remarkable by its lack of excitement. The parties were toned down (even the opening party was cancelled), and there were few new topics being talked about.
The state of the world’s economy was of course on everybody’s minds. In the keynotes, the big operators were resolutely optimistic about the telecoms sector’s ability to survive the crisis. Telefónica’s Executive Chairman Cesar Alierta went as far as saying that telecoms can “become the primary contributor to economic recovery” (while workers from his Spanish operation were demonstrating outside the congress for better union representation).
Emerging markets received a better coverage than last year’s event, although nothing outstanding was mentioned, and there was little representation among the speakers or the audience from Africa, Asia or Latin America – a sign of travel reduction from many companies, or of the move of the congress towards being a developed markets event? Following the session on Mobile Broadband for All, the main slot looking mostly at emerging markets was the Mobile Money session. Extended over two days, it gave an opportunity to solutions vendors and existing banks to showcase their visions for the services. However, they didn’t pay much attention to restrictions posed to mobile money services by strict banking regulations in countries where the services would be most useful. The undoubted winner of the mobile money market to date is still the M-Pesa service championed by Safaricom in Kenya. The service using technology developed by Vodafone, is giving established money transfer company Western Union a hard time by charging up to 10 times less commission per transaction, as was explained last year by the operator’s CEO Michael Joseph. They avoid regulatory restrictions by keeping the service to simple money transfers, but even this model is causing regulatory issues in a number of markets where the product could be successful. There will be more opportunities to discuss this in details at the upcoming East Africa Com event in Nairobi, Kenya in April, in which Mr Joseph will give a keynote presentation.
So what about the great market opportunities coming from emerging markets in these troubled times? Seemingly lost in talks about mobile broadband and LTE, investors and vendors rarely mentioned their strategies to address the markets that are still growing and investing in networks. Only this morning, Zain Group’s Africa representative Chris Gabriel announced plans to invest $1.5 billion in Africa to expand its existing networks, after having raised $4.5 billion last year to fund acquisitions and to upgrade its networks. Financing projects at such a large scale is certainly not easy for groups which don’t have the huge presence of Zain, but despite the difficulties in confirming funding plans, operators in emerging markets are likely to fare better out of the global economic downturn than their European or North-American counterparts.
16 Feb 2009
Will the global economy cloud the annual telecoms fest in Barcelona?
There’s no escaping talks about the global economic downturn. As the main news in the UK this morning was the loss of another 850 jobs after the closing of a Mini car factory near Oxford, the world of telecoms too continues worrying about the downturn.
The opening of annual telecoms gathering Mobile World Congress in Barcelona today gets a mention in Spanish daily El Pais, only to say that the event’s attendance is affected by companies reducing their spending: an estimated 5000 less visitors are expected and, according to the paper, they are “tightening their belts: less meals, less parties, and less days in the city”. This will certainly save many of the show’s visitors from reaching for coffee and aspirin after an evening of fiesta. It is also an indicator of the impact of the economy on the sector, and of its prominence in the talks to be had over the next 4 days.
Indeed, as 6 industry analysts are asked for their insights for the congress daily magazine, the economy features prominently in their choice of hot topics, albeit with varying degrees of pessimism. While Will Croft from Wireless Intelligence believes “we’ll still see the mobile sector outperform many others over the course of the year”, Dean Bubley from Disruptive Analysis is far more cautious: “there is far too much unwarranted optimism at the moment. The economy will affect consumers’ price consciousness (…), operators will look closely at suppliers’ financial situation and be wary of committing to start-ups with fragile funding”.
Looking at events in the past week, it’s no surprise that industry commentators are looking at the economic situation in the telecoms sector. A number of operators have announced a fall in revenues (Singapore’s Starhub, Elisa in Finland among others), while major names on the equipment side are still making news with job cuts and profit warnings, not to mention Nortel’s Chapter 11 move causing huge controversy with its supplier Alvarion over a considerable unpaid bill.
However, the picture isn’t all bleak. In emerging markets, some operators have announced new investments in their networks, going against the general cost-cutting mood. Tele2, the Swedish telco, announced last week it was to spend $131.8 million in 2009 for its service expansion plans in Russia. Indian-based Tata Communications announced $430 million in investments across Asia-Pacific, to build a new data centre in Singapore and complete the Intra Asia cable that runs from Japan to South East Asia. In Africa, submarine cable projects are still going strong, both in East Africa and to connect West Africa to Europe. In many of these markets, the main focus is to secure reliable international connectivity with sufficient capacity to deliver broadband access to end-users and profitable corporate consumers.
One of the first sessions in today’s debates in Barcelona was about access to broadband in emerging markets. The question of international connectivity was unfortunately not the main focus, but the mood was positive about the demand for broadband services in Africa, Asia and Latin America. The panel included speakers from India’ Idea Cellular, Malaysia’s Maxis, and Sri Lanka’s Dialog, all forecasting great opportunities for mobile broadband over 3G and HSPA.
So is it safe to say that emerging markets will be immune from the economic downturn thanks to this growing demand for broadband services? The jury’s out. While today's panellists seemed to think there will be strong enough market demand to support their revenues, their positive stance may have been influenced by the possible presence in the audience of members of the press and possibly their shareholders. On the other hand, I was recently reminded by an operator based in sub-Saharan Africa that in very low income markets, telecoms spending will be seen as even more of a luxury in times when households struggle to purchase even basics like food. Another factor affecting operators in this time of financial crisis is the growing difficulty in securing funding for operators’ expansion plans. The companies who recently announced their investment plans had probably planned them early enough to avoid the consequences of the banking crisis. Only last week,it was reported that Econet Wireless in Kenya had experienced great difficulty in confirming a loan that was necessary for the launch of its new network (branded Yu)
It will certainly be interesting to follow the evolution of operators’ strategies for emerging markets as the global economic situation becomes clearer as the year advances. I look forward to hearing discussions in future events such as East Africa Com and Eurasia Com in April, India & South Asia Com in May, or West & Central Africa Com in June.
The opening of annual telecoms gathering Mobile World Congress in Barcelona today gets a mention in Spanish daily El Pais, only to say that the event’s attendance is affected by companies reducing their spending: an estimated 5000 less visitors are expected and, according to the paper, they are “tightening their belts: less meals, less parties, and less days in the city”. This will certainly save many of the show’s visitors from reaching for coffee and aspirin after an evening of fiesta. It is also an indicator of the impact of the economy on the sector, and of its prominence in the talks to be had over the next 4 days.
Indeed, as 6 industry analysts are asked for their insights for the congress daily magazine, the economy features prominently in their choice of hot topics, albeit with varying degrees of pessimism. While Will Croft from Wireless Intelligence believes “we’ll still see the mobile sector outperform many others over the course of the year”, Dean Bubley from Disruptive Analysis is far more cautious: “there is far too much unwarranted optimism at the moment. The economy will affect consumers’ price consciousness (…), operators will look closely at suppliers’ financial situation and be wary of committing to start-ups with fragile funding”.
Looking at events in the past week, it’s no surprise that industry commentators are looking at the economic situation in the telecoms sector. A number of operators have announced a fall in revenues (Singapore’s Starhub, Elisa in Finland among others), while major names on the equipment side are still making news with job cuts and profit warnings, not to mention Nortel’s Chapter 11 move causing huge controversy with its supplier Alvarion over a considerable unpaid bill.
However, the picture isn’t all bleak. In emerging markets, some operators have announced new investments in their networks, going against the general cost-cutting mood. Tele2, the Swedish telco, announced last week it was to spend $131.8 million in 2009 for its service expansion plans in Russia. Indian-based Tata Communications announced $430 million in investments across Asia-Pacific, to build a new data centre in Singapore and complete the Intra Asia cable that runs from Japan to South East Asia. In Africa, submarine cable projects are still going strong, both in East Africa and to connect West Africa to Europe. In many of these markets, the main focus is to secure reliable international connectivity with sufficient capacity to deliver broadband access to end-users and profitable corporate consumers.
One of the first sessions in today’s debates in Barcelona was about access to broadband in emerging markets. The question of international connectivity was unfortunately not the main focus, but the mood was positive about the demand for broadband services in Africa, Asia and Latin America. The panel included speakers from India’ Idea Cellular, Malaysia’s Maxis, and Sri Lanka’s Dialog, all forecasting great opportunities for mobile broadband over 3G and HSPA.
So is it safe to say that emerging markets will be immune from the economic downturn thanks to this growing demand for broadband services? The jury’s out. While today's panellists seemed to think there will be strong enough market demand to support their revenues, their positive stance may have been influenced by the possible presence in the audience of members of the press and possibly their shareholders. On the other hand, I was recently reminded by an operator based in sub-Saharan Africa that in very low income markets, telecoms spending will be seen as even more of a luxury in times when households struggle to purchase even basics like food. Another factor affecting operators in this time of financial crisis is the growing difficulty in securing funding for operators’ expansion plans. The companies who recently announced their investment plans had probably planned them early enough to avoid the consequences of the banking crisis. Only last week,it was reported that Econet Wireless in Kenya had experienced great difficulty in confirming a loan that was necessary for the launch of its new network (branded Yu)
It will certainly be interesting to follow the evolution of operators’ strategies for emerging markets as the global economic situation becomes clearer as the year advances. I look forward to hearing discussions in future events such as East Africa Com and Eurasia Com in April, India & South Asia Com in May, or West & Central Africa Com in June.
4 Feb 2009
Change at the head of Kenya's new mobile operator
I guess it was always going to be difficult finding a good way of taking over a blog, but I’ve been lucky with the news this week: as my colleague Joe Willcox handed this blog over to me, another figure in emerging telecoms market moved, someone I’ve crossed path with a couple of times while looking at the developments in Africa’s telecoms markets.
Michael Foley announced his departure this week from Essar Telecommunications in Kenya (formerly known as 3rd GSM licensee Econet Wireless), where he was CEO, citing personal reasons. In this position, Foley led the launch of new brand Yu, due to start services to consumers in the first week on April this year, coinciding with Informa Telecoms’ East Africa Com event in Nairobi.
Foley’s time at Essar/Yu has undoubtedly been a busy one. His job was to launch a new operator in one of Africa’s top 10 telecoms markets, applying a recipe that had until now flourished in India: building a low-cost, essentially outsourced operation and competing on price with a simple offering and a strong brand. A country-wide network was built in a record 6 months, and a new brand unveiled in November 2008 by Foley in Cape Town. He was in South Africa to give a refreshing keynote presentation at AfricaCom, in front of a captive audience including Michael Joseph, CEO of Kenya’s first operator Safaricom. A few months later, as services are set to launch in just a few weeks, he is replaced by his colleague Srinivasa Iyengar.
Foley’s tenure at Essar/Yu seems short: Kenyan newspaper The Standard notes that his resignation is happening “hardly a year since joining the firm”. Indeed, he seems to enjoy moving around. I first met him in 2006 in Tunis, where he was giving a presentation at GSM>3G North Africa (a congress now re-named North Africa Com and moved to Cairo) in his role as Chief Transformation Officer at incumbent Tunisie Telecom, a role he had taken as part of his position as Chief Commercial Officer at Emirates International Telecommunications. He then moved on to Celtel Nigeria as Chief Commercial Officer, then Celtel Tanzania as Managing Director, before joining Essar.
Reading through his profile, it seems he enjoys taking a challenge by looking after companies in times of change, as well as start-up operations and new business creation. Following his move from Kenya, I guess we could see him in one of the up-and-coming markets in Sub-Saharan Africa. A number of markets are due to see a new operator launch, or an old one go through a transformation following an acquisition. A number of them are in French-speaking countries, which is handy as Canadian-born Foley is francophone too. So the bets are open as to where we’ll see him next.
In the meantime, we’ll be looking closely at what happens to Kenya’s telecoms. Market leader Safaricom is confident in its position, thanks to a strong brand, good coverage and services that are increasing customer loyalty (mobile payment M-Pesa in particular); when asked recently where he saw his market share in 5 years time, CEO Michael Joseph said he was expecting to retain over 60%. Zain (rebranded from Celtel last year) is in a strong position as its main contender. A newcomer on the mobile market, Telkom is banking on triple play services to make its place in the market: in addition to its fixed services, the operator bought by France Telecom-Orange is now offering mobile services. With the launch of Yu, the market is likely to see a war price that will undoubtedly please the consumers, but may be difficult to sustain for the last two entrants.
Michael Foley announced his departure this week from Essar Telecommunications in Kenya (formerly known as 3rd GSM licensee Econet Wireless), where he was CEO, citing personal reasons. In this position, Foley led the launch of new brand Yu, due to start services to consumers in the first week on April this year, coinciding with Informa Telecoms’ East Africa Com event in Nairobi.
Foley’s time at Essar/Yu has undoubtedly been a busy one. His job was to launch a new operator in one of Africa’s top 10 telecoms markets, applying a recipe that had until now flourished in India: building a low-cost, essentially outsourced operation and competing on price with a simple offering and a strong brand. A country-wide network was built in a record 6 months, and a new brand unveiled in November 2008 by Foley in Cape Town. He was in South Africa to give a refreshing keynote presentation at AfricaCom, in front of a captive audience including Michael Joseph, CEO of Kenya’s first operator Safaricom. A few months later, as services are set to launch in just a few weeks, he is replaced by his colleague Srinivasa Iyengar.
Foley’s tenure at Essar/Yu seems short: Kenyan newspaper The Standard notes that his resignation is happening “hardly a year since joining the firm”. Indeed, he seems to enjoy moving around. I first met him in 2006 in Tunis, where he was giving a presentation at GSM>3G North Africa (a congress now re-named North Africa Com and moved to Cairo) in his role as Chief Transformation Officer at incumbent Tunisie Telecom, a role he had taken as part of his position as Chief Commercial Officer at Emirates International Telecommunications. He then moved on to Celtel Nigeria as Chief Commercial Officer, then Celtel Tanzania as Managing Director, before joining Essar.
Reading through his profile, it seems he enjoys taking a challenge by looking after companies in times of change, as well as start-up operations and new business creation. Following his move from Kenya, I guess we could see him in one of the up-and-coming markets in Sub-Saharan Africa. A number of markets are due to see a new operator launch, or an old one go through a transformation following an acquisition. A number of them are in French-speaking countries, which is handy as Canadian-born Foley is francophone too. So the bets are open as to where we’ll see him next.
In the meantime, we’ll be looking closely at what happens to Kenya’s telecoms. Market leader Safaricom is confident in its position, thanks to a strong brand, good coverage and services that are increasing customer loyalty (mobile payment M-Pesa in particular); when asked recently where he saw his market share in 5 years time, CEO Michael Joseph said he was expecting to retain over 60%. Zain (rebranded from Celtel last year) is in a strong position as its main contender. A newcomer on the mobile market, Telkom is banking on triple play services to make its place in the market: in addition to its fixed services, the operator bought by France Telecom-Orange is now offering mobile services. With the launch of Yu, the market is likely to see a war price that will undoubtedly please the consumers, but may be difficult to sustain for the last two entrants.
Blogger signing off... and handing over
Maintaining this blog has been a real pleasure since I decided to enter the blogosphere back in August 2008. A number of interesting comments, proposals and insights have arrived in response to things I've written here. However, it is now time for me to hand over the Com World Series blog to my colleague Ms. Julie Rey. For some time, Julie and I have responsible for specific geographical territories covered by the Informa Telecoms & Media Com World Series. My part in this has been rewarding and educational - but is now coming to a close.
From next month I will be pursuing a new opportunity. I will continue to work in the telecoms space and continue to be focused mainly on developments in emerging markets. In my new role, I hope that it will be possible to continue offering my thoughts on telecoms sector news. I will certainly continue blogging for the time being. My new blog can be found at:
http://developing-telecoms.blogspot.com
Thanks, Joe Willcox
From next month I will be pursuing a new opportunity. I will continue to work in the telecoms space and continue to be focused mainly on developments in emerging markets. In my new role, I hope that it will be possible to continue offering my thoughts on telecoms sector news. I will certainly continue blogging for the time being. My new blog can be found at:
http://developing-telecoms.blogspot.com
Thanks, Joe Willcox
31 Jan 2009
Nigeria: new entrant sees big addressable market in under-served rural regions
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.
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.
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.
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