Tuesday, March 22, 2011

African domain operators take on DCA’s Bekele

AfTLD, an organization of African country-code top-level domain operators, has announced its intention to apply to ICANN for the .africa TLD.
The initiative appears to be different to and competitive with the best-known .africa applicant to date, Sophia Bekele’s DotConnectAfrica. Considering that Bekele has been pushing for the dotafrica inititative – having received endorsements from the African Union, the Economic Commission for Africa (ECA) and other, the fact that AfTLD has jumped in this late in the process will muddy the waters.
AfTLD has said that it plans to seek a mandate for .africa from the Commission of the African Union. It also expects to discuss forming a company to manage the bid at a meeting in Ghana next month.
Vika Mpisane, AfTLD’s chairman and general manager of South Africa’s .za ccTLD, said in a press release:
“We are not just interested in .africa only, but we want to also take on .afrique, which is the French version of .africa.
“It’s only natural for us to do this because at least 50% of Africa speaks French. We also intend to have an internationalised version of .africa as well because we have significant Arabic Africa population, but we will start definitely with .africa first.”
Considering that some of the TLDs have not done a good job at running country-specific names and governments are looking to take back domains like .ug from the private interests that manage them afte realizing they are critical resources, one wonders which direction this will drive the .africa quest.
The release said AfTLD shortly intends to announce a “leading registry services provider” to run its back-end, but indicated that in future it would expect to run the registry from within Africa.
The current version of ICANN’s new TLDs Applicant Guidebook sets the bar for a .africa bid very high, in practice possibly requiring near-universal governmental support.
A bidder for this kind of protected geographic term would require letters of support from 60% of the nations concerned. For Africa, as the Guidebook defines it, that’s about 34 countries.
However, crucially, if more than one African government were to object in writing to any given .africa application, that bid could be killed off.
AfTLD has 24 ccTLD registry members. They’re not all government-run TLDs, so that doesn’t necessarily follow that it already has 24 countries on board.
A key question is whether endorsement of a bid by the African Union could be interpreted as blanket approval from all of its 53 member governments. I don’t think that’s a given, under the letter of the Guidebook.
But if it is, DotConnectAfrica may already be there. It has a signed letter from the African Union Commission chairman Jean Ping, dated August 2009, that endorses its specific bid.

Friday, March 18, 2011

Uganda to call time on mobile phone price wars

A precedent in the very competitive and fast growing African telecommunications sector could soon be set should the Ugandan Communications Commission (UCC) move ahead with guidelines for minimum phone call tariffs.
Uganda's rapidly expanding telecommunication sector has been hit by a raging price war going back to 2010. Competition among operators for new phone subscribers is digging into profit margins and reports have indicated this will also affect government taxes.
If the regulatory move goes through, UCC will be stepping in unchartered waters as it could be the first regulator in the East African region and indeed the entire continent to practically regulate a sector that is today characterised by low tariffs. The UCC has issued a notice seeking public opinion on the regulation of telecoms call rates.
The move is in response to an ongoing price war in the telecom sector, which started in the second half of 2010 -- sparked off by Warid Telecom when it introduced near-free calls, and has stretched into 2011.
According to UCC, the new guidelines, expected to come into effect at the end of the month are aimed at curbing anticompetitive tendencies, encouraging new investments, enhancing tariff transparency and protecting consumers.
"By the end of this month we hope to come out with a position on the call tariffs," Isaac Kalembe, a public relations officer with UCC said. "Consultations are still going on with the operators and then we will invite users to a stakeholders' meeting."
The price wars have mainly been instigated by new players such as Warid Telecom, which is owned by the Essar Group of India.
For example, Warid has been able to grow its subscriber base to 2 million in a space of three years, having launched operations in January 2008.
Put together, telecom operators have a subscriber base of 8 million users according to figures by UCC at the end of June 2010.
Warid has racked up those user numbers after introducing offers that have allowed users near-free calls all day within its network on top of other exciting offers over the last 12 months.
Airtel (formerly Zain) followed Warid when they launched similar offers to increase their numbers as well as keep its subscribers from jumping to the cheaper options.
The price wars have raised concern among the bigger players that have been around longer, like MTN Uganda and Uganda Telecom, which were dragged into the fight for fear of losing subscribers, forcing them to slash their prices too.
Twelve months ago, the Uganda telecom sector average mobile call rate was Ush11 (0.004 US Cents) per second, which fell to Ush5 (0.002 US Cents) and then to Ush3 (0.001 US Cents) per second.
Orange Uganda, Airtel and Warid had promised to keep their rates at three shillings per second but should UCC put the price ceiling above these prices, they will have no alternative but to change them.
Warid Telecom recently lowered the rate even further down with its offer of Ush1per second from 6:00am to 6:00pm while MTN has reduced calls within its network by a shilling up from three shillings per second.
For the short message service (SMS), Airtel is offering unlimited short messages to its subscribers for Ush200 (0.086 US Cents) per day and Ush50 (0.021) to other networks.
These rates are a far cry to the mid 1990s when the mobile phone was introduced in Uganda by Celtel (now Airtel). As a monopoly at the time, Celtel charged rates in US Dollars and handsets were costing more than Ush1 million ($434).
That monopoly was later turned into a duopoly with the entry of MTN Uganda in 1998. The duopoly led to a gradual decrease in prices. When Uganda Telecom entered the market in 2001, an oligopolist market was created when the three players operated in the market and charged users high tariffs.
With the entry of WARID and Smile Telecom in the Uganda telecom sector in 2008, and Orange in 2009, a perfect competitive market situation was created.
While the reduced telecom prices resulted in a reduction in general price inflation because of the importance of communication services, operators have suffered a fall in revenue as users who owned a single mobile phone were forced to hold two and spread their expenditure on telecom services among the operators.
Phone users today spread their expenditure on phone calls to avoid the high tariffs that are charged on calls across networks they are not subscribed to.
"When inflation declined significantly in October 2010, it was because of airtime. When you make a shift or a jump, you reduce inflation because the income that would have been spent on air time is saved," a report by the Uganda Bureau of Statistics then said.
A price war similar to the one in Uganda has been raging in the Kenyan market, where Airtel has been out to erode Safaricom's dominance of voice revenues.
However, Kenyan regulators are yet to propose anything resembling minimum tariffs.
But with the telecoms market in Uganda headed for price controls, the rest of the region will be looking to see whether the regulator's hand will come into play to improve the players' margins.

Friday, March 11, 2011

MTN bring Android-powered Smartphone to Uganda

MTN Uganda has launched onto the Uganda market an Android-powered Smartphone that retails at Ush340,000. Manufactured by Chinese technology giant, Huawei Technologies, the phone, the phone looks like a mini-iPhone. I did a short interview with the MTN Uganda CEO, Mr. Themba Khumalo and below are excerpts.

Q: First of all, tell us about this growing relationship between MTN Uganda and Huawei Technologies?
A: To maintain our leading position in the telecommunications sector we have over the last fifteen years worked with the best service providers available. We are always looking for ways of serving our customers better, and we are continually involved in developing innovative services which enhance the way our people operate and live. All this is achieved through smart partnership with vendors like Huawei Technologies amongst. Huawei is today our second main vendor with Ericsson in the lead. Our partnering with global vendors such as such as Huawei guarantees to Ugandans that the services and products they receive from MTN Uganda are of world class quality.
Q: Why is MTN bringing to the market an Android Smartphone when there are smart phones based on other platforms already on the market?
A: First of all, Android Technology is important for Africa, and indeed Uganda, because it allows our own software developers to come up with locally grown applications and programs that are locally grown and can be used by more of the local populace. Other platforms are also going in this direction but Google has done a lot of work in getting local software developers to build applications for Android phones. We know there are already a large number of brilliant Ugandans working on mobile phone applications and programs. Introducing Android technology gives them the opportunity to place themselves on the global map of software developers.
But development aside, when we have more smart phones such as the IDEOS available in Uganda running Ugandan built applications; more and more people in Uganda will be enabled to use our high speed 3G+ network to access information and internet-based services. This is another reason we partnered with Huawei, the entry price of the IDEOS is very affordable to many ordinary Ugandans at less than UShs350,000.
Q: Is this an exclusively Uganda market product or all of MTN's Africa operations will launch the same at some stage? If that is the case, what is MTN’s thinking behind launching these Android phones across your African operations?
A: The IDEOS offer we have launched here is specifically for the Ugandan market, I do believe the business case is there and most of Africa operations are broadening their smart phone portfolios to stimulate data usage growth. Without commenting much on the broader strategy it suffices to state data is a key component of the long term strategy in MTN. We know very well the power of communications in emerging markets and the catalytic role it has in economic development. Our company is continuously seeking opportunities to support sustainable revenue growth.
Q: Smartphones are known to be expensive because of the technology on which they are based, how much will one of those phones go for?
Through the partnership with Huawei Technologies, we have managed to keep the cost of the phone affordable. It is currently on the market retailing at about Ushs344,500 only - which is less than US$200. This offer is not for the phone alone, it is bundled together with monthly internet access packages. This is certainly affordable, considering that grey/imitation mobile phone are retailing for around the same amount of money but do not provide the benefit of quality after sales support.
Q: You say this particular phone will enable Ugandans take advantage of MTN’s 3G+ network, what will be made possible from as far as MTN is concerned as well as the user?
MTN 3G+ is not any mere Internet solution – it is a well-rounded data communications solution that will enable our customers to access fast, affordable and accessible data services. The MTN high speed 3G+ network allows users to make full use of the internet - with most ordinary data networks in Uganda you cannot use popular sites and services such as content streaming services (which include YouTube) and the websites hosted by most news organisations. You will also find it hard to conduct content uploads, which limits our capacity as Ugandans to share locally generated content with the rest of the world. In India and China, for example, business outsourcing is thriving because their communication networks can handle the upload and download of vast amounts of data - and that is a whole new industry that has bolstered their economies.
We are now living in the information age, and the control of information has been decentralised. Now, anyone with access to the main communication network - the internet - can inform, educate and influence decisions. This is why the 3G+ network and devices that are compatible with 3G are so important - they allow more and more mobile Ugandans to learn more, but more importantly, share more.
Q: What advise do you have for software developers considering that with Android, localized apps can be created and utilised through this platform?
This is the time to get your name out there. Develop more localised applications so that they are put onto the Android marketplace for download. We are going to explore partnerships with learning centres such as universities to support more localised software development. Everyone holding an IDEOS Android in Uganda is a potential consumer of the applications you develop.