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CONTENTS Issue 6
30 Calendar
04 Guest Editorial
Arthur Goldstuck, Managing Director, World Wide Worx.
Upcoming events, shows and conferences which you can’t afford to miss.
06 News
The latest local and global telecoms news.
18 Gadgets
Want the next big thing in portable devices? Our gadget review is here to help you choose.
38 Statistics Africa Telecoms presents statistics and data relating to 3G in Africa.
p.24
Alistair McGrath Thought Leadership
In an exclusive interview with Africa Telecoms, Alistair McGrath, Director, Market Development Service Provider for the Africa Levant region at Cisco, shares his thoughts on the market and what operators are doing to keep up with demand for mobile data, specifically 3G.
p.32 3G Begins to Stir in Africa
With 2G growth slowing down in Africa, 3G network rollout is starting to pick up pace in many urban areas across the continent
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p.68
Virtual Subscribers
What lead Movius to discover the next big thing in communication... a desire to connect the millions of unconnected people out there, bridging the digital divide and making everyone reachable.
42 Connection the Next Billion Where is Africa in the great data race and will cellular connectivity be the way the continent bridges the digital divide?
50 3G Technology A brief overview of where we've been and where we're going.
54 Q&A
64 IP-Peering
56 RascomStar QAF Mission
72 Last Word
With Jaime Dickinson, President, NewCom International.
Mission: to provide the African continent with satellite telecommunication services for Pan-African connectivity.
Partnership will help operators in emerging markets.
Be sure not to leave the latest, yet-to-be-seen smartphone prototype on the bar counter next time you're out drinking.
AFRICA TELECOMS Executive Editor Mohammed Khan mkhan@3ipublishing.co.za Managing Editor Bradley Shaw bshaw@3ipublishing.co.za
Design Team: Alexander Flemming xflemming@3ipublishing.co.za Hayley Davis hdavis@3ipublishing.co.za Sub-Editor: Niki Sampson
Sales Director Sarah Theron stheron@3ipublishing.co.za
Publishing Consultants Schreiber Media
Printing Tandym Press
Contributors: Lesley Stones, Brett Haggard, Johann Barnard, Bradley Shaw, Andy Minaar, Mohammed Khan
Africa Telecoms and Africa Telecoms Online are published by 3i Publishing. Unit 9 & 10, Planet Art 2, 32 Jamieson Street, Cape Town 8001 T: +27 21 426 5590 E: info@3ipublishing.co.za www.3ipublishing.co.za www.africatelecomsonline.com BPA Worldwide Business Publication Audit Membership Applied for – October 2009.
Issue 6 2010 AFRICA TELECOMS 3
Guest Editorial
Arthur Goldstuck MD, World Wide Worx
Serving up the broadband alphabet soup If you want to put your finger on the pulse of the digital divide, look no further than television. No, not the migration to digital transmission, which is occupying broadcast authorities across Africa. We’re talking about TV content via broadband connectivity. While Africa wrestles with getting networks in place, and every new roll-out of a local 3G network is big news, in the developed world that is old hat. The latest announcement from Hutchison 3G UK is a case in point: a deal to provide access to episodes of American channel HBO’s television shows to British viewers through Hutchison’s subscription video-ondemand service. Not that HBO is a big deal, or that Africa should be rushing for on-demand subscription content. It merely highlights what is made possible once 3G networks are mature. And this, in turn highlights how far back we are kept when we hold back on communications technology. In fact, just as 3G begins to spread the benefits and challenges of wireless broadband across Africa, the next generation of connectivity is joining the alphabet soup. 4G is not an official standard, but is broadly accepted as including WiMAX (fixed and mobile broadband), LTE (Long Term Evolution, a highspeed mobile broadband) and UMB (for Ultra Mobile Broadband). The standards are approved, equipment is available, but both business strategies and government regulatory sloth holds it back. World Wide Worx research in South Africa has shown that mobile broadband grew four times as fast as fixed line broadband last year. And there is a single reason: South Africa boasts one single supplier of fixed line broadband, while it has six suppliers of mobile broadband. The more competition, the greater the supply, the greater the competitiveness, and the greater the take-up. More important, the greater the regulatory openness to competition, the healthier the market. A new Africa-wide research project from World Wide Worx reveals great expectations for prices of connectivity to come down and competition to increase as new undersea cables begin to connect the continent. These expectations are beginning to be
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met in some countries, notably Kenya, Morocco and Mauritius, where the emphasis is not only on getting the country connected, but also on doing so in a way that will reach as many citizens as possible and, in the case of Morocco, using the best technology possible. The missing ingredients continue to be the next generation of customer access equipment for those who are connected, and affordable availability of access for those who are not. But, once Africa is getting connected, there is no excuse for regulators to keep that connectivity to old alphabets, or for networks to do so using technology that will date faster than you can say “1-2-3-4G please”. AT
Where will you be tomorrow? Great companies never stop moving forward. Every day your company is out there looking for answers to the age old question, “What next?” A growing number of companies are discovering the power of advanced wireless to increase their ROI, lower operating expenses, increase customer satisfaction—and more. Qualcomm is a world leader in providing mobile communications, computing and network services that are transforming today’s workplace. As a leading technology innovator, we’re committed to continuous evolution, helping you achieve your business goals with solutions that are always evolving to meet your changing needs. From secure and reliable managed network services and backend host applications to asset tracking and machine-to-machine communications solutions, Qualcomm has answers for you. We can help you work smarter, move faster and reach further. We see success in your future. In fact, we’re passionate about it. We make mobile technology that works for business.
We are wireless futurists. To learn more, visit www.qualcomm.com
News
New Cape Town social media software launched According to the MEMEburn blog, Jamiix, launching internationally in June 2010, is a brand new social-media aggregator that was developed in the Cape Flats of Cape Town. According to the company, JamiiX Social Exchange is a Web based tool providing organizations, businesses, governments and individuals a platform to manage multiple conversations from different Social Media, Text Messaging and a variety of Instant Messaging platforms, on a single interface. It is reported that the platform has taken two years to develop, and is looking to officially launch in South Africa, Malaysia and the UK. They have partnered with Mxit, ISLabs MoVigo Technologies (Pty) Ltd, and The South African Finland Partnership (SAFIPA). The company takes its name from “Jamii”, the Swahili word for social or community and the “X” denotes exchange. CEO Marlon Parker was described as saying that the product was created by “addressing local needs and social ills through the use of innovation that was developed by the people for the people.”
The future for ISPs With numerous ISPs recently launching uncapped broadband accounts, and adding fuel to an already smouldering fire, otherwise known as the bandwidth price war. South African Internet Service Providers (ISPs) are bidding lower prices against one another, either in an attempt to match or even beat their competitors. Smaller ISPs are cutting their prices to below cost in order to compete with their larger counterparts. But what are the implications on the ISPs? Lower costs for consumers ultimately leads to a decrease in profit margins for ISPs. Should a particular ISP choose not to offer uncapped broadband packages at lower costs to the consumer, they’re not keeping abreast with the changes in the industry. If they do, their profit margins will start to minimise. With the pressure mounting, ISPs who traditionally focus only on data services may need to investigate new streams of revenue by broadening their services and attracting new market segments. Managing Director of RSAWEB, Rob Gilmour, agrees that ISPs need to re-evaluate their business models in accordance with the transforming industry. "Broadband is becoming increasingly commoditised as bandwidth becomes cheaper and uncapped packages become the norm. This will force
ISPs to differentiate themselves with regards to service and value added products." New developments in hardware devices make it possible for ISPs to invest in several alternatives beyond their regular broadband connectivity. A Multi-Service Business Gateway (MSBG) is a viable option for many ISPs who target small and medium-sized enterprises. MSBG combines multiple network voice and data communication functions into a single device, giving the ISP the ability to manage and
control all aspects of a client’s communications needs. This is also a feasible option for SMEs who have limited technical and financial resources to procure, implement and manage new technologies. Adrian Bush, Managing Director of Even Flow Distribution a VoIP hardware distributor notes, “The latest MSBG appliance available on the market operates on both wireless and wire line networks. “ISPs benefit in offering MSBG appliances to SMEs as they will be the single point-of-contact for all voice, data and internet services in the SMEs’ office; they will increase their revenues through incoming and outgoing calls made by office staff; and with a MSBG appliance such as the Connecto, ISPs will provide SMEs with simplified, remote management and support,” added Bush. “For SMEs, a complete communications solution provides advanced IP technology with mobility, security and reliability, and by implementing IP technology, communication costs will be minimised.” So, where to next for ISPs? With industry changes, come opportunities. SMEs are looking for feasible, affordable, and convenient service providers. Those ISPs who can offer more services, with reliable management and support, with a saving in costs to the SME, will benefit from this evolving industry.
>> There were 4.12 billion GSM, WCDMA-HSPA subscriptions worldwide in Quarter 4 2009, which is approaching a 90% worldwide subscription market share. >>
6 AFRICA TELECOMS Issue 6 2010
Zero OPEX solar powered GSM for rural networks
Find out how VNL’s solar powered voice and data telecom equipment is set to change the lives of billions around the world who do not have a phone. Half the world’s population lives in rural areas not covered by a mobile network. An estimated 1.6 billion people live without electricity. An additional 1 billion people live in areas with unreliable access to power. The telecoms industry has known for a long time that traditional GSM equipment was not suitable for rural areas in Africa, India, Latin America and parts of Asia. For years, they have looked for the answer. VNL has finally found a way: its environmentally friendly, multi-awardwinning zero OPEX solar powered GSM system, that has been specifically designed to serve remote and rural areas where ARPUs are less than $2 a month. Its low-cost solar powered base stations can be set up in a few hours by two unskilled people living in villages. The bottom line: Operators now have a way to provide affordable, sustainable mobile services to rural communities - and still turn a profit.
www.vnl.in Technology Pioneers
2010
News “Our Mobile Gateway product is perfectly suited to ensure that these services can be offered across the entire spectrum of handsets including low-cost, entry-level devices.” – Carsten Brinkschulte, CEO of Synchronica,
Synchronica plc: seventh contract win in Africa Synchronica plc, the AIM listed mobile email, instant messaging and data synchronisation provider, announced that it has received a purchase order for a 50,000 user license including hosting for a year, from a West-African mobile phone service provider for its award winning product Mobile Gateway. The West-African provider is offering mobile services in collaboration with a 20 million subscriber mobile operator to a major religious community in the region with over 2 million members. Synchronica’s Mobile Gateway will be offered to the community as part of a subscription providing push mail and mobile synchronisation services that can be used to exchange messages on religious topics. Carsten Brinkschulte, CEO of Synchronica, said, “Our seventh client win in this region re-emphasises that Africa is a key emerging market for next-generation mobile messaging data services. Operators are looking for new initiatives to retain customers and to drive growth in this market and they have seen that our products can be used to connect religious communities and enable one-to-many and one-to-one communication about religious news, teachings and other related topics.
Google backtracks on Nexus One strategy Google has performed a u-turn on its strategy to sell its own-brand Android smartphone, the Nexus One. In a statement yesterday, the company announced that Vodafone will from this Friday start selling the device in the UK via its stores, online and over the phone. “Soon after,” Google said, it will be available via SFR in France, as well as via Vodafone’s other subsidiaries in Germany, Italy, the Netherlands and Spain. More operator launches look to be on the horizon, as Google noted that Vodafone is the “first European partner to distribute the Nexus One.” The move is a direct contrast to Google’s original retail model for the device when it launched the high-profile phone in January. Google surprised many industry watchers with plans to only sell the product via its own online store. Such a move broke heavily with traditional mobile industry business practices, bypassing the mobile operator retail stores that serve as a key distribution channel for mobile phones. Meanwhile, US operator Verizon Wireless has been dropped as a partner for the device; despite being touted as an initial partner at launch, Google is now advising customers to instead “pre-order the Droid
Incredible by HTC, a powerful new Android phone and a cousin of the Nexus One that is similarly feature-packed” and available in stores on 29 April. The Nexus One remains available to T-Mobile USA customers. Reports have been quick to cite analysts as stating that the actions represent a setback for Google's plans to carve a role for itself in the mobile business and to redefine industry practices in the process. The move is also likely to fuel speculation that Google has been forced to change its strategy due to less-thanstellar demand for the Nexus One; analysts believe Google sold about 150,000 Nexus One devices in the first quarter. By contrast, Apple sold 1 million iPhones in the first 74 days after releasing the gadget in 2007. However, earlier this month Google’s CFO Patrick Pichette said Nexus One is “a profitable business for us”, whilst Jeff Huber, SVP for engineering, added that the company is “very happy with the device uptake and the kind of impact that’s had across the industry in terms of raising the bar for what devices can do.” Huber added that Google’s Android system is powering 34 devices and that more than 60,000 Android devices are sold and activated each day. Android also had 38,000 apps in the previous quarter, up 78 percent from the last quarter.
>> 2,349 HSPA devices have been launched by over 230 suppliers. 610 of these devices have been launched since October 2009. >>
8 AFRICA TELECOMS Issue 6 2010
News iPad international pre-orders
First Nokia Symbian^3 Nokia has announced the launch of its latest flagship smartphone, the N8 (pictured), which will be the first ever device based on the new Symbian version 3 (S^3) platform. Nokia - the world’s largest handset vendor - announced that the new device will be available in selected markets in the third quarter of the year, slightly later than planned according to earlier reports. It is priced at EUR370 before applicable taxes or subsidies. Among the highlight features on the N8 is a 12 megapixel camera with Carl Zeiss optics, Xenon flash and a large sensor that claims to rival those found in compact digital cameras. It also offers the ability to make and edit HD-quality videos and is compatible with home theatre systems. Web TV services and social networking features are also prominent, including the ability to have live feeds from Facebook and Twitter in a single app directly on the home screen. Nokia’s free turn-by-turn navigation service – Ovi Maps – is also included. Given Nokia's recent troubles with its smartphone portfolio, the N8 will be carefully watched. In a separate statement, Symbian described the launch as marking its first major platform release following its transition to a fully open source model in February this year. “S^3 enables an unparalleled set of options for device creators and app developers to extend the usefulness of Symbian products and services,” said Lee Williams, executive director at Symbian. The N8 is Nokia's first device to be integrated with Qt, a software development environment that aims to make it possible to build applications once and deploy across Symbian and other software platforms. The vendor has made a beta version of the Qt SDK available for developers.
Apple’s iPad is available for online pre-order in nine international countries, including Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the UK. Both the WiFi-only and 3G versions will be available from 28 May. Apple has also confirmed that its iBooks e-books store will launch in these countries on 28 May too. In addition, Apple plans to release the high-profile tablet computer in Austria, Belgium, Hong Kong, Ireland, Luxembourg, Mexico, Netherlands, New Zealand and Singapore in July. Apple has confirmed UK pricing for the device (supported by Orange, O2 and Vodafone). The Wi-Fi only iPad will cost £429 (US$635) for the 16GB version, £499 for the 32GB version, and £599 for the 64GB version. Meanwhile, the 3G-enabled models will cost £529, £599 and £699 (US$1,034) respectively. These prices are significantly more expensive than Apple is offering the
device for in its home US market. The cheapest iPad model in the US (16GB, WiFi-only) retails at US$499 whilst the most expensive model (3G, 64GB) is US$829. Meanwhile the iPad can be pre-ordered in Australia (in partnership with Telstra) from A$629 (US$559) for the base model, up to A$1,049 (US$932). In Japan, iPhone operator SoftBank said it will offer the iPad starting at JPY48,960 (US$535). The international launch of the iPad was originally scheduled for late April, but Apple delayed it by a month due to what it called higher-than-expected US demand. The iPad, a 9.7-inch touchscreen tablet intended primarily for games, Web browsing and digital media of all sorts, went on sale in the US on April 3. The company has already sold more than 1 million iPads and customers have downloaded over 12 million apps from the App Store. Analysts expect the company to sell roughly 5 million of the devices in 2010.
>> The world’s first LTE networks have been launched in Sweden and Norway. The number of operators committed to LTE deployments has grown to 64 in 31 countries. >>
Issue 6 2010
AFRICA TELECOMS 9
News
EASSy construction completed ahead of schedule The construction of WIOCC’s East African Submarine Cable System (EASSy) is complete, marking the achievement of yet another major milestone towards the launch of what will be the largest cable system serving sub-Saharan African and connecting it to the world. Finalising an extremely successful construction programme, the joining of the two segments making up WIOCC’s EASSy cable – the so-called 'final splice’ – took place a few days ahead of schedule. The installation phase of the project, which started in Maputo, Mozambique in December 2009, was completed on board the cable laying vessel Ile de Batz in the Indian Ocean just off the east African coast. Chris Wood, CEO of WIOCC – the largest shareholder in EASSy - said, “Now that this critical stage of the project has been completed successfully and ahead of time, we will start system testing almost immediately. Once this is finalised, we are looking forward to connecting our first customers to the network from July 2010. At WIOCC, we are also working with our shareholders to deliver high-speed, fibre-optic connectivity not just to the EASSy landing stations but deep into the interior of Africa. This will enable us to satisfy the growing customer demand
for end-to-end service and provide improved geographic reach”. “A key difference between EASSy and other sub-Saharan systems is that our system will deliver connectivity to Europe via a direct route through the Red Sea and the Mediterranean Sea”, confirmed WIOCC's CTO Ryan Sher, chairman of EASSy’s Technical Working Group. “EASSy will be the first east coast system to connect directly to Europe, minimising the time taken for traffic from Africa to reach the key internet peering points in Europe and North America, and vice-versa. With the vast majority of international traffic being IP and internet-based, and with most African traffic destined for Europe and the US where the most popular content and applications are located, our ability to deliver content faster gives us and our customers a competitive edge in the market. Other east coast systems use longer routes via the Middle East or India; our optimised routing means that we are able to offer the lowest latency service to our customers.” EASSy’s affordable pricing and open access structure also promise to revolutionise many African markets, bringing flexible, cost-effective international connectivity to fixed line, mobile and data network operators and ISPs throughout
east, central and southern Africa. According to James Wekesa, WIOCC's Chief Commercial Officer, “WIOCC-EASSy offers carriers in Africa affordable high-speed connectivity into other parts of the continent, and direct access to key internet exchange points in Europe and North America. For international carriers, it offers a reliable high-capacity route into parts of Africa that have previously been seen as difficult-toreach locations. In both cases it does so with a degree of commercial flexibility that has until now been completely unattainable. At WIOCC, we are offering connectivity from as little as 2Mbps (Megabits per second) for one month, up to multiple Gbps (Gigabits per second) wavelengths for the lifetime of the system, and thereby levelling the playing field for small, medium and large organisations.” WIOCC-EASSy offers African service providers a competitive edge, international carriers unmatched coverage, and businesses and consumers in the region an improved online experience, at lower cost and delivering high-quality access to global information and international markets.
>> 3G/WCDMA is in commercial service in 135 countries and the leading 3G system globally. 97% of WCDMA operators have commercially launched HSPA. >>
10 AFRICA TELECOMS Issue 6 2010
News Nokia and Microsoft debut alliance app Nokia and Microsoft today unveiled the first application from their alliance announced last August. Microsoft’s messaging client – Microsoft Office Communicator Mobile – will initially be available on Nokia’s ESeries devices running the Symbian platform. Owners of Nokia’s E72 and E52 devices can download the English version today from Nokia’s Ovi store, whilst the companies plan to deliver Communicator Mobile for Nokia preinstalled on select Nokia smartphones in the future and plan to support additional devices, including the recently announced Nokia E5. "Our alliance with Nokia aims to bring the Office productivity experience to the millions of people using Nokia smartphones around the world," said Kirt Debique, general manager at Microsoft, in a statement. "With the arrival of Communicator Mobile for Nokia today, we have a great start to fulfilling our joint vision." Communicator Mobile enables people to see their colleagues' availability, and click to communicate with them using the best method, from IM to email, text to phone call. The names and status of colleagues are embedded directly into the devices' contacts application, enabling people to update their own presence, start and join instant messaging sessions, and begin calls directly from the contact card. "It meets all of the requirements for enterprise: cost effective to implement, secure, familiar and reliable,” claimed Ukko Lappalainen, VP at Nokia. “We have
hundreds of engineers across both companies working on the alliance and this is just the tip of the iceberg,” Kai Oistamo, the head of Nokia’s device division, said in an interview with Bloomberg. He declined to comment specifically on the next products from the companies. A Bloomberg report added that an earlier, Java-based version of the Communicator for Nokia handsets is “really not comparable” in usability and functions to the new version, which is more integrated with the Symbian platform, according to a Nokia spokesperson.
Smartphone sales show strong growth in Q1 The global smartphone market grew by more than 50 percent year-on-year in the first quarter of 2009, according to new data from IDC. Smartphone vendors shipped a total of 54.7 million units in the quarter, up 56.7 percent from the same quarter a year ago. Growth was over twice that seen in the overall mobile devices market, which grew 21.7 percent over the same period. Smartphones accounted for 18.8 percent of all mobile devices shipped in Q1 2010, up slightly from 14.4 percent in Q1 2009. First quarter growth was also higher than the 38 percent growth seen in the fourth quarter, typically the strongest quarter for phone sales. "2010 looks to be another year of large-scale consumer adoption of converged mobile devices," said Ramon Llamas, a senior research analyst at IDC. “This year, we expect [software] updates for BlackBerry, Symbian, and Windows Mobile to spark greater smartphone demand with their offerings." Nokia maintained its position as the leading smartphone vendor in Q1 2010 with its market share unchanged from a year ago. BlackBerry-maker Research In Motion remained second, while Apple more than doubled its shipments from a year ago to stay third. The iPhone-maker’s smartphone market share increased from 10.9 percent to 16.1 percent over the period, according to IDC’s figures. Meanwhile, Motorola continues to grow its smartphone market share having launched several new Android-based smartphones in the last two quarters. The firm launched six new Android devices in Q1 2010 and plans to launch a further 20 models this year.
>> All spectrum bands will be supported by LTE mobile broadband, which would make it far easier to rollout worldwide. >>
Issue 6 2010
AFRICA TELECOMS 11
News
Starhome awarded for excellence Starhome®, A leading provider and driving force of roaming services for mobile network operators, shared the Celtic Bronze award with the five project partners in the EnComPAs2 (Enabling Community Communications – Platforms and Applications) Project. Starhome contributed its IMS (IP Multimedia Subsystem) connectivity technology for the project, which includes mobile services such as smart call routing between GSM/UMTS and Wi-Fi. The project also includes Starhome’s advanced SMS to voice solution for motorists. The advanced solution, accredited for its contribution toward road safety, captures an incoming text message and converts it to a voice call, leaving drivers to concentrate on the road. The concept links mobile networks and (extended) home networks for the first time, enabling mobile operators to provide value-added services for the home, car and other environments. The implementation combines the Next Generation Network architecture consisting of LTE (Long Term Evolution)/EPC (Evolved Packet Core), which embeds the IP Multimedia Subsystem (IMS), and a home/car residential gateway. Starhome is providing the LTE/IMS connectivity for the project, including mobile services such as smart call routing between GSM/UMTS and Wi-Fi, depending on the user location.
As part of the Celtic EnComPAs2 project, the consortium team developed an innovative concept of services for the “extended home.” This environment includes the home, car and other sites acting as virtual home environments, enabling remote access to home content such as videos, photos, music and other media. Celtic is a European R&D programme that initiates and runs privately and publicly funded Information and Communication Technology (ICT)/ telecommunications R&D projects. EnComPAs2 is being led by Telefonica I+D (the research division). Consortium members include Acciona Infraestructuras and Ikerlan from Spain, and TNO ICT from The Netherlands. Shlomo Wolfman, co-founder and COO of Starhome, believes that the company's concept has the potential to revolutionize the convergence market. “Completing integration was an important step for Starhome and our consortium partners in the development of this cutting-edge technology. This project has the potential to significantly enhance the mobile landscape by both improving the home service environment and extending its reach. We are always pleased to work with like-minded partners to create concepts that will improve the industry as a whole.”
>> There will be 5.8 billion mobile subscribers worldwide by 2013. No other media channel offers anything like this reach. >>
12 AFRICA TELECOMS Issue 6 2010
Nokia/Apple patent fight intensifies
News Nokia has broadened its legal spat with Apple, filing a new US lawsuit that involves the Californian vendor’s high-profile iPad tablet computer. The world’s largest handset vendor announced Friday it has filed a complaint against Apple with the Federal District Court in the Western District of Wisconsin, alleging that Apple’s iPhone and iPad devices infringe five Nokia patents. “The patents in question relate to technologies for enhanced speech and data transmission, using positioning data in applications and innovations in antenna configurations that improve performance and save space, allowing smaller and more
compact devices,” noted Nokia in a statement. “These patented innovations are important to Nokia's success as they allow improved product performance and design.” Nokia’s latest move deepens the bitter legal disputes between the two smartphone rivals. Nokia initially launched legal action against Apple last October, but Apple hit back in December with a suit of its own. Then in January Nokia filed a fresh complaint, only for Apple to ask regulators to block imports of Nokia phones into the US due to alleged patent infringements. Analysts believe the disputes could take months or even years to resolve.
Orange and Orascom outline new ECMS structure Orange-owner France Telecom and Egypt's Orascom have provided further details on their agreement struck last month to end their long-running dispute over ownership of ECMS, Egypt’s largest mobile operator. According to a Dow Jones Newswires report, the two operators released a joint statement over the weekend following a request from local regulators to explain the US$300 million settlement fee agreed by the two firms. The fee – payable
by France Telecom to Orascom – takes "into account the value of the additional portion of EBITDA that will be consolidated by France Telecom in its financial statements” but would not impact minority shareholders, the firms said. The fee aims to compensate Orascom as it can no longer consolidate ECMS results under the amended deal. On the management side, France Telecom will appoint a chief executive officer and chief financial officer at ECMS, while Orascom will
select the chief technical officer and chief commercial officer. ECMS is 51 percent owned by a holding company called Mobinil, which in turn is 71.25 percent owned by France Telecom and 28.75 percent owned by Orascom. The Egyptian firm also has a direct 20 percent stake in ECMS with the remaining 29 percent free float. This complicated ownership structure led to a dispute between France Telecom and Orascom that lasted several years prior to the
new agreement being reached on 15 April last month. The agreement proposes a revised shareholder agreement rather than a change to the existing ownership structure. The previous deadlock resolution mechanism will be replaced with a right granted to Orascom in certain deadlock situations to put its shares in Mobinil and ECMS to France Telecom "for the Put Option Consideration," the firms said yesterday.
>> Strong growth in smartphone sales indicate 29 percent of all cell phones will be smart by 2014. This means a richer mobile Web experience for mobile users. >>
Issue 6 2010 AFRICA TELECOMS 13
News
Motorola’s SON solution offers revolutionary approach for OPEX The Networks business of Motorola, Inc. has announced several improvements to its awardwinning Long Term Evolution (LTE) self-organizing network (SON) solution that enables greater network optimization. These new features can also further simplify network management and reduce network operational expenses, bringing added value to Motorola’s LTE SON solution. The Motorola solution targets the complete operator lifecycle, from prelaunch to market maturity, with customer business models showing resource savings of up to 75 percent in planning and optimization activities. “We designed our LTE SON solution with advanced features and leading algorithms that go beyond the standards to offer a solution that helps operators reduce operational expenses from day one of their LTE network deployment,” said Fred Gabbard, vice president, Motorola Networks. “In this next release, we are leveraging our heritage in radio frequency, OFDM expertise, cell designing and optimization techniques gleaned from years of real-world experience with public safety networks to offer more features and
functionality, providing even greater network optimization and savings.” Motorola’s SON is a 3GPP Release 8 standardscompliant solution that draws upon the company’s research in network autonomics. In addition to lowering the cost of planning and deploying LTE, the advanced algorithms and features of Motorola’s LTE SON solution will help the operator dynamically optimize its network for continuous best performance and make it simpler and easier to manage. Deployed in July 2009, Motorola’s first-generation SON is on a live LTE network at its test facility in Swindon, United Kingdom. At the site, operators can watch the real-time optimization of a live LTE network and see first-hand the efficiency of its SON solution to plan, deploy, operate and optimize an LTE system. Motorola’s experience with a live network plays an instrumental role in developing the software for this next-generation solution. The new features include enhancements to auto neighbor relation (ANR) with inter-radio access technology support, automated session (call) tracing, automated cell outage detection,
and SON change tracking and operator override. These allow operators to increase productivity and reduce system errors, which improves network quality and customer satisfaction, and ultimately decreases time to market. The distributed architecture design of LTE SON and the maturity of its algorithms means the network can respond more quickly by making intelligent and faster decisions at the network level. This approach eliminates the need to create and send additional, non-billable traffic onto the network, saving an operator’s precious network capacity so it can be better utilized to serve customers by lessening backhaul requirements. In contrast, the central server approach generates network traffic that must be transmitted back and forth to the central server, making that bandwidth unavailable to meet customers’ needs and requiring more of the network to be used for backhaul. The company is demonstrating its commercial readiness for LTE deployments through its involvement in more than 20 LTE trials or engagements with customers around the world - including its contract with Zain Saudi Arabia and activities with KDDI and China Mobile Communications Corporation (CMCC). Motorola will provide the TD-LTE network for CMCC at the World Expo 2010 Shanghai China that runs May 1October 31 and completed the first indoor over-the-air (OTA) TD-LTE data sessions at the site last month. Its first commercial LTE deployments will be based on its fourth-generation Orthogonal Frequency Division Multiplexing (OFDM) products that have been proven and field-hardened and for which algorithms have been optimized to deliver best performance in a real-life environment. Motorola’s LTE portfolio also includes its evolved packet core (EPC) solution - the Wireless Broadband Core (WBC) 700 portfolio, backhaul, network management solutions, video solutions that monetize LTE investment, and a complete portfolio of professional services. The WBC 700 is comprised of mobility management entity (MME), packet and serving gateways (P-GW and S-GW), and a policy and charging rules function server (PCRF).
>> As the mobile Web matures, so brand expenditure on mobile advertising is predicted to be bigger than spending on SMS marketing. It will quadruple by 2014. >>
14 AFRICA TELECOMS Issue 6 2010
News Indosat gears up for 4G
As part of a multi year project aimed to enhance Indonesians' mobile experience, Indosat has commissioned Ericsson (NASDAQ:ERIC) to modernize its network and, at the same time, launched Asia's fastest mobile network, based on Ericsson's HSPA Evolution technology, capable of reaching up to 42Mbps. Indosat is currently serving 39.1 million subscribers in Indonesia. The modernization will not only prepare the network to migrate to next generation LTE technology, but it will also gear it up with features that reduce energy consumption and footprint, making the network more environment friendly while reducing operating costs. The sustainable character of this network will be boosted by a number of "green sites" powered by alternative energy sources. Harry Sasongko Tirtotjondro, Indosat's President Director, says: We proudly launch the fastest internet access DC-HSPA+ 42 Mbps, in which Indosat is the first operator in Asia and the second in the world. Besides providing the fastest download data
up to 42 Mbps, through the network modernization, Indosat is also supporting the telecommunication industry in creating 'green telco' that will reduce the power consumption and create a friendly environment. It will also be beneficial as it creates efficiency for the company." Johan Wibergh, head of Ericsson's networks unit, says: "With mobile data traffic doubling every year, network modernization has become key for operators to continue offering the best experience to their customers while reducing total cost of ownership and taking care of their own environmental impact". As part of the agreement Ericsson will provide Indosat with latest technology available: Radio Base Station (RBS) 6000, MSS Blade Cluster, and MINI-LINK TN. Network design, deployment, training and support services are also part of the agreement. The modernization will provide Indosat with the flexibility to evolve to next generation technology, known as LTE (Long Term Evolution).
Utiba Now Certified in Western Union’s Mobile Vendor Program Utiba, a global technology leader in the space of mobile financial transaction systems, announced that it has been certified to participate in Western Union’s Mobile Vendor Program. The program – formerly called the Digital Vendor Program – is designed to extend the reach and accessibility of Western Union Money Transfer® services to mobile financial initiatives in Latin America, Africa, Middle East and Asia. Utiba can now support Western Union services in its mobile wallet and mobile banking platforms. The certification will technically enable Utiba’s clients (mobile operators and banks) to facilitate Western Union Mobile Money Transfers. “We are proud that Western Union entrusted Utiba to successfully complete its certification program and be a key participant in expanding the mobile financial services ecosystem,” said Richard
Matotek, Co CEO, Utiba. “Millions of users who have been using the 350,000+ Western Union locations around the world to send money are now closely linked to mobile wallets, helping us taking a huge leap towards our Vision of Empowering Everyone to make Mobile Payments. We have already been able to extend this interface to our customers in Philippines and look forward to working with Western Union to enrich the service offerings to our existing and prospective customers.“ The goal of Western Union’s Mobile Vendor program is to reduce integration costs and accelerate go-to-market activities for banks and mobile operators by creating standard technical deployments. Once a bank or mobile operator contracts with Western Union to activate the Western Union® Mobile Money Transfer service, its consumers will be able to send and/or receive
money through Western Union’s money transfer system. Western Union has a global agent network of more than 350,000 locations in over 200 countries and territories.
Issue 6 2010 AFRICA TELECOMS 15
News Witch Hunting the Telecoms Sector in Ghana In the words of the great Humanitarian William Hazlitt, “Prejudice is the child of ignorance," and this is never displayed more clearly than the emotive issues raised by change and transformation within the telecoms sector. According to the consumer pressure group, The Alliance for Accountable Governance (AFAG), a campaign was launched, in Accra, Ghana, dubbed Voices for Telecommunication Efficiency Initiative (VOTE) to address their concerns over abysmal service records of the primary operators in Ghana namely Vodafone, MTN, Zain, Milicom-Tigo and Kasapa. The Pressure Group, had threatened to publish details of all the charges and operations of all telecommunication Service Providers operating in the country that are unknown to consumers, if the Mobile networks fail to act by improving their services within three weeks. Arnold Boateng, Secretary to AFAG, who addressed the media said consumers, had issues with call drops, high call charges and bad networks, and pointed out that it is high time the NCA addressed the numerous complaints by subscribers and held telecom operators accountable. The campaign gave the mobile operators three weeks ultimatum to respond to the queries and worries of the group. “Thereafter, we would embark on a network by network based advocacy to ensure that consumers get fair value for money”, stated a representative. The group even raised critical doubts about the continued existence of the mobile operators in the country. On behalf of the organisation, Mr. Boateng urged the National Communications Authority of Ghana (NCA) “to reconcile working with the Inter-Ministerial Committee (IMC) on telecommunication to ensure that regulators, policy makers and other stakeholders such as the Environmental Protection Agency (EPA) perform their core functions.” It also called on the regulating body to abide by the National Communication Policy section 4.7, which
6 4 6 6 6 6 6
states the NCA is obliged to publish the performance of the telcos on a regional basis as well as the capacity to monitor call drop rates, call congestion and receptivity. In response to the objections against the mobile operators and particularly for the ability of the NCA to publish the performance of the mobile operators, Communications Minister Haruna Iddrisu, in attendance at the press conference, explained that equipment and expertise had been acquired towards monitoring the telecommunication efficiency in the country. This equipment, he explained, would enable the NCA to address the concerns raised by the group, in addition to also providing information on call quality and fraud monitoring to significantly plug revenue leaks lost by all stakeholders including the NCA, the
operators, and ultimately the Government of Ghana. Speaking at World Telecommunication and Information Society Day and Consumer Forum in Accra, he pointed out that it was to detect international calls which were fraudulently made to look like local calls by some illegal operators to enable them to cheat the system. In a ironic twist of fate, AFAG then attacked the organization, The Global Voice Group, responsible for providing this equipment, training and transfer of the skills, to the NCA to provide and publish the information on call drop rates, call congestion and receptivity, in addition to call quality and fraud monitoring. Although there was little merit or veracity in AFAG’s overall argument, the group does seem to be on a witch-hunt against the telecoms industry in general, first attacking the mobile operators and then the NCA and Global Voice Group, its chosen partner that have been tasked to bring improvements to the entire sector. The group quite accidentally and inadvertently raised two important questions that Africa Telecoms has looked at in some depth in past issues: 1. The interconnection debate raging within the telecoms sector across the continent. 2. What is signaling in a modern telecoms network? The interconnection debate alone merits considerable time and column inches, and the appropriate forum to bring substantive decisionmaking to a highly complex issue. What was not apparent in Accra was a set of recommendations to move the industry forward beyond the current state of bickering between carriers, operators, regulatory bodies, Governments, and now consumer groups. In the end, this is a cautionary tale of how a little knowledge can have a negative impact and we hope that the mobile operators, the NCA, Global Voice Group and AFAG can resolve what is an important milestone for Ghana and for the continent as a whole, the ability for complete auditing and transparency of its telecoms networks.
>> Social networking sites, such as Twitter and Facebook, will become major drivers of 3G bandwidth consumption on smartphones within the next few years. >>
16 AFRICA TELECOMS Issue 6 2010
Gateway Business Nigeria partners with Helios Towers AFRICA’S LARGEST infrastructure sharing, colocation and managed services provider, Helios Towers Nigeria (HTN) has signed a 120-site co-location deal with Gateway Business Nigeria, a pan African telecommunications service provider, for a nationwide network roll out in Nigeria. The deal follows Gateway Business’ successful roll out of its award winning AirlinkTM and MetroLinkTMwireless broadband services, using the same 10.5GHz solution in Lagos. HTN has over 1,000 sites nationwide and will provide end-to-end co-location services to Gateway Business Nigeria, the leading provider of communications services to multinational corporations working in Africa. “Gateway is passionate about doing business in Nigeria and will be deploying world class
communications services to all the states of the federation,” said Guy Clarke, Managing Director of Gateway Business Nigeria. “We have been working on the continent for more than 15 years, building a pan African communications network. Working with HTN in Nigeria is part of our strategy to provide world class broadband internet services for Africa’s leading businesses.” The company is building a pan-African MPLS network that will cover every major African city and has acquired 10.5GHz spectrum licenses for point to multipoint connectivity in Nigeria. The company will roll out wireless broadband services across 10 Nigerian states in 2010, with Port Harcourt and Abuja scheduled to go live in the next few weeks. A further 26 states will go live through 2011. The partnership will enable
Gateway Business to roll out services quickly through the co-location on HTN sites, with guaranteed uptime and quality of service and reduced operating expenses. Gateway Business currently provides a comprehensive suite of communications services to over 1,200 corporations working in Africa. It owns and operates Africa’s most advanced regional and international networks, supporting the requirements of the continent’s voice and data users and manages diverse satellite, subsea and fibre connectivity across over 40 African countries. The network provides global connectivity for the continent through major teleport and switching facilities in Europe, the Americas and Africa. HTN commenced commercial operations in 2005 and has demonstrated its ability to
operate successfully in Nigeria. It has quickly become the leading shared infrastructure provider and the reference point for quality of service in the industry. It is well positioned to remain the dominant provider of co-location infrastructure services in Nigeria, while adapting its business models to the specific requirements of the Nigerian environment HTN recently increased its portfolio to over 1,000 sites and is growing its managed services business, planning to expand its network to 2,000 fully managed sites by end of 2010. HTN recently launched the highly successful “Lean Operator Model” that helps telecom operators reduce costs and to focus on the merchant side rather than the technological side of the business in a competitive environment.
>> In early 2010, 3G subscribers accounted for around 13% of all mobile subscribers worldwide. >>
Issue 6 2010 AFRICA TELECOMS 17
Gadgets
Africa Telecoms looks at some of the latest gadgets and devices designed to integrate your work and home life, bringing convergence to a device near you.
H Uncool HH Poor HHH Average HHHH Excellent
HHHHH Died and gone to heaven
Cool-er eBook Reader
TomTom GO 750 GPS
NEED TO KNOW
NEED TO KNOW
Supports both PDF and MP3 files / 1GB storage with SD card slot /
Pre-installed maps of Southern Africa & Europe / TomTom Google
expansion to save loads of e-books / 6-inch screen makes reading
Search / Responds to voice commands
pleasurable Cost: Approximately R3,000 Cost: Approximately R3,000
Rating: HHHH
Rating: HHHH The TomTom GO 750 adds voice control to its functionality collection Kindles are great eBook readers if you’re prepared to fork out a
to make the GO 750 yet another superb GPS device from TomTom.
hefty amount of cash. If not, then you might want to consider the
The TomTom GPS units are popular because of their simplicity and
Cool-er eBook Reader - it has a much more attractive price tag and
the GO 750 is no exception, despite looking quite different to other
even though it lacks built-in wireless functionality and a hardware
models in the range. The appearance of TomTom GO 750’s user
keyboard it more than makes up for it by adding music, an SD
interface is similar to previous GO units and the main menu consists
card slot and PDF/MP3 support. The online bookstore (http://
of three pages including ‘Navigate to’, ‘Help me!’ and preferences.
coolerbooks.com ) associated with the device featured over 750,000
Searching for an address is made easier with voice control. There are
titles available on launch and has been dubbed the “iTunes of online
more than 140 commands that you can use; in addition to finding
bookstores”. Titles can be downloaded from the store, borrowed
your way to an address, you can also avoid a roadblock, zoom in and
from friends or downloaded from a variety of online libraries. One
out of the map, increase the volume, and add any location to your
of the biggest bonuses about the Cool-er is that its supports PDF,
favourites. The GO 750 has text-to-speech technology, which means
EPUB books, and text files, and there are masses of free e-books
that it speaks the names of streets as you approach, which allows you
floating out there on the Internet in these file formats. The device
to focus on driving, without having to read street names off your
is compatible with both Mac and Windows and to get a book or file
GPS device.
onto the device, you simply connect it to your computer via USB and
This device also includes a Bluetooth hands-free function for making
drag and drop files to the Cool-er as you would any mass USB storage
calls through your Bluetooth-enabled mobile phone, making it the
device, or you can insert an SD card instead.
perfect companion for the safety-conscious driver.
18 AFRICA TELECOMS Issue 6 2010
GADGETS
Olympus Stylus 550 Waterproof Camera
Logitech Premium Notebook Headset
NEED TO KNOW
NEED TO KNOW
10MP camera with a 3X optical zoom lens, 2.5 inch LCD / LI-42B
Behind-the-head wearing style headset / independent mute button
rechargeable lithium-ion battery with charger / Waterproof up to 3
and volume control / UBS-powered means it’s perfect for travel
metres Cost: Approximately R550 Cost: Approximately R2,500
Rating: HHH
Rating: HHHH The Logitech Premium Notebook Headset is made up of both Jump in the deep end with a waterproof camera that’s light and
headphones and a microphone, so it’s a convenient computer
compact and easy to carry around wherever you go. The Olympus
headset allows you to listen to music, take part in voice chats, and
Stylus 550WP is a 10 megapixel camera with a 3x optical zoom lens,
make use of speech recognition software. This headset gives you all
2.5 inch LCD that features basic-point-and-shoot operations, for easy
the functionality you need when you’re mobile and it folds up into a
underwater happy snaps. The 550WP is really user-friendly, with no
plastic travel case. There’s no software necessary, so it’s ready to be
manual controls over exposure or anything else, really. This is a good
used once it’s plugged in. An in-line control includes a convenient
thing if you’re a fan of scene modes as the camera does offer a variety
switch for muting the microphone and there’s also a small clip on the
of them: portrait, landscape, night scene, night and portrait, sport,
back of the control that lets you attach it to your clothing for easy
indoor, candle, self portrait, sunset, fireworks, cuisine, documents
access. In terms of sound quality, you’ll be impressed. This is because
and underwater snapshot. Along with all those scene modes, the
the USB connector has it’s own built-in sound card, which means it
550WP offers Intelligent Auto mode that detects the scene you’re
can handle voice and sound at the same time, despite your notebook
shooting and automatically picks one of five scene modes for you
not being able to. Perfect for frequent travellers who need to make
(portrait, landscape, night portrait, macro, sports). With a camera
VoIP calls or use speech recognition software on the road and ideal
that’s waterproof up to 3metres, it’s not likely that you’ll find many
for listening to music and gaming as well and is compatible with
places that you wont be able to take this little shooter.
both Windows and Mac OS X.
Issue 6 2010 AFRICA TELECOMS 19
GADGETS
Message Phone QS200 NEED TO KNOW
Otter Box iPhone Commuter TL
One click push email on up to 5 accounts / Synchronizes contacts and calendar / Large color screen / camera and QWERTY keyboard/
NEED TO KNOW
Quickly access the Internet with full HTML browser / Instant
Easy to fit / Available in 7 colours / 3 Layers of Protection / Maintains
Messaging / Easy to set-up and use
sleek feel of iPhone / iPhone 3G and the iPhone 3GS ONLY / Available for Blackberry
Cost: TBC Rating: HHHH
Cost: Approximately R300
Rating: HHHHH
This great budget entry “smart-like” phone comes with all the functionality of a smart phone but with the price of an entry level
The OtterBox Commuter TL case for iPhone 3G and 3GS provides
device (expected to be under $100). For prepaid developing markets
superior protection for your phone through 3 separate layers. The
this phone is a winner. It comes with GPRS/EDGE connectivity, a
first layer protects the touch screen with a self-adhering film. The
camera (albeit only 1.3 Megapixels in resolution), a full QWERTY
second layer is a textured light weight silicone skin designed to
keyboard, Bluetooth and Instant Messaging service.
absorb shocks and bumps. This is all held together and finished
Another nice feature is the phone’s lightweight nature, tipping the
off with a hardened plastic shell that clips onto the silicone skin.
scales at a mere 73 grams. The easy to use Synchronica operating
All access ports are protected with plugs from the silicone skin and
system is well laid out and is easy to navigate. Importantly the
immediately your phone has the most sturdy and stylish protection
device also interfaces with all of the major Social Networking sites,
on the market. You would expect all this protection to come at the
namely Facebook, Twitter and My Space. What makes this handset
cost of bulkiness. Somehow the OtterBox designers have managed
stand out in the crowd however is Synchronica’s ability to offer
to avoid this pitfall. This iPhone will not be without its OtterBox
operators offering this phone on their networks all of the supporting
protection. This is a great product that has been designed with
infrastructure to enable push e-mail, data synchronisation and
thought and care and does all that the Box promises.
instant messaging - at a fraction of the cost one would normally
Great Product, Great Price.
expect. With the mobile Internet taking the developing market by
Best of Breed.
storm, Synchronica, KC Mobile and Brightstar have landed a winner
Dimensions (case only): 12.01cm x 6.68cm x 1.67cm
with this entry level and very competitively priced device.
Weight (case only): 20.97 grams.
20 AFRICA TELECOMS
Issue 6 2010
GADGETS
Sony Wearable Walkman MP3 Player 2GB NEED TO KNOW
this device actually builds the MP3 player into the headphones for
MP3 player fits securely on your head, for total wireless listening /
ultimate portability. The earphones clip together for storage, but
2GB storage holds up to 500 tracks, battery life of 12 hours / Quick
when in use, it’s simply a pair of tasteful black and silver earphones.
charge feature: 90 minutes playback time from a 3 min quick charge
The audio is fantastic, built-in 13.5mm Sony EX drivers for amazing sound quality and powerful bass – something not usually found in
Cost: Approximately R1,000
portable earphones. This player also offers a quick-charge feature
Rating: HHHHH
that will give you 90 minutes of playback from a single 3-minute charge which is particularly handy if you’ve forgotten to recharge,
The new all-in-one Sony Wearable MP3 Player gives you music that
but desperately need to work out and don’t want to be without your
you can wear and experience in total freedom - this distinctively
MP3 player. Included with the device is a sticky-bottomed docking
different MP3 player fits compactly and securely around your head
station for charging the device and transferring songs and that’s all
so you can be free to move without the constraint of headphone
done using standard Mini-USB. Lastly, each earpiece is magnetized
wires. No matter how physical your activity – running, tennis, cycling
and when you stick them together, the player automatically powers
– you’ll hardly even know it’s there. This is due to the fact that Sony
down. With 12 hours of playback time, there’s finally a music device
departed completely from the traditional design of MP3 players as
that’s guaranteed to power you, for as long as you need it.
Issue 6 2010 AFRICA TELECOMS 21
THOUGHT LEADERSHIP
3G will drive mobile data uptake in Africa for some time to come still. Alistair McGrath, Director, Market Development Service Provider for the Africa Levant region at Cisco, shares his thoughts on the market and what operators are doing to keep up with demand for mobile data, specifically 3G. by JOHANN BARNARD
Alistair McGrath With Morgan Stanley predicting mobile broadband growth in Africa at an annual compound rate of 88% between 2009 and 2013, it is easy to understand the attention directed at the ‘dark continent’. Equipment vendors, VAS providers and network operators are all equally enticed by the tremendous potential that exists in the many millions of users clamouring for access to voice and data services. >> 24 AFRICA TELECOMS Issue 6 2010
LEAD STORY
thinking out the box at cisco. staff at a warehouse show their enthusiasm. Issue 6 2010
AFRICA TELECOMS 25
"grappling with the evolution of mobile data and voice in Africa is a daily concern." Whether they can afford it, and how operators will deliver services cheaply, but still profitably, is the burning question. For network equipment and service providers such as Cisco, grappling with the evolution of mobile data and voice in Africa is a daily concern. Alistair McGrath, Director, Market Development Service Provider for the Africa Levant region at Cisco, shares his thoughts on the market and what operators are doing to keep up with demand for mobile data, specifically 3G. 'immense potential' Morgan Stanley’s Mobile Internet Report, published in December 2009, paints a very clear picture of the landscape, specifically these challenges that operators have to contend with. “With nearly 4 billion mobile subscribers, but only about 260 million of them expected to be on 3G networks by yearend 2009, we believe emerging markets offer immense potential demand for the mobile Internet – more than many investors appreciate,” states the report. Affordability of 3G services, however, is a stumbling block with monthly data plan costs still prohibitively high as a percentage of GDP, Morgan Stanley warns. “The dominance of prepaid wireless plans and high device and data plan costs (relative to GDP) are slowing 3G adoption. In our review of rollouts in Asia and Africa, take-up and data revenue growth have been slow (just 1-3 percentage points per year since 2005), with negligible impact on ARPU and EBITA margins. Users on prepaid plans think twice about downloading data, so once flat-rate pricing begins in earnest – as it did with AOL in the US in 1996 and Docomo in Japan in this decade – usage should begin to accelerate.” McGrath acknowledges that this is a difficult equation to balance, but that Cisco is working – often in collaboration with network operators – to develop solutions that enable the required return on investment. “There is huge potential in Africa, and we have made good progress, with a lot more to come as well,” he says. “It does challenge the traditional business model of any operator, and they are all struggling to adapt to new business models.” The pressures on the conventional approach, he says, are threefold: operators are having to cope with the explosion in data traffic while expanding services cost-effectively; the skills gap created by this demand and the lack of qualified personnel; and settling on a workable revenue model. McGrath suggests that the answer lies in innovating and
26 AFRICA TELECOMS Issue 6 2010
McGrath suggests that the answer lies in innovating and developing systems and services that offer operators greater flexibility, control and management capabilities that enable more appropriate and affordable services to users. developing systems and services that offer operators greater flexibility, control and management capabilities that enable more appropriate and affordable services to users. “The acquisition last year of Starent Networks, for example, gives us the ability to offer operators far greater scalability in terms of delivering many more applications through their data networks,” he says. “We are also able to provide intelligence in the network that allows them to manage quality over a common core network, which is an area in which we are seeing strong growth.” The backhaul element of the network is also gaining prominence, he says, as operators seek more effective and
efficient means of handling increased data demand. “As mobile data skyrockets across the world, mobile operators are now saying ‘how do we move mobile traffic onto fixed network', and this is one of the reasons we are seeing growing implementation of ethernet to base station connections.” 3G still relevant The explosion in demand for data services naturally raises the question of the role and future of 3G networks in Africa. McGrath believes that 3G is and will remain an attractive technology on the continent for some time, based primarily on the low penetration levels. The extensive rollout being undertaken by network operators will in itself produce greater economies of scale, he suggests, and possibly even discounting of 3G equipment as mature markets turn to 4G. “I believe we will see a lot more deployment of 3G before LTE is adopted, especially given that some operators have started investing in the second generation of 3G, or 3.5G, that offers speeds of up to 21Mbps,” he says. It is probably still too early for LTE deployment in Africa, he adds, while WIMAX has been held back by certain limitations, but has been successfully deployed in countries such as Nigeria and Botswana and still has a place in the market as an alternative.
Priorities and choice of technology, though, is likely to be driven by user demand, and if current trends continue, the thirst for data will only grow. Morgan Stanley predicts that data revenue in emerging markets (not exclusively Africa) could range between $2.7 billion and $5.4 billion in 2012, depending on the ARPU from music, gaming, video, and other mobile broadband apps. “The number of Internet users in the top 10 emerging markets surpassed those in the top 10 developed markets last year (2008), and we expect the same to occur with mobile Internet before long,” says Morgan Stanley. This equation is likely to be quite skewed in markets such as Africa due to the reliance on mobile Internet connections due to the lack of ADSL broadband connection in the region. McGrath says the increase in demand for services such as video will definitely impact on growth and data demand and eventually lead to the progression from standard 3G. He points to the South African market where the mobile operators have been investing in so-called 3.5G networks. He says other markets such as Tunisia, Morocco, and Kenya have seen similar developments. In Nigeria, for example, the company partnered with MTN to introduce the first public Cisco TelePresence rooms that enable video conferencing via the MTN network.
Issue 6 2010 AFRICA TELECOMS 27
cisco in africa
Cisco is a key player in the continent’s ICT environment, providing critical equipment and solutions to some of the largest Pan-African network operators and organisations.
Egypt, Morocco, Algeria, Tunisia, Libya and Senegal. Leading operators that it counts as customers include Orascom, MTN, Safaricom, Telkom, Vodacom and Zain/ Bharti. The company is focused on four key areas:
Using South Africa as its head office for the region, Cisco is also active in Angola, Botswana, Kenya, Nigeria,
Connected real estate that enables organisations to harness the benefits of Next
broadband revolution The ability to provide these and other broadband-intensive services would not be possible without the arrival of submarine broadband cables such as the Seacom and EASSY cable systems. Cisco was intimately involved in the Seacom project in delivering technology to enable speedy and efficient delivery. “These cable systems are very important in terms of bringing down broadband costs,” says McGrath. This is an important ingredient in an operators’ recipe of delivering the right services at the right price. Trying to optimise operations to take advantage of demand and this new bandwidth, Cisco is increasingly contracted to provide network management services on the customers’ behalf. “Customers ask us to deliver a one-stop-shop type service taking in the delivery of equipment and management expertise,” explains McGrath. “We have been investing heavily in our
28 AFRICA TELECOMS Issue 6 2010
Generation Access fixed and wireless broadband digital infrastructure; New generation of contact centres; Expanding its service provider footprint;
It also values the power of knowledge and is determined to provide greater access to education opportunities for individuals, communities and nations, thereby impacting on the standard of living and economic prosperity of countries in the region.
Stimulating ICT growth in the public sector.
services organisation as this demand has grown, which is also indicative of the shortage of the relevant skills in the industry. “We are also in a position to offer financing agreements to help customers with an economic model that works for them.” Looking to the near-future, McGrath says it will be interesting to see how operators respond to the pricing pressure on operators to run low-cost operations. The imminent acquisition of Zain by Bharti, he says will be interesting as the Indian operator will undoubtedly introduce innovations and lessons learnt in its home market. Similarly, moves by operators that hail from more mature markets, like Orange and Vodafone, would be able to share lessons on consolidating operations. “I am confident we will see more innovation on costing models designed to deliver services at the right price points,” he says. AT
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EVENTS CALENDAR EVENT
DATE
may
jun
jul aug
sep
CITY
CONTACT
ORGANISER
2010
11-12
BANKING & MOBILE PAYMENTS WEST AFRICA
Lagos Nigeria
Helen Moroney +44 148 088 0774
www.aitecafrica.com/event/view/46
19-20
BROADCAST & FILM AFRICA
Nairobi Kenya
Helen Moroney +44 148 088 0774
www.aitecafrica.com/event/view/43
23-27
IEEE ICC 2010 CONFERENCE
Cape Town South Africa
Zelda Coetzee +2721 762 1442
http://www.ieee-icc.org/2010/
24-27
GSMA MOBILE MONEY SUMMIT
01-03
BROADBAND FOR AFRICA 2010
Nigeria
Rumana Bukht +44 208 600 3800
http://www.cto.int
09-10
cyber security forum 2010
Malta
Rumana Bukht +44 208 600 3800
http://www.cto.int
16
west & central Africa com
Dakar Senegal
Caroline Wiezien +44 207 017 5605
www.comworldseries.com/wcafrica
12
submarine networks world africa
Johannesburg South Africa
Julie Phillips +2711 516 4058
www.terrapinn.com/2010/submarineza
the internet show
Johannesburg South Africa
Julie Phillips +2711 516 4058
www.terrapinn.com/2010/africa/
02
AITEC Africa AITEC Africa
IEEE
GSMA
Rio de Janeiro Brazil
www.mobilemoneysummit.com
C.T.O C.T.O
Informa Telecoms & Media Terrapinn
Terrapinn
11-14
comarciin-country workshops
Ghana
Rumana Bukht +44 208 600 3800
http://www.cto.int
17-19
5th connecting rural communities forum 2010
Accra Ghana
Rumana Bukht +44 208 600 3800
http://www.cto.int
Cape Town South Africa
Julie Phillips +2711 516 4058
www.comworldseries.com/africa
Lagos Nigeria
Caroline Wiezien +44 207 017 5605
Sri-Lanka
Rumana Bukht +44 208 600 3800
13 28
telecoms world africa 2010 nigeria com 8th annual cto
20-24 forum 2010
30 AFRICA TELECOMS Issue 6 2010
C.T.O
C.T.O Terrapinn Informa Telecoms & Media www.comworldseries.com/nigeria
C.T.O http://www.cto.int
May 2010 - May 2011 DATE
oct
EVENT aitec mozambique ict
06-07 congress
26 north africa com
nov
10 africacom GSMA MOBILE
17-18 asia congress
feb
27-28
mar
ORGANISER
Maputu Mozambique
Helen Moroney +44 148 088 0774
www.aitecafrica.com/event/view/53
Cairo Egypt
Veronika Pete +44 207 017 5818
Informa Telecoms & Media
Cape Town South Africa
Caroline Wiezien +44 207 017 5605
Informa Telecoms & Media
Johannesburg South Africa
Julie Phillips +2711 516 4058
Management World
01-02 Middle East 2011
11 roamfest & hubfest prepaid cards
28 africa 2011
mobile money
31 world africa
may
23-27 Management World 2011 30 satcom 2011 africa
www.comworldseries.com/africa
GSMA
Management World Asia 2011
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Issue 6 2010
AFRICA TELECOMS 31
M
obile growth in Africa has been spectacular during the last decade. From pretty much a standing start, the continent now boasts an average mobile penetration of over 40%. In some countries, such as Ghana, Egypt, Nigeria and South Africa, mobile penetration is much higher. Yet the overall pace of annual African mobile growth is on the decline, and has been for a few years. Informa Telecoms & Media, a research firm, calculates that annual mobile subscriber growth in Africa was 26% during 2009, compared to a 35% growth rate in 2008 and a 42% jump in 2007. With 2G growth weaker than before, 3G is creeping up the agenda of many African operators as a potential way to bolster revenue growth through mobile data and internet access services, particularly in urban areas where fixed-line broadband is patchy and expensive. But it is still early days for African 3G. According to Informa, GSM represented 93% of the continent’s mobile subscriptions as of Q1 2010, with 3G/WCDMA and 3G/EV-DO accounting for market shares of only around 3.4% and 0.5% respectively. Moreover, of the 3.4% of WCDMA users (which represent 16 million subscriptions), Informa calculates that fewer than five million actively use the 3G data services. The remaining WCDMA subscribers in Africa use their 3G service only for voice. Despite the low 3G subscriber take-up so far, figures supplied by both the GSA (Global mobile Suppliers Association) and the CDG (CDMA Development Group) indicate that 3G network rollouts for both WCDMA and EV-DO are gathering pace in many parts of Africa, and not just in the comparatively more developed economies, such as Egypt and South Africa (see ‘HSPA brings faster 3G to Africa’ and ‘CDMA growth in Africa’). “In many African markets, the main revenue driver for 3G is still internet access rather than internet-enabled applications,” adds Said Irfan, a research manager at IDC who covers the African markets. “In Africa, there is a clear opportunity to give people their first experience of accessing the internet over a mobile network rather than through fixed, given the lack of a proper fixed infrastructure in many parts of the continent.” Irfan highlights the rapid headway that mobile broadband is making in Morocco, where the total number of mobile broadband subscribers has surpassed the number signed up to fixed broadband services. “Mobile broadband in Morocco has even caused a significant drop in fixed broadband growth,” adds Irfan. Greater enthusiasm for 3G in Africa cannot only be explained as a response to lower growth prospects from 2G. “Some regulators are only getting around to releasing 3G spectrum now,” says Robert Schumann, a lead consultant at Analysys Mason. “The prices for 3G equipment are also coming down, which, in some cases, means that 3G can be added at little extra cost in the course of normal equipment replacement cycles.”
THE BHARTI FACTOR
The arrival of India’s Bharti on the African continent, following its
32 AFRICA TELECOMS Issue 6 2010
US$10.7 billion purchase of the majority of Zain Africa's mobile assets in March 2010, may well drive down 3G kit prices even further. Deep-pocketed Bharti, which is eyeing up large-scale 3G rollout in India, would have the purchasing muscle to drive better deals with 3G suppliers through greater economies of scale. “Although Bharti’s strategy has mainly been about keeping a low cost operation, I don't think they would be averse towards rolling out 3G in the continent, judging from their current bid for an Indian 3G licence,” says Irfan. “Nonetheless, the pace of the rollout depends on how high the license prices are initially set. Given that 3G spectrum is considered a scarce resource, governments in Africa tend to set a price that in the end could prove harmful for operators' business case in a lowARPU market.” Thecla Mbongue, a senior research analyst and African markets specialist at Informa, points out that Bharti runs 3G networks in all of its other international operations: Guernsey, Jersey, Sri Lanka and Seychelles. But out of the 15 Zain operations sold to Bharti, 3G is only available in Ghana, Nigeria and Tanzania. So, one might reasonably conclude that 3G expansion in Africa is on Bharti’s agenda. “Bharti’s focus does lie in running more efficient networks, but we don’t think that it will refrain from following 3G opportunities if the market environment is favourable,” says Mbongue.
3G
But Schumann warns that 3G is unlikely to revolutionise mobile operations in Africa in the near to mid-term, and that some markets will have a much better chance of 3G success than others. “Mobile data still accounts for a small part of mobile revenue, and rollouts are concentrated in urban areas,” he says. “A key success factor for any mobile data proposition is revenue density, which makes Egypt [due to population concentration] and South Africa [due to urban income levels] more likely markets for 3G success, and, indeed, they are at the front of the pack now.” In Egypt, observes Schumann, Vodafone is already the leading broadband provider (ahead of Telecom Egypt in terms
SPECIAL FEATURE
begins to stir in Africa By Ken Wieland
With 2G growth slowing down in Africa, 3G network rollout is starting to pick up pace in many urban areas across the continent
Issue 6 2010 AFRICA TELECOMS 33
In many African markets, the main revenue driver for 3G is still internet access rather than internet-enabled applications of subscriber numbers). In South Africa, Vodacom took the broadband subscriber lead from Telkom, the country’s fixed-line incumbent, in Q2 2009.
CABLING UP THE 3G BUSINESS CASE
Although licence terms and conditions, as well as the high-value contract wins for suppliers, invariably grab all the 3G headlines, there is a less glamorous but equally important side to the 3G business case. The ability to reduce network operating costs, particularly in highly competitive markets, will be necessary if operators are to provide attractively-priced retail mobile data packages without wreaking havoc on their profit margins. And for many mobile operators in Africa, particular in East Africa, the availability of more international and national bandwidth capacity – at cheaper prices – should increase their chances of achieving that. In July 2009, a second submarine fibre-optic cable connecting South Africa to the rest of the world went live. The 17,000km cable, built by Seacom—a Mauritius-based private-sector vehicle—at a cost of US$600 million, runs from Mtunzini in KwaZulu-Natal to India and Europe, via landing stations in Madagascar, Tanzania and Kenya (and so connects East Africa
34 AFRICA TELECOMS Issue 6 2010
to the global fibre-optic cable network for the first time). With a capacity of 1,280Gbps, Seacom is far larger than the existing SAT3 cable (120Gbps) that runs up the west coast of Africa, which is operated by South Africa’s state-owned Telkom. EASSY, another privately-held international submarine cable connecting East Africa, is due to be completed in June 2010, and will bring an additional 1,400Gbps capacity. Despite the availability of cheaper wholesale submarine cable prices, which reportedly undercut pre-Seacom prices by ten times or more, Schumann is cautious they will have a dramatic and positive impact on every mobile operator – and not simply because some operators are still tied into paying pre-Seacom prices on long-term contracts. “This is partly because there remain constraints on the radio capacity, on the backhaul from base stations to a switching centre, and on end-user devices that remain limited in their ability to consume large amounts of data,” he says. “Laptops also remain stubbornly above US$200, compared with US$20 for a 2G handset and approximately US$40-50 for a 3G handset. Inelasticity of customers’ demand, and marginal utility they derive from new technologies, will limit the uptake of mobile data.” Even so, some mobile operators, such as South Africa’s MTN,
are making concerted efforts to boost network capacity by investing in terrestrial fibre-optical cables, which will also connect to the undersea cable systems. By investing heavily now in network capacity, MTN hopes to reduce operating costs in the long term. In partnership with Neotel, South Africa's second national operator – and Seacom's main anchor tenant – MTN is rolling out a 5,000-km internal fibre-optic cable network. During 2009, MTN reports that 245km of the fibre-optic cable was completed along the Gauteng-Durban route. The southern and northern rings of the Gauteng fibre projects are expected to be completed by July 2010. “We have been fairly active in the submarine cable area, not as a speculator but primarily to provide capacity for our own operations and hopefully, in the process, reduce the costs,” said Phuthuma Nhleko, president and CEO of the MTN Group, in a March 2010 analyst conference call to present the group’s 2009 financial results. “To date [we have invested] almost $85m and we've most probably got commitments close to $200m over the next few years.” MTN fibre-optic investment is running in parallel with 3G network rollout in Ghana, Nigeria and South Africa. In South Africa, MTN’s 3G capacity increased 22% during 2009 compared with a 12% increase in 2G capacity. Moreover, MTN’s 3G population coverage increased in South Africa from 35% in December 2008 to 48% in December 2009. “Operators that have a stake in cross-continent data networks, such as MTN's UUNet and Vodacom's Gateway, would certainly benefit in more ways from the availability of extra capacity than pure mobile operators by way of their ability to offer more services to clients,” adds IDC’s Irfan. “Also to benefit early are mobile operators with IRUs [indefeasible rights of use] on the subsea cables, as they would be able to gain a first advantage in accessing the extra capacity.”
FUTURE TRENDS
Moving forward, Schumann expects more 2.6GHz spectrum to become available in Africa in the near future, which fits well with 802.16e mobile standards). It is likely, however, that 802.16e – due to considerations of cost and regulatory restrictions – will be used more for fixed and nomadic broadband services rather than as a true mobile service (and a direct competitor to cellular 3G). UHF (TV) spectrum will also become available on the continent once the digital switchover gets moving – there is a regional deadline of 2015 for Africa to complete the transition from analogue to digital TV. Again, that should provide more opportunity for 3G growth across the continent. The availability of more spectrum does, of course, throw the spotlight on regulators as to how they allocate it. As in other regions of the world, Africa has not been immune to
3G TECHNOLOGY SNAPSHOT HSPA AND HSPA+ Suppliers of 3G equipment, based on WCDMA technology, talk enthusiastically about software upgrades that will allow operators to achieve peak downlink speeds of up to 14.4Mbps. The technology, known as HSPA (high-speed packet access), is available in three flavours: peak downlink speeds of 3.6Mbps, 7.2MBps or 14.4Mbps. The first two are becoming more and more popular in Africa, but no mobile operator on the continent has yet to adopt the 14.4Mbps version (see HSPA brings faster 3G to Africa). Beyond HSPA there is HSPA+, which uses higher order modulation schemes (from 16QAM up to 64QAM) and more advanced antenna technology (known as MIMO). The first HSPA+ step is to deliver peak downlink speeds of 21Mbps, but Germany, Italy, Singapore and Switzerland – according to survey information published by the Global mobile Suppliers Association (GSA) in April 2010 – already boast commercial HSPA+ networks that deliver up to 28Mbps on the downlink. Orange, which has invested heavily in HSPA networks in Africa, has gone one better. In Austria, Orange now offers a commercial 42Mbps peak downlink service in the town of Weiner Neustadt. Ericsson,theworld’slargestsupplierofmobileequipment in terms of sales, anticipates that the combination of multicarrier MIMO and 64QAM modulation will enable peak HSPA+ bit-rates of 84Mbps and, eventually, 168Mbps.
HSPA BRINGS FASTER 3G TO AFRICA The overwhelming majority of WCDMA-based 3G operators are turning to HSPA (high-speed packet access) to boost downlink and uplink speeds. Africa is no exception. According to data supplied by the GSA (Global mobile Suppliers Association), 38 countries in the Middle East and Africa (MEA) had either commercial HSPA networks up and running by April 2010, or had operator commitments to do so. MEA, according to the GSA, accounts for 25% of countries in the world who either have HSPA commercial services or network rollout commitment. Europe (36%), Americas (20%) and APAC (19%) account for the remaining distribution of countries around the world that have commercial HSPA. The list of commercial HSPA rollouts in Africa is growing fast. According to the GSA, there are commercial HSPA operators in Angola, Botswana, Egypt, Ethiopia, Ghana, Kenya, Lesotho, Libya, Madagascar, Malawi, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Nigeria, Reunion, Rwanda, Senegal, Seychelles, South Africa, Sudan, Tanzania, Uganda and Zimbabwe. Of the 186 commercial HSPA networks around the world, just over half (54.5%) support a peak downlink of 7.2Mbps or above, says the GSA. The majority of HSPA operators in Africa, however, only deliver peak rates of 3.6Mbps or under. Even so, there is a growing list of HSPA operators on the continent that go beyond 3.6Mbps. Mobinil and Vodafone (Egypt); Safaricom (Kenya); Orange (Mauritius, Réunion and Senegal); Méditel (Morocco); MTC (Namibia); Vodacom and Telkom (South Africa); Sudatel, Zain and MTN (Sudan); and Vodacom and Zain (Tanzania) each offer peak downlink
rates of 7.2Mbps. There are no African mobile operators, however, that offer HSPA at peak rates of 14.4Mbps, or any that has opted for HSPA+ that can reach to 21Mps, 28Mbps or 42Mbps. Of the 341 commercial HSPA operators around the world, GSA says that 52 have launched HSPA+ (across 32 countries). Although the majority of HSPA+ launches are in developed economies, there are exceptions: Bulgaria, Croatia, Greece and Turkey each have HSPA+ operators, which might suggest that HSPA+ will also have a place in some of Africa’s markets.
CDMA GROWTH IN AFRICA Africa accounted for only 5.4% of all CDMA subscribers in the world as of December 2009, which translates into nearly 30 million, according to figures provided by the CDG (CDMA Development Group). However, the rate of CDMA subscriber growth in Africa between December 1997 and December 2009, at 31%, is faster than any other geographical region in the world. Although the CDMA subscriber statistics provided by the CDG include 2G CDMA2000, CDMA WLL (wireless local loop) systems – as well as 3G – it shows that Africa has a fairly large and strongly growing base from which to evolve CDMA networks to their faster and higher-capacity 3G versions, such as 1xEV-DO Rel. 0 (peak downlink speeds of 2.4Mbps) and 1xEV-DO Rev. A (3.1Mbps peak downlink rates). Yet of the EV-DO subscriber total worldwide as of December 2009 (142.1 million), Africa still only accounts for 3% (4.2 million). North America and the Asia-Pacific make up the bulk
spectrum disputes. In Kenya, for example, operators aiming to break the 3G monopoly held by Safaricom have complained to the regulator that the US$25 million licence fee is too high and will jeopardise the 3G business case. “Some governments do indeed auction 2.1GHz spectrum at a high price, since it is a sought after spectrum band by GSM operators in need of upgrading to WCDMA,” says Informa’s Mbongue. “So far, the most expensive 3G spectrum fees [in the 2.1GHz band] were recorded in Egypt where the frequencies were sold for over US$700 million to Vodafone and Mobinil in 2002. Nigeria has recorded the second highest fees as four operators each paid US$165 million for 10MHz in the 2.1GHz band in 2007. Usually the price per population has been around US$1 [US$1.24 in Nigeria], but in Egypt it was around US$9.” Yet Africa, on the whole, appears to have learned some 3G
36 AFRICA TELECOMS Issue 6 2010
of the world’s 1xEV-DO subscribers with 54.3% and 34.3% market shares respectively. With nearly a doubling of 1xEV-DO subscribers during 2009, however, Africa is showing stronger CDMA-based 3G momentum than other regions in the world. According to the CDG database (as of April 2010), commercial 1xEV-DO Rel. 0 cellular networks are up and running in Angola, Cameroon, Lesotho, Liberia, Malawi, Mauritania, Mauritius, Morocco and Namibia. Commercial 1xEV-DO Rev. A cellular networks are available in the Democratic Republic of Congo, Morocco, Senegal, Sierra Leone, Sudan and Tanzania. The CDG also reports that Wana, a privately-held telco in Morocco – and which already operates commercial Rev. A and Rel. A networks – is planning to launch a 1xEV-DO Rev. B network. Rev. B networks can offer peak downlink speeds of up to 9.3Mbps (or up to 14.7Mbps with a hardware upgrade). A key driver for CDMA growth in Africa is Huawei and ZTE. Both Chinese vendors have invested heavily on the continent and have historically managed to undercut many of their western supplier counterparts on price. Again, referring to the CDG database, Huawei accounted for 64 of the publicallydisclosed CDMA contracts (2G, 3G and WLL) in Africa as of April 2010, while ZTE accounted for 37. Motorola, Nortel and Star Solutions are the only publicly-disclosed western suppliers with a CDMA presence in Africa, but they can only claim a handful of African CDMA contracts in total among them.
licensing lessons from developed economies – at least according to Schumann. “Many regulators are now avoiding the temptation to consider 3G to be a cash cow,” says Schumann. “Mozambique and Botswana, for example, have not attached large price tags to 3G or WiMAX spectrum. This is both for pragmatic reasons. Governments recognise that the hype around Europe’s 3G licence awards was not replicable and because, in simple terms, the spectrum is only valuable when it is being used productively. Demanding exorbitant fees simply leads to delays, court battles, investor uncertainty and substantial fees paid to banks and financial advisors who help to raise new capital.” If governments can refrain from charging exorbitant licence fees, and mobile operators can reduce their network operational costs – and the price of devices continues to fall – 3G has every chance of success in Africa. AT
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Connecting the
Where is Africa in the great data race and will cellular connectivity be the way the continent bridges the digital divide? By Brett Haggard
W
here South African users have begun to embrace the power of mobile Internet connectivity with telecommunication companies starting to look beyond HSPA and HSPA Plus technologies towards fourth generation solutions such as LTE and Wimax, the rest of Africa is at the point where 3G connectivity is only now becoming an option. And depending on who you speak to, the story varies between being extremely positive and downright disheartening. While on paper a number of telcos have technically rolled 3G out in their regions of operation, that should by no means imply that 3G is available across the entire reach of their coverage area – or even in areas with a healthy saturation of users. It seems like, 3G is still reserved for the most built-up urban
42 AFRICA TELECOMS Issue 6 2010
areas and set up as an overlay of a blanket GPRS or EDGE network. But it’s not because the telcos don’t see any potential. It’s among other things because Africa is a market with an extremely low average revenue per user (ARPU) and in conditions such as these telcos need to gauge what the uptake and revenue generating capability of a new service is likely to be before they launch that service. It really isn’t a case of ‘build it and they will come’.
next billion (Does the market exist?)
Cong
o
The government of the Democratic Republic of Congo, is asking US$55m for a license to deliver 3G services in its country. This does not offer much incentive for a 3G rollout.
Indi
Keny a
a
The emerging market of India currently has a base price for the country’s 3G spectrum auction at US$2billion.
Telkom Kenya has launched trials of its 3G service in Nairobi, despite of its discontentment regarding the $25 million license fee imposed by Communications Commission of Kenya (CCK).
Issue 6 2010
AFRICA TELECOMS 43
Expensive licenses, limited returns Douglas Lubbe, Group Executive for Vodacom Group’s International Business says the first hurdle to get through is acquiring a license and justifying the associated capital expense. Acquiring a 3G license can be a costly affair, so costly in fact that often there’s little hope of recovering that expense through adding 3G revenues to the mix over the short-to-medium term. That could be why the Vodacom Group has 3G coverage in Mozambique, Lesotho and Tanzania, but not in the Democratic Republic of Congo, where the government is asking $55m for a license to deliver 3G services in its country. Bertus Ehmke, Senior manager for technology strategy and the MTN Group agrees. He says that telcos paid ridiculous sums for 3G licenses ten years ago and when the
44 AFRICA TELECOMS Issue 6 2010
Once the license has been acquired, it’s also not realistic to expect the 3G coverage area to be vast. technology under-promised somewhat in terms of the revenue it delivered, prices came sliding down. But, now they’re on their way back up to a ridiculous level. “Take another emerging market like India for example,” he says. “The base price for the country’s 3G spectrum auction is already at the $2bn market,” he says. It seems like the market sentiment is that regulators want too much for a decent size chunk of 3G spectrum and aren’t willing to consider the limited revenue generation opportunities for telcos, which in turn hinge on the disposable income in a country, the
level of cellular penetration and lastly, the telco’s ability to backhaul Internet traffic into and out of the country. One positive Ehmke points out is that the growth and adoption of HSPA on 900MHz is going well. “We’re especially excited by the ability it grants telcos to serve a three times larger coverage area at the same price and with the same capabilities,” he says. And Ehmke says this service is already being trialed by MTN’s operations in Uganda, Zambia, Ivory Coast, Cameroon and Botswana. Once the license has been acquired, it’s also not realistic to expect the 3G coverage area to be vast.
Conservative rollout planning “When we embark on a 3G rollout in any market, we start with the major urban areas i.e. where it makes most financial and
“We have to make sure there’s a market for 3G services before we deploy into an area”
business sense, and then extend into other areas based whether there’s a business and commercial rationale to do so,” Lubbe says. He says that for many customers, it’s more about having some form of reliable connectivity than having enhanced speed of connectivity, and Vodacom is not convinced that by extending 3G capabilities to areas that already have EDGE or GPRS coverage, there will be a massive increase in revenues. “In Mozambique for example, some of the biggest revenue generating data connections we have are in the rural areas, where a handful of game lodges require Internet connectivity and GPRS or EDGE suits fine,” he says. That said however, Lubbe says that Vodacom is focused on constantly expanding its 3G network in these markets. “But we have to make sure there’s a market for 3G services before we deploy into an area,” he says.
Furthermore, Lubbe says there’s no hard and fast rule for when a region or a coverage area needs 3G. The company conducts extensive research into a piece of geography and its population’s usage patterns, and then makes a decision from there. Lubbe says the Vodacom Group is also not stopping with 3G. “We do envisage rolling out nextgeneration technologies such as HSPA and LTE out into Africa, but it’s not likely to be in the near future,” he says.
Is there backhaul? Another big factor Vodacom weighs up when gauging the readiness of a market for enhanced data services such as 3G is whether or not there’s adequate backhaul infrastructure in place to feed users what they need – whether that’s access to a website in the U.S. or Europe, or a piece of content or functionality that is available
on a local server. While the international bandwidth issue is in the process of being solved, right now there’s no redundancy of which to speak, as was demonstrated by the massive outages companies across the continent faced while the Seacom cable was being repaired a month ago. He says the local loop in many African countries is also a massive issue, since there’s not enough working fibre cabling in the ground to connect major business centres together and ultimately provide a speedy, reliable link to the much needed undersea cables carrying traffic to and from the more developed world. Lubbe says that Vodacom is making investments into fibre principally at local loop level. But it’s important to note that these investments are not at the same level as Vodacom’s investments in South Africa, both in terms of the volume of capital being spent or their long-haul nature.
Issue 6 2010 AFRICA TELECOMS 45
Customer equipment costs Once the economies of the network are out of the way, Lubbe says there’s also the availability and price of terminal equipment to consider. “3G is still a relative niche and the client-side equipment that enables 3G tends to be more expensive than 2G equipment,” he says. “The prevalence of notebooks equipped with internal 3G modems is also not as significant in Africa as it is in other parts of the world,” he says. “We are seeing encouraging growth here however,” he says. Given time, these markets will develop. “It’s contingent on factors like the reduction of terminal and handset pricing and since many of the markets Vodacom is interested in have upwards of 98.5% on prepaid plans, there’s little that can be done to bring terminal pricing down with subsidies,” he says. “That will change, though. “A couple of years ago we were dreaming about handsets that cost less than $20 a unit and that’s now a reality. The next step is
for 3G handsets to get to that level and we’re hoping it can happen in the next three to five years,” he says. MTN’s Ehmke says that 3G terminal equipment is already in the region of $50 for a USB modem-type device and that it’s already much less of a barrier than what is used to be. “And with the industry’s help, the price of 3G equipment is getting driven down even further,” he adds. While Lubbe says that businesses currently have the core drive for mobile data requirements in these regions, the consumer market is catching up and this is where the momentum will come from. But the point is, enhanced third generation and new fourth generation technologies are still some way off.
Looking beyond 3G, HSPA Ehmke says that internationally LTE has grown in maturity rapidly over the past 18 months and this is largely because mobile Wimax, another fourth generation technology is being relatively successful in emerging markets. The recent maturation of LTE is largely because the GSMA has been encouraging mobile operators to hold off on Wimax and
“It’s contingent on factors like the reduction of terminal and handset pricing and since many of the markets Vodacom is interested in have upwards of 98.5% on prepaid plans, there’s little that can be done to bring terminal pricing down with subsidies.”
instead start investigating LTE. “The problem in Africa,” he says, “is although LTE is hugely diverse and adaptable, it does have a ‘favourite spectrum’, namely the 2.5GHz to 2.6GHz band. This means it’s subject to higher levels of attenuation (noise) and a lower range than 3G/HSPA and other technologies.” It also means the coverage area of LTE is smaller, making it increasingly difficult for telcos to build a financial model that works. While Ehmke says LTE can work in the 700-900MHz band, because there’s less traction for the technology between those frequencies, the equipment capable of operating within that spectrum will bear a price premium. “Chances are this will be a very different discussion in two years’ time,” he says.
“The next billion customers being connected to the Internet will not necessarily be using the next billion PCs to be connected to the Internet."
Similar issues to 3G Another reason LTE is not the perfect solution for Africa right now is that Telcos all recognise that voice revenues are under pressure and remain a massive portion of income made in the Africa markets. “Voice is an afterthought when it comes to LTE,” Ehmke says, “and having solid voice capabilities available in Africa is key. It’s far more difficult to build a business model based on a purely data service,” The terminal equipment is also too expensive. Ehmke says customers need to contend with average price tags of $150 for normal USB-type data modem for LTE and closer to the $300 mark for a router-type modem for a small office. “All of these factors make LTE too early for Africa,” he says, “and besides, there’s a huge amount of headroom that can still be extracted from 3G and HSPA.”
The headroom is there Ehmke says that this is also a more logical route for telcos to follow, since the majority of the 3G radio equipment available and being installed today is already capable of providing HSPA services. “All it takes is the telco licensing itself for that technology and bolting a handful of enhancements onto its infrastructure, like taking advantage of MIMO by adding more antennae elements,” he says. HSPA is also very capable of offering the kind of speeds and services that allow telcos to deliver ‘actual value’ to their markets. “The next billion customers being connected to the Internet will not necessarily be using the next billion PCs to be connected to the Internet,” he says. “Many of them will be engaging and experiencing the Internet over a mobile device – whether the experience is as trivial as a WAP browser embedded on a low-end cellular phone or a 3G-enabled
iPad type device. “And this leads me to believe that once the network has reached the 7.2Mbps mark – as is comfortably offered by HSDPA today – it reaches an inflection point in terms of what one can appreciate on a device that’s not a PC or a notebook. “I mean, we’re talking about devices with a maximum of ten inches worth of screen – and that’s too small a screen to appreciate or even need high definition visuals or sound,” he adds. “Considering this, even from an multimedia perspective, there’s little need for much faster connectivity than what our current networks have the headroom to provide,” he says. This substantially changes the way we need to think about things on the African continent. It makes it less about ‘keeping up with the Joneses’ than making sure today’s technology is capable of scaling linearly with what future demands are. And from the looks of things, the technology being installed by telcos is capable of just that. AT
Issue 6 2010
AFRICA TELECOMS 47
3GTECHNOLOGY O
By Lesley Stones
50 AFRICA TELECOMS Issue 6 2010
ne thing that really characterises the cellphone industry is how consistently wrong we are when we estimate its potential. Press archives are littered with now clearly ridiculous comments by industry players who massively underestimated its possibilities. Vodacom could win 150,000 subscribers by 2000, according to studies when Telkom was first setting up its mobile subsidiary. It took just four months to exceed that figure after it launched in 1994. Vodacom’s licence application was equally laughable: it forecast 320,000 subscribers within five years and 500,000 in a decade. Today it serves 40 million customers across five countries. Similar low expectations were set for SMS, yet long-time customers will remember how the networks jammed up every Christmas and New Year as millions of people sent greetings simultaneously. The obvious conclusion is never to underestimate people’s eagerness to stay in contact. That’s a lesson African operators must bear in mind as they decide whether to venture into 3G by upgrading their GSM networks that offer voice and basic text messages.
3G opens up a world of mobile internet access, video streaming, mobile banking and social networking. It also lets users link their computers to the data networks to access all those services on a bigger screen. But there’s a caveat: our extraordinary inability to forecast trends in the cellular market sometimes goes the other way too. Multimedia messaging (MMS) has been pretty much a global flop. Watching TV on a handset invokes apathy from most consumers, although operators and handset manufacturers have touted it as the next big thing for almost a decade. In Korea and some other Asian countries, mobile TV is highly popular, but that’s largely because people spend hours crammed into commuter trains and watching TV is easier than reading a newspaper when elbow room is at a premium. So while there’s a tendency to underestimate the demand for basic services, there’s an equal tendency to overestimate the demand for fancier applications. Perhaps that’s because they require dearer handsets and are more expensive to use. Or perhaps our natural inclination to communicate is satisfied by simply talking to one another or sending an SMS. It’s probably a combination of both, plus some distinctly African influences. One of those is the high illiteracy rate in some countries. There’s no point surfing the internet if you can’t read what it says. And since most online content is in English, it has limited relevance in a continent with hundreds of indigenous languages. Our working patterns are different too. Commuters need their wits about them on public transport, while those who commute by car shouldn’t be watching TV or surfing the internet on a handset anyway. Operators in other countries have also been caught out. The 3G spectrum auctions held around the world a few years ago brought many operators to their knees after they paid ludicrous licence fees then failed to cover their costs because consumer take-up for their services was apathetic. At least that lesson was taken to heart in Africa, where 3G licences are being sold for far more realistic prices. So operators must decide when – or even whether – to roll out 3G and offer a far wider range of data services when nobody knows just
“We just couldn’t make people use it, so I decided I would make it free, our SMS usage was completely exponential and they got into the habit.” how enthusiastic consumer response will be. There is certainly no need to rush, says World Wide Worx Strategy MD Steven Ambrose. In fact he believes that choosing not to launch 3G will help African operators to remain profitable despite serving low-spending users. “Although Africa is growing quickly for mobile devices, people look at Africa through the lenses of Europe, the US and Asia, which are highly industrialised first world countries,” he says. “People there take technology and what it does for granted, and forget that on the technology adoption curve African is way, way, way behind.” Mobile phones have done so well in Africa because of that basic need to communicate. So take-up is high but ARPUs are low because it doesn’t cost much to send an SMS or quickly call your family. Yet high-end services are right off the scale for Africans still struggling to cover their basic needs. “A lot of Africa has only recently obtained mobile technology so the killer apps are voice and SMS.” Ambrose expects the largest cities to get 3G coverage over the next three years as more international companies trade with Africa. But overall he predicts it will be three to five years before numerous 3G networks are active. “It will take about five years before demand for data services is big enough to become significant, and up to 10 years before it’s ubiquitous,” he warns. At one stage Africa was leading the field in cellular innovations. Vodacom was the first player to develop an efficient pre-paid billing system so it could serve customers unable to afford a longterm contract. Former Vodacom CEO Alan Knott-Craig drove that innovation as apartheid had left most black people without the documents necessary for a credit-worthy check, so they could not sign a post-paid contract. Another innovation was to stop charging customers to retrieve their voicemail, and to make that service free.
Want to know just how ridiculously wrong our predictions can be? Here’s an extract from a column published in the Cape Argus of 1993, written by David Biggs. “I can’t help chuckling when I listen to all the guff that’s being said about cellular telephones. We’re told in all seriousness that licences have been granted because these telephones will enable the small businessman to have a telephone at his vegetable stall or in his bakkie. People in squatter camps and informal townships will be able to have telephones at last. Plumbers and electricians will be able to keep in touch with their clients wherever they are. Come off it! These cellular telephones cost thousands of rands. Nobody in squatter camps is going to waste that sort of money and anybody serious about trying to earn a living as a small businessman has far more important things to spend thousands of rands on. He continued: “For most buyers they’re about as necessary as the hula
hoop, the yoyo and battery operated luminous socks.” That Cape Argus cutting is still a favourite souvenir of Vodacom’s former CEO Alan Knott-Craig. When he retired the company was worth more than R100 billion, and today it serves 40 million customers in five countries. Issue 6 2010
AFRICA TELECOMS 51
Yet Africa is now a follower, not a leader, as basic services have been installed and the world is exploring what else we can do with our handsets. That’s not a bad thing. It lets African players watch what works and what doesn’t work, and wait until technologies are mature and audience acceptance has been proven. Price certainly plays a part. Most people are just not willing to pay for a service before they are convinced they need it. A clear example was the initial lack of interest in SMS in South Africa. “We just couldn’t make people use it, so I decided I would make it free,” says Knott-Craig. Users were granted 15 free messages each month, right across the Christmas period. “Our SMS usage was completely exponential and they got into the habit.” When the fee was reintroduced the SMS rate inevitably plummeted by 25%. But within a month the level was back up again as people missed its ease and convenience and were now willing to pay. The crucial words there are ease and convenience. You could probably give many people mobile TV for free and they may use it, but for the average person it isn’t essential enough to pay for. That explains the success of mobile banking, where Africa still leads the way. Mobile banking fills a clear need, as the vast majority of Africans do not have a bank account, yet everybody needs to exchange money. Kenya’s Safaricom was a pioneer with M-PESA, which lets people transfer small amounts of cash to another person for a small fee. It’s admirably simple. The sender hands their money to one of 11,000 registered agents, who sends a credit note to the recipient’s cellphone. The recipient can redeem that credit via an agent who hands over the stipulated sum. The recipient does not even need to be on Safaricom’s network, although the sender does, which increases customer loyalty. M-PESA has about seven million users and 10,000 more register every day. Safaricom CEO Michael Joseph says the service has become a necessity to millions of Kenyans who have no banking facilities. “The growth has been phenomenal, beyond our expectations. It goes to prove that you can never go wrong with an innovation that provides a practical answer to customer needs.” A recent report by JBB Research confirmed that mobile payments, mobile internet access and ringtones are key areas of growth for Kenyan operators. It estimates that by 2013 the revenue from those will reach US$165 million, up from US$46 million in 2008. M-PESA’s runaway success could be emulated in every country if African operators are willing to offer that technology. It has the three magic ingredients – simplicity, affordability and usefulness. If any of these had been missing, the initiative would have failed. Another triumvirate that operators see as the holy grail is triple play – the merging of voice, data, and video services. That requires a sophisticated 3G network and reasonably sophisticated, affluent
52 AFRICA TELECOMS Issue 6 2010
users. It also demands relatively high-end handsets, creating a chicken-and-egg situation where operators can claim to be holding back because not enough people can afford the necessary handsets. But the cost of a handset falls with mass production, so manufacturers can argue there is no point in tailoring handsets for Africa when too few networks offer multimedia services. So far only about 25 of Africa’s countless players have ventured into 3G, says technology developer Qualcomm. Its rollout will provide access to information that can improve poor education and inadequate healthcare through applications such as video conferencing, says Alex Dadson, Qualcomm’s director of business development in West Africa. The obvious problem is that such services must be driven and funded by governments rather than the private sector, so how quickly or efficiently they will materialise is questionable. While many operators see bundled triple-play packages as key to subscriber growth and retention, they may be overestimating customer interest and loyalty. And they are almost certainly underestimating the degree to which the vital element of cost plays a role. A survey by KPMG found that 57 percent of users see an attractive price as the main reason for signing a bundled service contract. And most would readily switch to a rival network if they were offered a better price. The massive emphasis that consumers give to pricing for converged services should alarm the operators, said Carl Geppert, a partner in KPMG’s Americas Communications and Media Practice. Providers think triple-play packages will boost subscriber figures and loyalty through convenience and singlebill simplicity. But their customers just want a good deal. Moreover, consumers are universally unwilling to pay a premium for additional multimedia services on their phones. When asked how their use of instant messaging, games, multimedia, blogging, networking, news access or mobile shopping would change if the prices rose, roughly 70 percent would look for an alternative. However, KPMG concluded that consumers are not exactly the same around the world, so operators must be highly aware of their local markets. Asian consumers are the most willing to use their handsets as a multimedia device. They are also the most willing to pay, with nearly 30 percent happy to pay a slight premium for games, music and video downloads. Only eight percent of Americans are willing to consider even a minimal fee for multimedia services. That explains why mobile TV is flying in Asia but fails to turn on customers elsewhere. Predicting what will happen in African markets is impossible, as the catastrophically wrong guestimates throughout the industry’s short history have already proved. But the one key to success is that crucial combination of simplicity, affordability and necessity. AT
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with Jaime Dickinson President, Newcom International Congratulations on your prestigious award from WTA as Teleport Executive of the Year. Can you give our readers some insight into the teleport sector and why NewCom International is one of the fastest growing companies in the sector? The teleport sector is a growing business in the regions we cover and there are huge opportunities, particularly in niche markets. A lot of people have no idea what the teleport industry is about. They think antennas and television. Teleports are platforms that deliver telecom solutions via satellite. At NewCom, we are more than a teleport. We are a service provider and integrator of numerous value-added solutions that extend the US backbone to various countries.
Can you explain how NewCom International can bring added value to satellite carriers, fibre providers, technology providers, systems integrators, and a broad variety of specialized service providers? We offer added value through our quick response times, our efficiencies as an organization and as a comprehensive solutions provider. Throughout the continent, and particularly in Nigeria, people are desperate for integrated
54 AFRICA TELECOMS Issue 6 2010
solutions such as video streaming and content. We sell the transport of voice and data that is so critical in today’s market, but we also provide the value-added services that everyone wants. I was in Nigeria when the Iceland ash cloud caused such disruption to travel. I happened to be demonstrating our video conferencing and collaboration tools and everyone was clamouring for it.
In the last issue of Africa Telecoms, we focused on satellite and fibre in Africa. Do you think that these communication technologies will work together concurrently in the future or will one or the other dominate in the African context? I think they will have to work hand in hand. In Latin America, for example, fibre networks already go to all the major cities – which is critical because of the huge amount of bandwidth they can bring. But the cities only make up 30 percent of the country. To reach the rural 70 percent, the only solution is satellite. It would take considerable time and money to have fibre going to those areas. And although fibre exists in the cities, it isn’t very reliable, making satellite backups critical. In some cases, satellite is the primary solution. I see Africa going the same way. Today, due to lack of fibre infrastructure,
satellite is the dominating force. But fibre will come because it brings the bandwidth required to help developing countries make big changes. Integrating the connectivity with satellite gives carriers full country coverage because it doesn’t make sense to route networks to remote areas. And beyond the huge cost factor is the problem of maintaining fibre lines: thieves dig them up, thinking they are copper.
How extensive are NewCom’s operations in Africa? With the recent activation of the AMOS5-i satellite in England, NewCom now offers extensive satellite C band coverage across Africa. NewCom, which has been a leading provider of satellite services for governments, vertical markets and GSM operators in Northwestern and Central Africa, now has full reach into Eastern Africa and extended coverage throughout the Central and Southern region.
What do you think the differentiators are between satellite and fibre connectivity? Satellite connectivity isn’t affected by natural or man-made disasters. Obtaining service is a matter of pointing an antenna.
Fibre connectivity is at the whim of disasters or other issues and can often go down. In Lagos, Nigeria the sat-3 fibre goes down at least four days a month. As a result, many corporations have installed satellite hubs for backup protection. Fibre can facilitate huge amounts of bandwidth for large cities. While satellite will continue to be the primary source of connectivity for the next five years, I see fibre becoming the main pipe into large cities – with satellite reaching out to the remaining 70 percent.
While NewCom has been a provider of satellite communications in Africa, to what extent is the continent still a focus area? What are the strategic focuses for NewCom in the region? Africa is our main focus because the bandwidth requirements are huge as fibre does not provide full coverage. It comes down to supply and demand, and right now there is huge demand in Africa for our services. Our strategic focuses for the region are to support governments through initiatives in education, health, border patrol and the military; vertical markets like offshore gas and oil rigs; and GSM operators. The cellular market is the fastest growing telecom market in the region.
Historically, satellite communication has understandably always been more expensive than other options. How do you plan to become more price competitive? Is it possible to reduce costs as you build capacity and the number of satellites in service? The answer is yes. In the past five years, there has been a lot of focus on developing technologies to bring more cost-effective solutions to the region. Especially with the depressed market and economy, we at NewCom have been investing in technologies involving megahertz that create efficiency. Because of these solutions, MB pricing has dropped 70 percent over the past five years, making it possible for more people to use voice and data. But now I think we are at the
“Right now, the priority throughout Africa is voice and data, but once that is in place, it will be content. People are hungry for content.” bottom of the pricing curve because we’ve maximized the efficiencies the existing technologies provide.
Can we envisage a time when satellite prices per MB could be comparable to fibre prices? Never. Why? Because the demand for satellite will continue to increase. The priority throughout Africa is voice and data, but once that is in place, it will be content. People are hungry for content. In some places in Africa, there are only two TV stations available. Satellite is the most efficient way to deliver video content and there will never be enough satellites to meet the demand, so the price will increase. That’s the case in Latin America.
Considering the economic climate in the past 12-18 months, NewCom has performed remarkably well. To what do you ascribe this success? There are several factors. The first one is cost efficiencies. We have a lean, experienced staff conscious of keeping down operations costs; and we have implemented bandwidth optimization technologies that allow us to be
competitive. The value-added solutions that we have integrated with our different transport platforms have made us more ingrained with the end user because we offer solutions that other providers don’t have – and sometimes that’s the key. I think our commitment to customer service and getting the job done quickly has also played a role in our success. Finally, it has to do with relationships. We receive great word-of-mouth referrals from people in the region whom we’ve worked with and known for many years.
What are the main drivers of demand for capacity in Africa and how do you see this evolving over the next few years? Right now it’s voice and data, but it will move into video and other content because a lot of multinationals from Europe are coming into the region to facilitate the massive build-out taking place due to the rich reserves of oil and gas. These people demand high-quality content services, which will drive the demand for satellite.
How much of NewCom’s African capacity is utilized for cellular backhaul? Currently only 10 -15 percent, although we are actively growing that area.
How have recent events in Haiti and Chile highlighted NewCom’s emergency response and disaster recovery services? In both Haiti and Chile we were able to serve the needs of people that required services immediately. We managed to provided connectivity for voice, data and email, either the same day or the day after. Fibre breaks can take weeks to fix, while satellite is not affected by anything happening on the ground. We just point an antenna to a satellite and they are connected. Satellite services enabled broadcasters to report live from those earthquake-devastated countries within hours of the tragic events. AT
Issue 6 2010 AFRICA TELECOMS 55
56 AFRICA TELECOMS Issue 6 2010
RascomStar QAF mission RascomStar-QAF is a pan-African telecommunication company with a mandate from RASCOM (Regional African Satellite Communication Organization) through an execution agreement to provide the African continent with satellite telecommunication services for Pan-African connectivity and coverage for rural communities and remote areas.
F
or the fulfilment of this mandate, RascomStar-QAF launched its first satellite in December 2007. This three-year reduced lifetime satellite is capable of providing bandwidth lease services as well as innovative services specifically destined for the African continent using tailored systems, with the build-out of two state-of-the-art satellite communication systems to respond to the needs of African telecommunication operators (ATOs) and address two specific market segments.
Two systems to respond to ATOs’ needs The first system will carry aggregated pan-African telephony and IP connections between countries and allow ATOs to establish direct links and benefit from an integrated solution for their international and national connectivity. Once opened, this pan-African connectivity system will connect regional and/ or national capitals in all African countries, using at least one or more gateways in each African country. ATOs will then be able to provide national and pan-African telephony and data services without transiting through costly extra-continental networks, thereby benefiting from substantial savings. For an optimum operation of this system, RascomStar-QAF will provide ATOs with quality control and system integrity through 24/7 support, and a managed maintenance programme that secures the system’s functionality at high-performance standards. The objective of this pan-African connectivity initiative is to connect all countries and regions of the African continent and to fulfil the historic mission entrusted to RASCOM by the African states to provide satellite-based connectivity to all African countries. The second system will address the ATOs’ needs to cover their territories using an access communication system and provide access telecommunication services to
Issue 6 2010
AFRICA TELECOMS 57
rural communities and remote areas that have not yet been addressed by existing telecommunication operators. The aim of this system is to expand rural telecommunication access across the African continent using RascomStar-QAF VSAT terminals and gateways. The construction and deployment of this infrastructure will enable RascomStar-QAF to establish a modern African network operation standard that has not yet been fulfilled elsewhere in the global marketplace. For this accomplishment, RascomStar-QAF will rely on resources within Africa to realize its mission of delivering affordable telecommunication services, aiming at making universal access to telecommunication services a reality and sustaining the development of information and communication technologies throughout the continent. C-BAND CONT COVERAGE PLANNED INNER OUTER
G/T -4.0 dB / K -6.0 dB / K
EIRP 41.0 dBW 39.5 dBW
satellite coverage in C and Ku bands to ensure that all remote areas are covered.
A sustainable business model Basically, the market segments targeted by RascomStar-QAF are not profitable for telecom providers due to the low traffic involved in panAfrican connectivity-thin routes and rural communications. In the past, this has been the reason for the absence of telecommunication solutions in these market segments. For its solutions to be sustainable, RascomStar-QAF has implemented a viable business model in which telecom operators will pay for services based on their utilization. This model, which is applicable to both market segments, will allow ATOs to overcome the difficulty of covering the satellite opex that is one of the main stumbling blocks to profitability. The strength of this business model is the fact that, because of its regional mission emanating from the RASCOM convention, the RascomStar-QAF strategy is to aggregate traffic from all African countries into one network, thus providing Africa with a regional and integrated solution. AT Next satellite launch
KU-BAND COVERAGE ZONES LEVEL 1 LEVEL 2
G/T 0.0 dB / K -2.0 dB / K
EIRP 47.5 dBW 45.5 dBW
To ensure continuity of service and a comprehensive development of satellite telecom activities throughout Africa, RascomStar-QAF has undertaken to launch its next satellite in early June 2010. This satellite will be positioned at 2.9째E, with a total coverage of the continent in C and Ku bands.
A complement to the existing telecommunication network The objective of RascomStar-QAF innovative solutions is to address a market that is assumed to be non-profitable when it is considered in the scope of one country due to limited incurred traffic. Thanks to the RASCOM convention and operating agreement, the RascomStarQAF strategy is to aggregate the needs of all ATOs. The pan-African connectivity system is not addressing traffic from direct communication links but only traffic that is transiting outside the continent. Pan-African connectivity is not competing with existing solutions directly connecting ATOs, but is a complement to the existing network because most African countries are not directly connected. Also, while most rural solutions target mainly highdensity populations, the RascomStar-QAF rural solution is meant for low-density populations. It provides low-cost telephony and Internet access to and from isolated or rural locations equipped with low-power and solarenabled terminals. This also demonstrates that RascomStar-QAF is not competing with existing telecom services but is rather providing complementary services that have not yet become a reality throughout Africa. For this purpose, the solution has endeavoured to provide continental
58 AFRICA TELECOMS Issue 6 2010
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James Munn, Vice president, Business Development, Sub Sahara Africa tandard 2G voice technology has served Africa well by giving millions of people their first taste of connectivity. But it’s becoming outdated and expensive to deploy as newer technologies inevitably do more and reach further – for less capital outlay. More importantly, 2G simply cannot handle the plethora of new data services being developed to turn simple cell phones into powerful computers that are changing lives by delivering a massive range of social, business, health and educational services.
Africa is in the perfect position to benefit enormously from 3G, and technology company Qualcomm is working to make it happen. The most compelling reason to roll out 3G
is that basic voice calls have become a commodity with falling profit margins, so operators must diversify their revenue streams through mobile data services, says James Munn, Qualcomm’s vice president of business development for Sub-Sahara Africa. Another reason is that even in a continent where millions have yet to make a phone call, sophisticated consumers are already familiar with mobile internet services and now expect their service providers to offer more value-added applications.
60 AFRICA TELECOMS Issue 6 2010
When it comes to boosting profits and satisfying increasingly sophisticated consumers, savvy operators are turning to 3G as the answer. “With the value-added services that 3G enables, a handset isn’t just for making a call or sending an SMS anymore,” says Munn. “It’s a tool that provides a lot more, like banking, mobile games, location-based services and social networking. 3G technology is great, but it’s what it can lead to that’s really exciting. It lets lowincome people do things they have never been able to do before because they couldn’t get to a computer.” Telecommunications can address problems such as poor education and a lack of healthcare expertise, agrees Alex Dadson, director of business development in West Africa. To accomplish this, networks need the capacity to handle bandwidth-hungry applications such as video conferencing, large file transfers and real-time collaboration on documents by people in different locations, using 3G’s high speeds and lower cost of delivery. Wireless communications can dramatically improve the education, medical care and social services available in emerging markets, resulting in a better quality of life. Yet so far only about 25 of Africa’s GSM operators have launched 3G. Value-added services driving the switch include: Mobile Internet Access: Cellphones are far more widespread than computers in emerging markets, and fast 3G connections, reasonable tariffs and easy-to-use micro-browsers that need little memory make this a viable alternative. Kenya’s Safaricom, for example, has an Instant Internet service that offers pushemail, organiser applications and icons for launching email and Facebook. Better still, it works on basic handsets as well as smartphones. In fledgling democracies, 3G could allow short video clips to be transmitted to handsets to educate people about why it is crucial to cast their vote. Access to 3G has also empowered farmers in rural areas. Farmers can use 3G to access information that is critical to their success, e.g. the latest weather information (rains, drought forecasts, etc) and the latest farming technologies to increase crop yields and market price index for their produce. (Learn more about Safaricom’s ‘Kilimo Salama’ project at www.standardmedia.co.ke). No matter which 3G flavour an operator deploys (CDMA or WCDMA/UMTS), they gain the
footprint of data-intensive services, yet allows a 60% reduction in cell sites, making it ideal for rural as well as urban areas. New deep-sea cables along Africa’s east and west coasts also play a role by finally delivering plentiful and more affordable international bandwidth. Different countries are at different stages of 3G adoption, with South Africa leading the way, and Kenya, Nigeria, Tanzania, Ghana, Namibia and Botswana also well covered. Madagascar, Uganda, Rwanda and Angola are coming on board, too. A dramatic drop in the cost of 3G handsets and modems is spurring the migration to this faster and more efficient technology. Modems now cost US$50 compared to US$100 a year ago, and low-end notebook computers are available for US$100. Globally, the roll out of 3G is phenomenal, and that too is encouraging Africa to follow suit. There are now roughly 4.6-billion wireless subscribers in the world, and one billion of them use 3G. More than 85% of mobile operators have launched 3G, and the number of 3G customers is expected to hit a massive 2.7-billion by 2014. Yet Africa lags woefully behind. “Telecommunications can help to address social and economic problems — so Africa is more than ready,” says Dadson. “3G technology will improve banking, education and healthcare in Africa. It’s long overdue.” The inevitable move to 3G is gaining momentum, with subscribers growing a staggering 100% year-on-year. “The success stories we have seen in countries including Kenya and South Africa are strongly compelling reasons for other operators to look at this seriously,” says Munn. Operators that recognise the opportunity first can gain a massive competitive advantage by offering Internet access and multimedia services that consumers now see as essential, not as optional extras. AT
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ability to provide this broad range of value-added services that increase user spending and cement customer loyalty. Qualcomm is underwriting Africa’s migration to 3G because every 3G device contains a chipset that is either manufactured by Qualcomm or contains its essential CDMA technology patents, no matter whether Ericsson, Huawei, Nokia or another vendor supplies the equipment. Qualcomm is also actively training engineers from numerous operators to develop and manage radio access networks. This is crucial in Africa because many countries lack the skills to effectively deploy the latest networks. Qualcomm is keen to train more African operators, so it is actively recruiting technicians to boost its educational capacity. African players also benefit from Qualcomm’s global resources, with engineers frequently flown out from the US, Europe and India to help optimise their networks. The company is also opening offices across Africa and actively assisting governments as they develop spectrum allocation policies to help leapfrog the technology divide. Even though Qualcomm is constantly striving to develop faster speeds and wider coverage capacity for 3G, the technologies are mature enough for operators to be confident it will not be superseded by new developments that render their investments redundant. Every progression will be backwards compatible, so operators can increase their speeds, capacity and coverage incrementally — without ripping out existing equipment. 3G also allows operators that have invested heavily in infrastructure to carry more voice traffic per base station than GSM. It now operates in the 900MHz spectrum, which has larger coverage than the 2.1MHz band. The 900MHz band is usually occupied by GSM 900 systems, but its spectrum can be “refarmed” to take advantage of UMTS 900. That increases the
IP- PEERING FEDERATION
FOR SOUTH AFRICA
D emocratising Telecoms I n S outh A frica ...
and beyond
Partnership Will Help Operators in Emerging Market Offer VoIP and Next-Generation Services Easily and Cost-Effectively.
JOHANNESBURG, South Africa – Multisource, the South African wireless services provider, and London-based XConnect, providing next-generation interconnection and carrier ENUM-registry services, have formed a partnership to help South African service providers take advantage of growing opportunities in the country’s increasinglycompetitive telecommunications market.
AN INTERNATIONAL ALLIANCE
The partnership, known as XConnect SA, will establish a multilateral peering federation, which will offer operators advanced VoIP and next-generation network (NGN) peering capabilities via an in-country interconnection hub. The Federation will provide a simple, cost-effective means for exchanging traffic within Southern Africa and globally. The newly appointed CEO of XConnect SA, Christopher Geerdts, said the partnership underpins the principles of Interconnect
64 AFRICA TELECOMS Issue 6 2010
2.0, ushering in the next generation of VoIP in South Africa. “Our vision is to democratise voice and multimedia communications by empowering telecommunications players to focus on growing their core businesses whilst reducing barriers of complexity and costs,” he said. He added that one of the key benefits of Interconnect 2.0 is the ‘IP-all-the-way’ principle, which ensures that the quality of calls is maintained and multimedia services can be fully utilised. The Federation services will be launched in May, enabling operators to interconnect their networks and to route calls seamlessly and efficiently through a scalable, multilateral interconnection hub. This single regional hub, enabling multi-lateral IP Interconnection and Peering is based in Telehouse at Teraco in Johannesburg. The single hub will offer, for the first time in Africa, two significant and primary benefits, namely a single point of interconnection between all providers, and
subsequently policy management of the interconnection point for those service providers. This considerably reduces the overall costs of managing a complex set of interconnections, in addition to managing interoperability issues between protocols, particularly when set within the imminent multimedia and High Definition (HD) voice environment.With fibre connectivity bringing the possibility of more and improved services, at lower
costs, South Africa is on the cusp of a genuine democratisation of its telecoms environment, and a paradigm shift from simply a VoIP environment to a SoIP (Services over Internet Protocol) landscape. The possibility of HD voice and improved multimedia services become a reality through the creation of this single regional hub.
THE 2008 ALTECH RULING THE IMPLICATIONS FOR AFRICA
The 2008 Altech Ruling by the South African High Court, under Judge Davis heralded the era of true liberalization for the country’s telecom sector. The Transvaal Division of the High Court ruled in favour of an urgent application brought by Altech Autopage Cellular on the question of whether VANS are allowed to self-provide (build their own networks or lease these facilities from companies such as Telkom). “It is declared that the applicant [Altech Autopage] was entitled to self-provide its own telecommunications facilities from 1 February 2005,” acting judge AJ Davis wrote in his judgment. The South African landscape shifted from 2 fixed, and 3 mobile providers (Telkom, Neotel, Vodacom, MTN and Cell C) to up to six hundred fully converged license holders with provisioning rights). According to Alison Gillwald, Director, Research ICT Africa!, The EDGE Institute, “The judgement cuts through the defence of the Ministry and ICASA that any automatic granting of network licences to former VANS operators would result in absurd proliferation of network providers that was not sustainable in terms of the scarce resources required to do so.” This he points out, is simply not correct. Only spectrum is scarce and it is anyway licensed separately. The real cost of building and operating a network would anyway inhibit all 600 potential applicants from operating a network. The benefits to the consumer cannot be under estimated, yet an immediate constraint becomes the ability of multiple service providers to interconnect, and the regulations thereof. ICASA’s Regulations on Interconnect specifies that all providers must interconnect upon request, by law. The days of bi-lateral interconnections are numbered with the requirement for a shift to multi-lateral agreements becoming essential. Issue 6 2010 AFRICA TELECOMS 65
In April 2010, U.S. VoIP service providers offering highdefinition (HD) voice services participated in a trial of the world’s first IP-peering federation created for exchanging HD voice traffic. HD voice reproduces human speech with substantially greater clarity, depth and nuance, using codecs that capture more than double the frequency range of traditional circuit-switched calls while generally requiring less bandwidth. The rich, naturalsounding quality of HD voice calls often is likened to that of face-to-face conversations. As a result, fixed, mobile and Web 2.0 service providers are increasingly adopting HD voice as an added value because it enables superior-quality voice communications compared with those supported by the legacy PSTN. However, most HD voice services today are available only within a given operator’s network. Global utilisation of HD voice will require crossnetwork calling, with the entire call path and all endpoints supporting the rich features. The Global Alliance of Federations was set up to enable this. XConnect CEO Eli Katz comments: “Our Interconnect 2.0 services are ideally suited to helping operators in South Africa overcome the challenges of next-generation interconnection and peering. The federation will enable easy interworking and interoperability between fixed, mobile and Web 2.0 networks.” The Global Alliance enables members to deliver advanced IP services across regional and global networks, as well as decrease costs and increase service quality. In addition to reducing termination costs, service providers are spared the considerable time and resource allocations of establishing and maintaining separate interconnection agreements with each of numerous providers. End-to-end IP interconnection also allows for higher call 66 AFRICA TELECOMS Issue 6 2010
quality than the PSTN can support, as well as multimedia features. “With the proliferation of IP and VoIP players, the complexities and associated costs of interconnecting operators and telecommunication networks have become central concerns for South African service providers,” said Multisource CEO Richard Smuts-Steyn. “To compete successfully in our country’s emerging telecoms market, operators need a secure and scalable point of interconnection and the comprehensive services our federation will offer.”
WHAT THE FUTURE HOLDS
“As we enter an era of explosive growth in South Africa’s VoIP market, in terms of services and complexity, service providers are looking for solutions that can offer more cost-effective ways of communicating and carry the functionally rich bouquet of multimedia communications from end to end,” he added. Smuts-Steyn noted that interconnectivity extends beyond traditional voice connections to include the multimedia environment. For example, he said: “When you talk with someone on Skype, you are able to use both voice and video. When you break out of the Skype environment and connect to a cell phone, you lose the valueadded video connectivity. This is because many networks do not support the complexity of multimedia interconnection. The new federation will provide technically elegant interconnect across all mediums.”The ultimate goal of this partnership is to create a virtual network and provide regional services that instantly integrate with all networks globally, and create a truly global service similar to markets in Europe, North America and the Far East. Within a regional context, the agreement keeps Africa at the forefront of developments in ICT and ensures that the momentum of the last decade towards ICT’s as enablers of development and change remains unabated. AT
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May 2010 AFRICA TELECOMS 59
S
finding the virtual subscriber What lead Movius to discover the next big thing in communication... a desire to connect the millions of unconnected people out there, bridging the digital divide and making everyone reachable. By andy minnaar
68 AFRICA TELECOMS Issue 6 2010
o, what is a virtual subscriber? Virtual means hypothetical or envisioned but not real (yet). That’s it! These are people that do not own their own phone, line or SIM, and therefore are not permanently connected to a network! Yet these are people who need communication, just like everyone else. Today, these people use public phones, pay phones, and friend’s phones to communicate. But how do they ‘get connected’ and have the ability to be reached, just like the many that have the privilege of telephony services? Back in 2002, this need became apparent in a small, mountainous country in Africa. Mobile networks were being rolled out, overcoming the treacherous terrain and typical obstacles that have hampered fixed line services globally. And yet, with a population of just over a million people, so few people could afford a phone. A small team from Movius working with a mobile operator realized, ‘if we could provide a phone number to each person that lives in this country and they can get to a phone and receive messages, or voice grams that they could understand; this would be fantastic.’ Everyone can get connected and there will be no language barriers, or literacy issues. But you may say ‘nothing new here? Virtual telephony has been around for decades, receiving non-real time voice, in the form of voice messages is old hat’. While this is true, the solutions have not been designed to meet the specific needs of this market. The Movius team realized the innate desire for these aspirant people to communicate back instantly and affordably. This is how the concept of a true ‘virtual telephony service’ was born. What if a ‘virtual subscriber’ could go to a public phone, or a friend’s phone, and make a free call to their own account, make prepaid calls and receive messages in the form of voice grams? Would this not be a great service! And so the team went to work and started designing this ‘virtual service’. There were many obstacles to overcome; technology was immature, costs were high, operators were so busy delivering mobile SIM based services that there was very little interest in investment in the so
called bottom of the pyramid (BOP) market. Why invest money in low ARPU customers when you cannot deliver services rapidly enough for the high demand pre and postpaid markets with much better returns? The Movius team persevered and realised that the time for the ‘virtual service’ would come. Markets would reach high penetration points, things would change… and they did! One of the biggest hurdles Movius had to overcome is the cost per subscriber of the prepaid account. With the very low ARPU’s projected for this demographic, shear cost and the profitability of sustaining a service becomes a big question. Businesses are driven by profits. Operators are no different. There are the network overheads, equipment costs, distribution, logistics, education and many more factors to consider. Technology back in 2002 was immature, costs much higher, but above this all, the operators were so busy servicing massive demand that there was just no focus on the low end market. Through perseverance and evolution in market demand, the dedicated Movius team made the breakthrough in 2009, seven years after the original inception of the project! A visionary operator in Africa, with much experience and knowledge of the business, saw the opportunity and decided the time is right to move on that aspirant part of the community, the ‘Virtual Subscriber’. Those that want a service, but may not be able to afford a mobile phone or a land line service for that matter. Or, simply may not have coverage or access because they live rurally. If you live in a village without power, how do you charge a handset, even if you can afford one? Schools and colleges typically do not want students carrying phones; on some campuses mobile phones are banned. Old people, young people, all need communication; owning or carrying the phone may not be practical or the answer for them. So what if we make it possible for this demographic of the population to purchase a phone number, a prepaid account and the ability to retrieve non real time voice in the form of ‘voice grams’ or messages? And this number can be accessed and used from any phone. Not just a mobile with a SIM. Access can be from a land line, a payphone, village phone, any phone connected to a network! Would that not open communication to everyone and make them reachable? This is the value proposition that this ‘visionary operator’ saw and embraced. There are shared phone solutions out there today. This is where a virtual number can be opened on a SIM owned by another party and the sharing of a phone can take place. But what ‘the operator’ saw in the Movius solution is a far more ubiquitous
approach. A solution ‘where any phone can be used to access the service’. There are no restrictions! No sharing of SIMS or opening a number on another individual’s private SIM. No commands to open and close the virtual account. Simply dial the network short code from any phone, mobile, fixed or other and you reach your personal service. The service welcomes you, in your language, authenticates you and offers you your services. Once connected the handset becomes the connection point to the network, the virtual subscriber is now in session and can make calls and receive voice grams like any other subscriber, but from their own account. There is no cost of a phone, SIM or network based prepaid account. That sounds very interesting, but how is this offered as a prepaid service by the operator? This was the most difficult hurdle for Movius to overcome, the cost and complexity of the operators IN based prepaid system, designed for a higher ARPU subscriber base is a barrier to entry for the low ARPU demographic. For this very reason Movius took the decision to design and implement an onboard prepaid application; tailor made for this the virtual subscriber service. Movius partnered with a highly experienced billing application development partner and came up with the ideal solution. A low cost, fully integrated charging function. This integrates with the operators existing platforms for accounting, voucher management and topup; takes care of the virtual subscriber requirements perfectly. Rate planning and implementation can be tailored to the virtual subscriber market needs. There is no negative impact or added cost to the existing prepaid infrastructures. Operators are not dependent on the existing prepaid systems already in place. In this way the operator is able to grow market share and at the same time give back to a demographic that is much in need of basic services, cost effectively. This opens a new previously unreachable market segment for the operators. This approach makes it possible to breach the ‘cost to entry’ barrier and lowers the ARPU requirement for the operator to offer a viable and effective service for that massive aspirant market with the need to communicate, but do not necessarily the money or access to own their own line or handset. So, what’s Next? The first launch of this service is being finalized now. The marketing team at the carrier is finalizing test market plans and launch strategies. The stage is set; the time to turn up and go is at hand. Trials will roll out in strategic market segments. Much excitement is building as all parties prepare to bring basic communication and reach-ability to the aspirant millions that are still without basic services. AT
Schools and colleges typically do not want students carrying phones; on some campuses mobile phones are banned.
70 AFRICA TELECOMS Issue 6 2010
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THE LAST WORD
Apple Security vs. German Beer – and the Germans Win with their famous Brew So The latest incident in the ongoing saga of technology being leaked or lost prior to release continues. This time it is the fortress Apple's ‘security’ that was breached, beaten by a local German Brew: Beer from Gourmet Haus Staudt in Redwood City, California. Who would have thought that with all of Apple’s security procedures, the company would be wrongfooted by a few beers. The unfortunate culprit in this mix is Apple Engineer Gray Powell. The story goes as follows. Powell was out having a few brews with some friends celebrating his 27th birthday and surely one he will never forget. Now, Powell leaves the bar after consuming what must have been his fair share of the restaurant specialty German Beer, leaving his iPhone on the bar counter. A fellow patron sits down where Powell was, and notices the iPhone laying on the bar and gives it to the person sitting next to him assuming he was a friend of Mr. Powell. How wrong he was. Following a game of pin the iPhone to its owner, the fellow who had been sitting next to Powell throughout the evening decided in his inebriated state to check Facebook. Low and behold there was Mr. Gray Powell, Apple Engineer, and the proud owner of the phone. On Mr. Powell’s final posting he explained "I underestimated how good German beer is." If only at this point had he realized how much he had actually underestimated how good the beverage really was and what a storm it was going to create. Waking up the next morning and apparently feeling
worse for wear, the finder of Mr. Powell’s phone realizes he still has the phone. Remembering that Gray Powell was an Apple Engineer, he tries to contact Apple to let them know that he has the phone and cannot get through to Mr. Powell to inform him. By this time however, the phone could not be accessed as it had been remotely shut down by Apple’s MobileMe, that was able to shut down and wipe clean the iPhone remotely. At this point the details get smudged as to how Gizmodo (a gadgets and technology website) got their hands on this precious iPhone. After lengthy investigation and dismantling of the device, Gizmodo realized that what they were holding in their possession was no ordinary iPhone 3GS, but a prototype for new 4G iPhone with additional features such a Front-facing video chat camera, improved regular back-camera (the lens is quite noticeably larger than the iPhone 3GS), Camera flash, and Micro-SIM instead of standard SIM (similar to the iPad). The story remains unfinished as the issue is now undergoing criminal investigation, with homes being raided and electronic equipment being seized and confiscated. In the end, what was a celebratory birthday night out, has become a PR disaster for Apple, a nightmare for Mr. Powell and a possible prosecution against Gizmodo. The alternative view is that this has been a major PR coup for all involved, keeping consumers ever hungry for Apple’s new products. The truth is out there somewhere, probably at the bottom of a glass of beer. AT
THE AUTHOR | Bradley Shaw is the managing editor of Africa Telecoms Magazine
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