Bharti Finally Takes Over Zain

Bharti’s profit driven ambitions have them close a deal to take over Zain and perhaps a large portion of Africa’s Telecome market. However, is this a good thing for the African Customer? Time will tell but Bharti’s ambitions seek a $5 Billion Profit…

Bharti closes $9 billion Zain Africa deal -Reuters
“…Bharti aims to have 100 million subscribers and $5 billion a year in revenue in Africa by 2012/13, Manoj Kohli, chief executive of its international unit, said on Tuesday. Currently Zain Africa has 42 million subscribers and an annual revenue of $3.6 billion. Zain said in a statement on Tuesday it has received $7.87 billion from Bharti and will receive a further $400 million within 12 months after completing other formal requirements. It will also receive another $700 million after one year of the deal closing, as agreed in March. In return Bharti gets the Kuwaiti company’s mobile operations in 15 African countries, making it India’s second biggest overseas acquisition after Tata Steel’s (TISC.BO) $13 billion buy of Corus in 2007. The Indian telecoms market leader is facing ferocious competition at home and betting on opportunities in Africa are worth the risks of operating there, analysts say, even though some regard the deal’s total enterprise value of $10.7 billion including the assumption of $1.7 billion debt as a full price…”

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South Africa’ IT Performance Shows IT Growth in Africa

South Africa Information Technology Report Q2 2010 (Business Monitor International)
Companies and Markets | 07 Apr 2010

Market Overview ; South African IT spending is expected to increase from US$9.5bn in 2010 to around US$14.4bn in 2014, faster than real GDP growth. Despite an expected slowdown in investment associated with the 2010 FIFA World Cup, there should be opportunities for vendors across several sectors of a steadily growing South African IT market during our five-year forecast period. The 2010-2014 South African IT market compound annual growth rate (CAGR) is projected to be in the region of 11%, as a number of IT infrastructure projects generate spending at federal and provincial levels. Much spending in key IT verticals such as telecoms, banking and mining will be driven by factors internal to those sectors. The IT market fundamentals of sub-10% PC penetration, rising incomes and falling prices also underpin our growth forecast.

A successful hosting of the 2010 FIFA World Cup could be expected to attract more foreign investment. The IT market will also be driven by a continued improvement in South Africa’s ICT infrastructure and bandwidth availability. 2009 saw steep falls in the cost of ADSL services, which declined by as much as 80% in some areas, bringing broadband internet within reach of a wider proportion of South Africans.

Industry Developments The Department of Home Affairs (DHA) has announced that it will spend more than SAR500mn on IT projects in the current financial year. The objectives include improving service delivery and immigration services and fighting corruption. IT projects will receive ZAR514mn in 2009, with this allocation growing to ZAR652mn in 2010/11.

The 2010 World Cup has had an impact, not only in terms of investments in IT systems directly linked to the event, but those driven by associated investments in areas such as infrastructure. Meanwhile, in the run-up to 2010, the licensing of a second national telecoms operator will provide opportunities for operators. In Gauteng, new technology is being used to improve policing and education, put more services such as driver’s licence booking online and automate healthcare records. Following her appointment in 2009 to the Open Source Software Standing Committee, Nthabiseng Mosupye, the director of information services at the Department of Public Works, called for a renewed drive to implement the government mandate of 2005, which saw all government departments making use of free open source software.

Competitive Landscape Government figures have estimated that Microsoft accounts for around one-third of national spending on software licences. In 2010, the software market leader hopes that sales of its Windows 7 operating system, launched in October 2009, will boost its sales in South Africa. Microsoft announced last year that four Microsoft Innovation Centres will be built in Africa in the next two years, two of them in South Africa.

Most of the major multinational IT services players have African regional headquarters in South Africa. In September 2009, IBM opened an Africa Innovation Centre in Cape Town, which the company hoped would act as a driver to grow its customer and business partner network in South Africa. The US company has expanded its local partner community by 200% since early 2008. Despite the tough economic conditions, PC vendors have strengthened their presence in the market with new distribution agreements and partnerships. In 2009 Korean company Samsung appointed local information and communication technology (ICT) distributor Rectron as distributor for its entire line of IT products. HP appointed local company LetMeRepair as a new authorised Home Product Service Partner for in and out of warranty repairs of its PC range.

Computer Sales
South Africa’s computer hardware market is forecast to grow to at a CAGR of 11% over the next few years from an estimated US$4.1bn in 2010 to US$6.3bn in 2014. In 2009, sales were hit by sluggish retail demand, with the wholesale and retail trade sector contracting. The main growth drivers during our five-year forecast period include rising computer penetration, falling prices and vendor and retailer promotions, and the popularity of notebook computers and ultra-light products. In the past few years, falling prices have helped boost PC unit shipments, along with aggressive retail promotions. In 2009, the popularity of low-cost netbooks gave further momentum to this trend. Netbooks are now available from online stores such as kalahari.net and ngrcomputers.co.za for as little as SAR3300, breaking new territory for affordability.

Software
The software market is forecast at around US$1.8mn in 2010 and, despite current economic headwinds, is projected to have a CAGR of around 11% over the 2010-2014 period. South Africa’s software market is developing, despite the problem of software piracy, which still accounts for around 36% of software. The growing regional ambitions of South African companies will be a factor driving corporate spending on software, but vendors will have to meet increasing demand for vertical-specific applications. The economic slowdown represents a challenge to software vendors, as enterprises are tempted to focus more on the bottom line. This situation is likely to lead to further consideration of open source solutions in some sectors. Meanwhile, the progress of the software-as-a-service (SaaS) model in South Africa should receive a boost from projected improvements in South Africa’s broadband infrastructure.

IT Services
The IT services market is projected at around US$3.5bn in 2010 and is expected to grow to around US$5.3bn in 2014. The 2010 World Cup and other major infrastructure and transport projects provide a framework for faster spending growth during the forecast period.

Despite the current economic crisis, work will continue on most of the major infrastructure and IT projects associated with that event. Spending on IT services still depends heavily on government programmes, and in the current economic environment, the government will remain the largest spending IT services vertical, followed by financial services and telecoms.

E-Readiness
Internet penetration in South Africa is by far the highest on the continent, although broadband penetration remains low. In the small business sector, some progress is being made: according to a 2008 survey, 63% of smaller companies that use computers to connect to the internet now have a DSL internet connection, exactly the proportion using dial-up five years ago. Despite the opportunities, prospects for the IT market remain constrained by high communication costs and uneven infrastructure development. The government has launched a series of initiatives to tackle this issue, but there are doubts as to whether the government has the will to tackle the key question of termination rates and pricing implications.

The South African broadband market will become increasingly dynamic over the next five years. One development that is expected to have a major shake-up effect on the market is the inauguration of various undersea cables. Some of these are due to go live by 2010 and will help to reduce the cost of bandwidth. Other developments that are expected to provide the broadband market with a major stimulus include local loop unbundling – scheduled for completion in 2011 – and the deployment of new network infrastructures to rival Telkom’s national network.

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Things Fall Apart For Uganda’s Fiber Optic Cable

Kato Mivule | April 21, 2010
It is always the poor who suffer while the elites can afford expensive satellite connections in Kampala… Corruption and mismanagement are some of the largest impediments to ICT development in Uganda…

Internet cable project stopped | New Vision |April 20, 2010
By Cyprian Musoke

THE National Information Technology Authority has stopped the laying of the Internet cable over reports of poor quality and inflated costs.

The three-phase project, which was meant to be ready by now, has been mired in controversy since it started in 2006.

The cable is meant to be linked to the submarine cable that arrived at the East African coast recently and to provide faster and cheaper Internet access to Uganda.

However, experts say the project will not deliver on the objectives because of the poor quality of the cable. Experts also said Uganda was spending far more on the “inferior” cable than what Rwanda spent on a superior one.

In a letter to the Chinese firm, Huawei Technologies, which is implementing the $106m (about sh221b) national fibre-optic project, the ICT watchdog said the work should wait until a forensic audit is conducted.

The permanent secretary of the ICT ministry, Dr. Godfrey Kibuuka, said the audit was goung on, but refused to give details.

The head of the parliamentary committee on ICT, Igeme Nabeta, also said yesterday the MPs had ordered the Chinese company to stop to allow a review of their work to ensure value for money.

“Where we find that they made mistakes they have to fix them at their own cost,” he stressed.

He said they would like to see the first phase operational before they give the project a greenlight.

“We want to see those e-government services operational.” The first phase involved laying a cable covering Kampala city, Entebbe, Mukono and Bombo towns, to enable high-speed data transfer between government offices.

Under the project, 2,100km of backbone fibre-optic cable would be laid. The New Vision broke the story recently that the cable was largely defective and inadequate for the national backbone infrastructure.

Uganda, it emerged, was using the G652 type instead of the G655 which would enable fast transmission and to take care of future growth.

The project is funded by a concessional loan from the export/import bank of China. Uganda will pay back the loan over 20 years.

“The contractor had transferred the completed phase to the Government. In some parts, the cable was laid in swamp land, elsewhere there are no generators, and many trenches are too shallow,” the MPs said in a report.

Despite the order from Parliament and the ICT ministry to halt the second phase, Huawei refused to stop.
Huawei blamed the damage to the cable on the numerous dig-ups in the city by various companies installing underground infrastructure.

Huawei wants each party to appoint its own experts to establish the quality of their work and said it was ready to fix any errors which they are responsible for.

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Phone firms shift focus to post growth

Phone firms shift focus to post growth | Daily Nation | Jevans Nyabiage

Mobile phones are slowly starting to replace personal computers in sub-Saharan Africa, where a PC is still quite expensive.

Mobile phone service operators are betting on data to grow their revenues as income from voice nears saturation.

Telecom research firm, Frost & Sullivan says data services is the next kid on the block for mobile phone firms if they have to register continued growth.

This, the firm says, is because mobile phones are no longer seen as a tool for basic phone calls and text messages only.

The just-released annual results for operator MTN confirm the growing role of data services for African mobile firms.

The group reported that approximately 15 per cent of its revenue last year came from data.

Frost & Sullivan’s ICT analyst Silvia Venter says this is an indication that the days of data consisting only of basic SMSs and accounting for less than 10 per cent of an operator’s revenue are gone.

She says mobile phones are slowly starting to replace personal computers in sub-Saharan Africa, where a PC is still quite expensive.

In Kenya, Safaricom recently said it is shifting its over-reliance on voice which is reaching saturation with new frontiers like data and value added services, which it bets to grow its future revenues.

Other operators

According to chief commercial officer Peter Arina, over the past three years the firm has invested about Sh7.5 billion in a bid to establish a cross-section of technologies aimed at positioning the firm as a serious data player.

Although there are no public figures on the uptake of data for the other operators, their aggressive marketing for the same points to the ongoing battle.

Telkom Kenya bets on its fixed line to increase data solutions while Zain Kenya recently signed agreements with 45 telecoms operators around the globe to allow it expand international roaming coverage for data services.

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Ugandan Google Maps Launched Featuring Entebbe and Kampala

Kato Mivule | March 1st 2010

An interesting development as Ugandan maps become digitized. Google is surely becoming a force in the Information Technology Revolution in Africa…

Uganda:  Google Launches Maps | AllAfrica| Sylvia Nankya |24 February 2010
Kampala — Detailed maps of Kampala and Entebbe are now accessible on Google Maps through any web browser. The maps can also be accessed on data enabled mobile handsets. They come with both a satellite and a terrain view of the cities. Kenya and South Africa were the first beneficiaries of the Project which has now extended to 29 cities across Africa. “Google Maps isn’t just a searchable digitised maps helping you to find a local place, service or product – it is about making information with a geographical dimension available to everyone” Rachel Payne Country Manager Google Uganda said recently. Google believes that more accurate local information can greatly improve the breadth of information available about a given area and in turn can help efforts to bolster tourism and business investment. Businesses can also benefit

Google Map of Entebbe

from the Street View technology by embedding Google maps directly into their site for free, helping them to promote a chain of hotels or raise awareness about a local library or restaurant, Payne said. She added that the service will give tourists a taste of the variety that Uganda offers, and a chance to research their holidays in advance. The map data includes a substantial amount of user generated content provided via Google Map Maker. The Map Maker allows users to locate, draw, label and provide attributes for local map features, such as roads, parks, or rivers, turning local users into “citizen cartographers.” Payne allays fears that the maps could pose a security threat to the cities. “The Information we are using on Google is approved and available to every citizen, she said.

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