East African opportunities unclear as cellcos remain coy about data ARPU

Kenyatta Int'l Conference Centre, Nairobi: venue for this year's East Africa Com

Last year I had the pleasure of visiting Nairobi, Kenya for the first time, building meetings around the excellent East Africa Com conference and exhibition.

This year, given that my day-to-day commercial activity now does not give me much exposure to Africa, I will not attending. Were I still more active in Africa, however, I would certainly want to be there - and I would encourage anyone who does business with the telecoms operators of the East Africa region to head for the Kenyatta International Conference Centre on 27th-28th April.

This year's event will be graced by the presence of the Hon. Samuel Poghisio, the host country's Minister for Information & Communications and by Charles J.K Njoroge, Director General of telecoms regulatory agency the CCK (Communications Commission of Kenya). I don't recall the Kenyan Government and authorities being represented at such a high level at the 2009 event, so the organisers are to be congratulated for the upgrade.

Sponsors and exhibitors will doubtless also be impressed by the number of operator CEOs to whom they will have access during the two days of discussions. Of these, two of the biggest hitters are Michael Ghossein, CEO of France Telecom-controlled Telkom Kenya, the country's incumbent fixed-line operator and Michael Joseph, the long-standing CEO of Kenya's dominant (78.8% market share, according to WCIS) mobile operator Safaricom.

This may be one of the final conferences appearances for the latter, Joseph having announced his impending retirement. He joined the Kenyan operator in mid-2000, when Vodafone first invested in the company. Since then, he has guided the company from a subscriber base of fewer than 20,000 to over 15 million today. Along the way, Safaricom has become renowned for its M-Pesa mobile money transfer service, which has brought the advantages of financial services to very large numbers of Kenya's largely 'unbanked' population. Safaricom also attracted praise this week from Alexander Grouet of Mira Networks, a leading provider of connectivity and billing tools between business and mobile networks in Africa.

Grouet asks: "Would you plan a trip to a foreign destination if you didn't know what the place looked like, what there was to see, how much a hotel room cost and what local transportation was available?" Having concluded that most readers would not, Grouet then invites us to imagine that what we’re talking about is not your vacation, but your business. "Well that’s pretty much what it’s like for most content providers wanting to penetrate the SSA [sub-Saharan Africa] market", he continues. "Despite the hype, the market metrics WASPs crucially need in order to make the next step, such as data ARPU or WAP traffic, are virtually inaccessible. Even traditional market data resellers don't offer it, as optimistically named Africa VAS reports almost exclusively include blended indicators rather than content-specific ones." I don't recall if this is a fair accusation to direct towards the good folks at the reports business of Informa Telecoms & Media, the organisers of East Africa Com.

Even if it is, Grouet suggests that the fault for the scarcity of these vital data lies with operators. "Out of the 26 operators in the 5 countries I worked on last year (Nigeria, Kenya, Ghana, Senegal and Cote d'Ivoire) only 2 to my knowledge," he writes, "publicly released their data ARPU." The two cellcos in Mr. Grouet's good books are Safaricom and Starcomms, a Nigerian CDMA carrier.

"The most likely explanation for this", ventures Grouet, "is that the data figures are still so low on most networks that operators simply don’t want to release them at this stage." According to Grouet, even Safaricom's data ARPU, including M-Pesa, stands at just USD 1 monthly, while the figure for Starcomms, including EV-DO dongles, is just under USD 2 per month. "But at least, we know where they stand, and we will be able to measure their progress when they next update those figures," Grouet continues.

Grouet hopes that other African operators will break their silence on the topic of data revenues, not least because that unwillingness to share data "only has the counter-productive effect of making it harder for international content companies, who precisely could help operators boost their data traffic, penetrate their markets."

Let's see how many cellco attending East Africa Com agree with these sentiments. Were I to attend this year, I would probably like to pursue that line of questioning, not least because I have received marketing emails from Informa which suggests that the region's operators are somewhat focused on data services.

A speaker likely to turn in an entertaining presentation is Noel Herrity, CEO of Tanzania's Zantel, an operator in which the UAE's Etisalat owns a 51% stake. Mr. Herrity delivered a compelling, nicely paced talk at the 2009 iteration of the conference and delegates will be hoping for more of the same. Perhaps we can be optimistic about that - Herrity may be in buoyant mood in light of recent reports indicating that the operator has begun recording net customer additions again, following two quarters of net loss.

One speaker for whom it could be challenging to stay 'on message'? Bashar Arafeh, the COO of the East Africa Region for MEA mobile group Zain.

This might arise as a result of delegates' curiosity about the future of Zain's African operations. Subject to takeover speculation for many months now (see DTW articles passim.), these assets could well be the property of giant Indian cellco Bharti Airtel before too long. The most recent developments in this long-running saga may soon prompt a revival of the popular mini-series (well, it generated more hits than usual) which appeared here on-and-off for much of 2009, rejoicing in the clunky title 'Zain Africa Speculation Watch' (and variations thereon).

Other CxOs appearing on stage at next months event include:

• Hans Paulsen, CCO, Uganda Telecom
• Themba Khumalo, CEO, MTN Uganda
• Ali Bin Jarsh, CEO, Canartel, Sudan
• Julius Kinyua, CEO, Flashcom, Kenya
• Geoff Goss, CEO, Celsys, Zimbabwe
  

I'm sure this year's event will once again be a useful place to do business, gain market intelligence and enjoy the company of a crowd who always seem very open to networking and making new contacts.

East African opportunities unclear as cellcos remain coy about data ARPU

Somalia: while daring operators turn a profit, it's the bad news that tends to reach us

Somalia - often in the news, but, sadly, this rarely seems to be for positive reasons.

Just this week, heavy fighting in Mogadishu has caused at least twenty deaths, with fierce clashes between Government forces and an Al-Qaeda-linked rebel group battling to oust the country's President. Meanwhile, Minority Rights Group International (an organisation which campaigns worldwide to protect disadvantaged minorities and indigenous peoples) has stated that Somalia remains the world's most dangerous country for minority groups.

Amidst the chaos of the civil war which has gripped the country since 1991, Somalia has sometimes gained strong praise for the surprisingly good condition of its telecommunications infrastructure. For example, Industry-watcher Paul Budde, with whom I once had the pleasure of working to create an Oceania region telecoms sector conference in Sydney, wrote in 2005 that although Somalia had "no government" and was "lawless and war-torn" with "no banking system, no national telecoms operator, no court system" and with nobody paying taxes, the country nevertheless had a thriving telecoms business.

Paul wrote about how when national operator Telecom Somalia collapsed, their employees continued to work, setting up a de facto privatised company in 1994. Paul also described his amazement at learning about how this entity and two other mobile operators later voluntarily agreed to introduce operational separation and combined to set up a separate infrastructure to be used by all three of them. He also wrote about how despite the lack of a banking and court system people pay their bills, "and even the war lords don’t interfere as they all have a vested interest in good telecoms." Paul was also surprised at broadband speeds available in the Mogadishu area and the speed with which customers could have a landline installed.

Three years later, an African Press Agency report also described telecommunications as one of the rare business successes in the strife-torn country. This report asserted that it is easier to set up a telecoms business in Somalia than in some other African countries because there is no need to get a license and there is no state-run monopoly hindering new competitors from entering the market.

As things currently stands, the mobile market is, according to the World Cellular Information Service from Informa Telecoms & Media, contested by no less than six telecoms operators, all of which have deployed GSM networks. These are (in order of estimated market share):

1. Telecom Somalia - 37.87%
2. Hormuud Telecom Somalia - 18.74%
3. Telsom - 13.71%
4. Somafone - 13.27%
5. NationLink Telecom - 9.90%
6. Golis Telecom Somalia - 6.52%
   

My understanding is that because of the way de facto control of the country is fragmented, these operators do not all cover precisely the same areas. As a nation state, Somalia exists largely in a de jure capacity. A weak but largely recognised central government authority, the Transitional Federal Government is just the latest in a series of ineffectual, externally recognized governing authorities. In reality, control of the north of the country resides in the regional authorities. Of these, Puntland, Northland State, Maakhir, Galmudug, acknowledge the authority of the TFG and maintain their declaration of autonomy within a federated Somalia, while Central, Southern Somalia and Kismayo are in the control of the Islamic Courts Union and insurgent group al-Shabab. Baidoa is currently the seat of the TFG, and Somalia's commercial centre. On the other hand, the Somaliland region in the north, with its capital in Hargeisa, has declared independence and does not recognise the TFG as governing authority. Its self-declared independence is unrecognised internationally due in part to opposition from the TFG and other countries, such as neighbouring Ethiopia, which fear ensuing secessionist movements.

This fragmentation of the country is reflected in the coverage areas of the operators, most of which offer a range of fixed-line services in addition to their mobility propositions. Golis Telecom Somalia, for example, operates in North East Somalia, offering fixed and mobile services in both Puntland and the self-declared independent state of Somaliland. Hormuud Telecom Somalia, meanwhile, describes itself as the leading telecommunication services provider in Southern Somalia.

Strikingly absent from the list of six cellcos/telcos above are any big names. No multinational telecoms group has the stomach for operating in an unregulated free-for-all and in a country whose security situation continues to be so parlous. I daresay this will not change for as long as Somalia continues to be wracked with conflict and continues to suffer from the absence of settled and fully legitimate government.

So, despite the fact that some daring, entrepreneurial operators are making a profit from providing life-improving services in this troubled country, it seems that for now, even in the context of telecoms sector news, it will largely be bad news that filters through to the outside world.

One recent example of this concerns pirate activity off the Somali coast delaying installation for SEACOM, one of three undersea cables set to deliver vast improvements to the capacity of East Africa's telecoms and Internet infrastructure. Anything which delays these improvements coming on line is highly regrettable because, as a recent Reuters report points out, while the three subsea cables and many on-land infrastructure projects are helping to boost communications, sub-Saharan Africa continues to be hampered by excessive prices for broadband and mobile services. The report features comments from Mohsen Khalil, World Bank Group Director for Global ICT who says that the typical monthly mobile bill was still USD 10-12 in Africa, while in Southeast Asia many operators run profitable operations with average bills of USD5 or less.

Another incident whose impact will be felt much less widely, but is nonetheless extremely horrible, took place in an area controlled by the insurgent group al-Shabab. According to a recent Cellular News report, a court under the control of al-Shabab has ordered four young men suspected of stealing guns and mobile phones each to have a hand and a leg amputated.

Because of the mobile handset angle, this pops up as a Somalia-related item for various telecoms sector news sources. Regrettably, it feels like stories of this kind continue to outnumber more positive items. Communications services undoubtedly improve lives in developing countries, but the good work of people in our sector will continue to be hampered anywhere where ongoing conflict prevents the establishment of the legitimate and internationally recognised rule of law.

Somalia: while daring operators turn a profit, it's the bad news that tends to reach us

East Africa: exchange of views (?) on taxes levied on mobile use

When I used to be involved in the organisation of telecoms sector conferences and exhibitions around the world, my marketing team worked hard to ensure that the events were attended both by reporters from international industry publications and by journalists from the mainstream news media of the host country. It was always quite gratifying to see copy about the presentations and discussions in the local vernacular in the days following the conference.

I imagine, then, that my former colleagues in the Com World Series team over at Informa Telecoms & Media may have been a little annoyed to see a round up of stories clearly emanating from the recent East Africa Com conference in Nairobi which failed to mention the event. Perhaps the host country's Daily Nation newspaper is not actually at fault here, having sourced the piece from Reuters.

Putting these gripes aside, I was interested to see that of the numerous points raised at the event by Vitalis Olunga (who heads up the GSM Association's African chapter), the Reuter/Daily Nation article led with his comments about taxes on mobile phone use.

Mr. Olunga, whose day job is with market-leading Kenyan cellco Safaricom, is quoted as saying that excise duty rates of more than 10% across Kenya, Uganda and Tanzania are too high. "If they reduce it, it will promote the usage of mobile. Rwanda has given us a good example where they introduced it at 3%," he told Reuters at a regional telecoms conference (this is the point at which the journos could have named the conference!)

Olungu said that a cut would also help cushion the sector from forecast falls in ARPU as the region increasingly feels the impact of the global financial crisis.

Susan Mochache, also spoke at the event, is an assistant director at the Communications Commission of Kenya. Ms. Mochache told Reuters her organisation expected tariffs to fall anyway due to growing competition.

I flew to Nairobi with the beginnings of a bad head cold. I got off the plane with somewhat impaired hearing as a result. So I may have missed some nuances of what was discussed at the conference. Even so, I am pretty sure that the exhange of views about taxes and tariffs which is implied in the Reuters/Daily Nation piece is not something that unfolded on stage...

East Africa: exchange of views (?) on taxes levied on mobile use

East Africa Com musings: Does it matter which submarine cable lands first?

The socio-economic impact of undersea cables in East Africa: the SEACOM view

Blogger Clement Nthambazale Nyirenda is a lecturer, researcher and consultant in Electronics and Computer Engineering at the Malawi Polytechnic, a constituent college of the University of Malawi. He is currently studying for a PhD in Japan at the Tokyo Institute of Technology. In February Clement wrote about the broadband speeds he enjoys in Tokyo and expressed his hope that a similar service might one day be available in his home country.

Malawi, as Clement noted, while usually considered to be part of Southern Africa, also lies in the easterly part of the continent, which is "the only region in the world that has neither intra-[continental] nor direct access to worldwide international cable networks." The region, Clement observes, "instead relies on expensive satellite communication" with "data costs... among the highest in the world."

Clement discusses the progress of the Eastern Africa Submarine Cable System (EASSy), "the first initiative proposed to connect countries of eastern Africa via a high bandwidth fibre optic cable system to the rest of the world." According to the EASSy website, the level of international telephone traffic per main line in sub-Saharan Africa is the highest in any region in the world, which is proof of there being "considerable demand in East Africa due to insufficient supply for telecommunications within the region." My own single experience of visiting that part of the world - last week's trip to the East Africa Com conference in Nairobi - does lead me to concur, as does the business of simply trying to make calls to other East African countries from the UK. As I noted in my most recent post here, the only frustrating aspect of my short trip to Kenya was finding it fairly difficult to stay on top of my day job via our company VPN. At both my hotel and the conference venue, Internet access was slow and unreliable.

My understanding is that there exists the hope that providing East African countries with improved connectivity could prove to be an effective catalyst for economic development in the region through the expansion of businesses based on the Internet, the provision of call centre services and the outsourcing of other back office functions.

EASSy is set to run from South Africa to Sudan, with landing points in six countries, and will be connected to several landlocked countries. A number of telecoms operators have invested in EASSy via WIOCC (West Indian Ocean Cable Company), which had a visible presence at last week's conference. These include state-owned wireline incumbent operators such as Botswana Telecommunications Corporation, Djibouti Telecom, Telecomunicacoes de Mocambique and soon-to-be-privatised ONATEL of Burundi.

Others in the WIOCC contingent are Orascom Telecom-backed MNO U-Com (of Burundi), Telkom Kenya, Dalkom (Somalia), Zantel, Uganda Telecom, Israel's Gilat Satcom and the Lesotho Telecommunications Authority.

From South Africa, direct investors in EASSy include Neotel, MTN and a consortium of Telkom (SA) and Vodacom. Futher direct investors in the project are Telecom Malagasy, Mauritius Telecom, SUDATEL, Tanzania Telecommunications Company, Comores Telecom and Zamtel (no, that's not a repeat of Zantel). From beyond the region, other backers are BT, Saudi Telecom, Bharti Airtel, Etisalat and France Telecom.

In his February blog post, Clement Nyirenda notes that EASSYy was once expected to be ready for commercial use in Q2 2007 but that construction did not get underway until March 2008. Clement reports (confirmed by a more recent Compterworld Kenya article) that the project is now slated for completion and commercial service in the second half of 2010 - three years behind schedule. "EASSy has not been EASY", comments Clement.

In Clement's opinion, "the major problems hampering the progress of the EASSy project stem from the fact that it is a joint venture of more than 20 largely monopolistic parastatal telecommunication bureaucracies." I shall leave it to individual readers to decide which (if any) of the project's backers fit this rather critical description. "In Africa," says Clement, "the culture of working together in such a large grouping is not common."

Wrangles between partners do seem to have been a feature of the project, at least as far back as June 2006, when a meeting of ICT ministers from Eastern and Southern African countries helped resolve disagreements among project participants, according to Sammy Kirui, the chairman of EASSY's project management team.

Regarding the most recently announced delays, the Computerworld article quotes WIOCC CEO Chris Wood, who said late last month that "the delays have been caused due to optimizing the cost structures and finalizing the agreements between all participating carriers". Wood, states the article, is not worried about the delays because the most important thing is the long-term stability of the financial structure of the cable system. "Time and again", Wood said, "the telecom industry has seen private equity financed companies build cables and then go bankrupt within a few years as their business model, hit by high costs, proved unattainable."

EASSy is just one of three submarine cables set to improve the region's connectivity. Another is TEAMS (East African Marine System). Etisalat appears to be spreading its bets in the race to connect the region, having a 15% stake in TEAMS in addition to its investment in EASSy. The other 85% of the ownership of the TEAMS project is split between a diverse group of interests including the Kenyan Government, Telkom Kenya (another one which is backing two horses) and Kenya's market-leading cellco Safaricom. Also involved from Kenya are the country's largest private data carrier Kenya Data Networks and most recent mobile market entrant Essar Telecom Kenya, whose billboards I saw all over Nairobi last week. The advertising of another TEAMS backer, the cable MSO Zuku, was also very prominent as I caught a glimpse of the city during cab rides between meetings.

Kenyan players dominate the consortium, with ISP AccessKenya and Jammii Telecommunications (which provides access to the Internet Backbone to telcos, ISPs, and large enterprises) also involved.

One more Keynan TEAMS backer is Flashcom, an integrated telecommunications solutions provider offering voice, data and SMS services with a collection of network assets including a CDMA2000 WLL and ISDN services over Fibre. Flashcom's CEO Joe Kimani was on the speaker panel at last week's conference, but unfortunately I didn't get the chance to catch what he had to say. From beyond Kenya, a small stake in TEAMS is held by Africa Fibrenet of Uganda.

The other submarine cable on the East Africa scene is SEACOM, whose investors state that the project will ensure access to low cost bandwidth, thereby encouraging the growth of existing and new industries, as well as education and e-government.

Does the region need three undersea cables? If all of this is thought of as a race to land the cables and start doing business first, will whichever project finishes last find itself out of the game? A Business Times (Tanzania) article of last Friday contends that the answers to these questions are, respectively, 'yes' and 'no'.

In this article, the scene is set with an illustration of the degree to which the current paucity of connectivity impacts upon businesses in the region. The claim is made that a large corporation in Tanzania can pay about USD 3000 a month just to ensure a reliable Internet connection for its network. According to the article, this figure rises to USD 7000 to cover a megabyte of bandwidth per computer in a medium-sized office in Kenya. "A business connection in an urban center in the US," continues the article, "can cost as little as USD 25 a month".

The article compares the economics of the VSAT and undersea cable industries and adds that "fiber optic cables are low latency: they can carry information more than ten times faster than a VSAT to satellite to cable connection."

When making a comparison between the three submarine cables, the article contends that they all have "roughly the same capacity", but notes that "each connects a different combination of countries and ownership."

The article acknowledges that "there has been much hype in the media about which cables will land first" but makes the argument that "the success of one cable does not render the others useless." The view expressed is that redundancy is needed to ensure the security of broadband supply and to stimulate competition, thereby reducing prices for users. "Tanzania will be able to make room for both the EASSy and the SEACOM cables, as well as any connectivity provided by TEAMS", concludes the piece. Plenty of room for all, then, it seems.

East Africa Com musings: Does it matter which submarine cable lands first?

East Africa Com report: Telkom Kenya positions as only convergence player in a competitive mobile market

TELKOM KENYA: ambitions of being East Africa's only quad-player

Last week I spent two days nipping in and out of the Com World Series East Africa Com conference and exhibition, organised by Informa Telecoms & Media in Nairobi, Kenya. I had hoped to share some of what was discussed here in real-time, blogging merrily away from the conference venue. A busy schedule made this difficult, compounded by the non-availability of a genuinely fast and reliable Internet connection at either the venue or my hotel.

Broadband speed and price in the region was a topic visited by a number of the conference speakers. Peter Reinartz, the Deputy CEO of Telkom Kenya/Orange Kenya, for instance, spoke about the effects of the long-anticipated arrival of submarine fibre optic cable. Reinartz poured cold water on suggestions that the retail price of broadband services would fall by as much as 90%, but did pick out the region's improved connections to the rest of the world as being a key driver of the kind of converged offerings his company is putting together.

Telkom Kenya was privatised in 2007, with France Telecom acquiring a 51% stake. The Kenya Government retains the other 49%. As part of the process, the company's controlling stake in market-leading cellco Safaricom was transferred to the Government, temporarily taking Telkom Kenya out of the GSM game. This brief period away from the heat of the battle in the mobile space ended with the September 2008 launch of Orange Kenya. With the later arrival of Essar-managed Econet Wireless Kenya (branded Yu), the country's mobile market is now home to four competing providers: Zain also has a presence.

As of March 2009, according to the World Cellular Information Service, the Kenyan mobile market is split as follows:

1. Safaricom: 76.79%
2. Zain Kenya: 17.41%
3. Telkom Kenya/Orange: 3.90%
4. Yu: 1.89%

The fourth player in the list above has recently been the subject of takeover speculation. On the day the conference opened, South African news portal Business Report was carrying denials from Yu CEO Srinivasa Iyengar regarding plans to sell the operation to MTN. If such a transaction were ever to take place, the Kenyan market would become the scene of a competitive struggle between only well-funded regional giants.

In his presentation, Reinartz spoke about not wanting to be Kenya's "third mobile operator", preferring to position the company as the country's only converged operator. 2009, he said, is to be a crucial year in the development of this strategy. Having launched a unified brand, a single touchpoint for customers and having "built an image as a full alternative to [the] mobile incumbents" in 2008, Reinartz set out his stall for this year: reinforcing existing customer retention initiatives and rolling out the first layer of convergent propositions. One of these is voice pricing unification across Telkom PSTN, Orange 'Fixed Plus' (CDMA WLL) and Orange mobile services. Customers can enjoy friends-and-family discounts across all these services.

At the conference, Zain was represented by Raed Haddadin, the group's Commercial Director for East Africa. A theme about which Mr. Haddadin spoke enthusiastically was mobile money. In this space, the Zain offering, branded Zap, enables under-banked people to desposit and withdraw cash, transfer funds to family and friends, top up mobile airtime and pay bills for goods and services.

Other tasks prevent me from rambling on at length now about other information I gleaned at the conference. I'll try to share more in the coming days.

East Africa Com report: Telkom Kenya positions as only convergence player in a competitive mobile market

Nairobi calling

I am comfortably settled on the outskirts of Nairobi, Kenya and looking forward to two full days of meetings and conference sessions. I am aiming to share some of what of I hear at this week's East Africa Com conference more-or-less in realtime. Expect a brief synopsis of any especially interesting presentations and panel discussions.

Nairobi calling

Cellcos banking on m-financial services in tough 2009?

I recently made reference to the Mobile World Congress preview written by my former colleague, Informa Telecoms & Media Chief Research Officer Mark Newman. Mark's article was in large part dedicated to wondering about how tech vendors would be able to balance showcasing next generation mobile broadband technology with addressing operators' concerns about the need control costs in response to the global economic downturn. Right at the end of the article, however, Mark found the time to say that he felt growth potential in emerging markets will remain a theme of so this year's event, adding that discussions could centre on mobile banking.

There does seem to have been plenty of activity in this area of late, across a wide range of emerging markets. Yesterday's Cellular News email carried a highly relevant article about UK-based Monitise, which says that it has been awarded US$1.5 million by the Africa Enterprise Challenge Fund (AECF) to help fund the launch of its mobile banking and payments service in East Africa.

Monitise East Africa will initially offer services in Uganda and then plans to expand into Burundi, the Democratic Republic of Congo, Ethiopia, Kenya, Rwanda, Tanzania and Zambia. The service will enable the provision of banking, payment and money transfer services by both banks and mobile networks, within the regulatory framework of each market. Hugh Scott of AECF said: "By helping enterprises to build successful businesses in Africa, we believe that we can make market systems work better and generate wealth that benefits the entire society. Through the extension of the reach of the banks and allowing people to save, make payments and transfer money to their families, we believe that Monitise East Africa has the potential to transform the economic outlook for literally millions of people. I also firmly believe that in due course many of the people who use the service will, through the empowerment that a savings and payments culture delivers, become business people themselves, creating a truly sustainable economy."

The cellular news piece mentioned that the news from Monitise and AECF coincides with a recent launch by the UK's Department for International Development of a £1.4 million fund to spur the development of biometric and mobile phone-based banking in emerging economies in Asia and Africa. Known as Facilitating Access to Financial Services through Technology (FAST), this project will explore the options for introducing 'branchless banking' in developing countries and look at how technologies such as mobile phone banking can help the poor to access financial services.

Also in the news in recent months have been related operator-led initiatives - or at least initiatives in which certain MNOs are key partners. Again with reference to East Africa, I read a Global Mobile Daily new item just this week about Zain launching mobile banking services in Kenya and Tanzania in partership with Citigroup and Standard Chartered. Branded 'Zap', this service is also set to be extended to Uganda. Zain intends to offer the mobile banking service as part of 'One Network' allowing subscribers to send airtime to each other across Kenya, Tanzania and Uganda without roaming charges. 'Zap' is supported on all devices including ultra low cost handsets (ULCH) which are especially popular in Africa.

I also noticed last month, again courtesy of Global Mobile Daily, that in the same region, Rwandatel, the Rwanda-based unit of Libya's LAP Green will launch a mobile banking and cash transfer service in October 2009, according to reports, allowing subscribers to send and receive money via SMS. The operator has a target of 600,000 subscriptions by the middle of 2009. My feeling is that the low level of mobile penetration in the country (13.36% at y.e. 2008, according to WCIS) will be something of a stumbling block. I daresay that higher rates of penetration in some of the other markets mentioned here will mean that the benefits of mobile banking will spread faster elsewhere.

Ugandan incumbent telco, Uganda Telecom, meanwhile, has selected software developer Redknee to provide its 'Mobile Money 2.0' mobile money transfer solution, according to a Global Mobile Daily article this week, which reports: "Redknee's new Mobile Money 2.0 service will aim to allow subscribers to store and transfer money through their mobile device, and will be targeted at rural communities with poor or limited banking resources. Implementation of the solution will begin as soon as all requirements for launching the service have been approved, and will initially be available for subscribers making domestic payments and transfers, before being expanded to microfinance initiatives."

While there is plenty of mobile banking news coming out of East Africa, Francophone West Africa has seen fewer developments. In December, Global Mobile Daily reported that Orange, together with French bank BNP Paribas, will launch its Orange Money service in Côte d'Ivoire, apparently the first mobile-based payment and money transfer service in Western Africa, according to the operator.

This claim seems a little strange given that around a month earlier, GMD reported that Senegal's Sonatel is to offer the Orange Money mobile money transfer service in the country in partnership with banking group BICIS.

As a UK citizen, currently resident in my home country, and as someone who has lived in Poland, I could not have failed to notice this decade's westward movement of people from the EU accession countries of Central and Eastern Europe. When I returned from Kraków in 1997 after four enjoyable years working there, I initially found it frustrating to have very few opportunities to practise speaking the Polish language, with which I'd made some headway in my time away from home. In the years that followed, it soon became that case that not a day would pass without having the chance to chat with someone po polsku, be it a colleague in the office, the guy delivering groceries, the lady serving me coffee on the way to work or the carpenter quoting me a (very good) price to build a bookcase. It felt like Polska had followed me across the Baltic en masse. I love it that I can buy a jar of bigos and a packet of pierogi z mięsem on the high street of the SE England commuter town where I now live. It also makes me smile to travel along London's Finchley Road and see Polish language bus shelter advertisements for money remittance services. My guess is that a good proportion of the monies earned by the grocery van driver, the coffee shop lady and the carpenter have been sent back to Poland to support families there.

In December, the UK's NatWest bank gave these members of our large Polish migrant community a new option - send money to Poland from the ‘Polish Welcome Account' via a mobile money transfer service. Maybe it's a pity that this service was not launched sooner. My feeling is that the number of Poles working in the UK is set to fall rather than rise. That said, a Banking Times article of 23rd December indicates that Polish migrant workers send an estimated £1 billion a year to their homeland.

Migrant workers sending money home via mobile remittance services could be one of the m-financial services applications with the best prospects. Of these, I would guess that the new international version of Safaricom's M-Pesa services may become one of the most widely known.
M-Pesa, developed in partnership with Vodafone, has just netted another award at Mobile World Congress. Receiving the awards, Safaricom CEO Michael Joseph said: “We are very proud of the M-Pesa service. It continues to impact positively on the millions of Kenyans who have no access to banking services."

Now, in addition to Safaricom subscribers being able to transfer money and make payments within their home country, they can now take advantage of an international money transfer service between Kenya and the UK. According to a Global Mobile Daily article back in December, users of the service will be able to send money from Western Union agents in the UK to subscribers to Safaricom's M-Pesa mobile money transfer service.

Hot off the press today is news of further investment in an MVNO set up specifically to leverage the demand for international remittance services for migrant workers. Japan's Sumitomo Corporation today announced its involvment in Malaysia's first-ever MVNO, Merchantrade Asia Sdn Bhd, whose focus is prepaid mobile and remittance services targeting foreign workers, from Bangladesh, Indonesia, Nepal, the Philippines, Vietnam, India and Sri Lanka. The press release indicates that in Malaysia there are over 2 million foreign workers in various industries such as construction, plantation, manufacturing and service sector.

Merchantrade launched its mobile service in mid 2007 and as of January 2009, it has 94,000 active subscribers, according to the press relase, which continues: "as for the remittance service, Merchantrade obtained the license to operate remittance business from Central Bank of Malaysia in 2007. One of the pioneer non-bank organizations to receive license to operate remittance business in Malaysia, Merchantrade outbound remittance transaction numbers is growing aggressively. Such remittance service is in line of the global efforts targeting to secure the transparency on the personal remittance."

All of the above suggests that Mark Newman is not too far wide of the Mark in tipping mobile financial services in emerging markets as a bright spot in a tough 2009.

Cellcos banking on m-financial services in tough 2009?