Afrique Occidentale & Centrale Com: De retour au Sénégal par demande générale

The Zain-Bharti transaction: How will West African mobile markets be affected?

Mais non! DevelopingTelecomsWatch has not become a francophone blog. The frenchified title of today's offering is in honour of the fact that a noted West African telecoms conference is, after two years in Nigeria, to be hosted in Senegal in June.

Geopolitically, West Africa is defined by the UN as consisting of: Benin, Burkina Faso, Côte d'Ivoire, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo. Of these, just four are countries where English is an official language. Of the others, two are Lusophone states and ten are French-speaking.

The organisers of the aforementioned conference have found that this linguistic diversity in the region creates certain challenges for them. Nigeria, as by far the largest market in West Africa, seemed to be the logical place in which to host the event for the last couple of years. Certainly, relocating the conference to Abuja (from its previous venue of Dakar, Senegal) two years ago paid tremendous dividends in terms of boosted attendance numbers and a good buzz of activity at the 2008 and 2009 iterations of the gathering. This was achieved, however, at the cost of making the event a tad less attractive for delegates from the numerous French-speaking markets. This effect was somewhat mitigated by ensuring that simultaneous English-French translation was available during all conference sessions, but perhaps not as much as was hoped given that this year Informa Telecoms & Media have moved the show back to Dakar again.

Given that delegates from telecoms operators attend for free, Informa monetises its Com World Series events (of which West & Central Africa Com is one) largely by selling sponsorship packages and exhibition space to the telecoms technology vendors that do business with those operators. These vendors will doubtless remain keen on the potential of the large (and fragmented) Nigerian telecoms market and might be concerned about not having a good tradeshow route-to-market to address this now the conference has headed back to Dakar.

With this in mind, I guess, Informa are also running a specifically Nigerian event in Lagos this year. This will make its debut in September.

In the meantime, what can we expect to be discussed at the Dakar gathering?

I guess one hot topic - addressed via offline chitchat if not via presentations and panel discussions - will be the effect of Zain's withdrawal from the region. The Kuwaiti group currently controls opcos in Burkina Faso, Ghana, Niger, Nigeria and Sierra Leone - as well as others in markets elsewhere in sub-Saharan Africa. As discussed ad nauseum in DTW posts passim., all of these are now set to be in the hands of giant Indian cellco Bharti Airtel. DTW's most recent article, mainly a brief exploration of whether India's mobile market is set to consolidate, did a little to talk up the ways in which Bharti Airtel might be able to reinvent Zain Africa by introducing the low-cost business model which it has empoyed on home turf. So let's see how much tougher sub-Saharan markets are set to become for Zain/Bharti's competitors.

This acquistion, however, may yet take a little while longer to conclude. One reason for this could be resistance from the governments of the countries in which the Zain-owned opcos are set to change hands. That said, there have been recent signs of these obstacles being overcome.

Back in March, for example, as reported by India's Economic Times, the Government of Gabon said it "disapproves" of the sale of Zain's Gabonese assets to Bharti Airtel and reserves the right to take "all necessary measures". Late last week, Reuters was reporting that this objection had been resolved.

It will be interesting, then, to see how long it takes to deal with any further problems of this kind. If the difficulties do continue into June, it should be interesting to connect with Tiemoko Coulibaly, Vice President of Zain's Western Africa operations at West & Central Africa Com in Dakar.

There will be many other reasons to attend the event - but connecting with the likes of Mr Coulibaly could be motivation enough for anyone who does business with Zain in Africa and now needs to keep on top of how the change of ownership is set to change the game.

Afrique Occidentale & Centrale Com: De retour au Sénégal par demande générale

Refreshing news for emerging markets MVNO proponents?

Kirène Mobile avec Orange: new MVNO on the scene in Senegal; graphic from www.kirenemobile.sn

In March I asked which of India or Africa would be the first to see mass-market MVNOs. I tentatively concluded that perhaps India looked the better bet.

In that discussion, I made reference to a presentation by Carlos Valdecantos of mmChannel, a technology company dedicated to the development and management of digital entertainment services and platforms on a B2B format. In this presentation, Carlos argues that while Africa, taken in the round, might not yet be ready for the wide scale development of MVNOs, certain markets could possibly prove to be more attractive for investors in prospective virtual mobile operators. For Carlos, the high-potential markets are South Africa, Ghana, Morocco, Algeria, Tunisia and Egypt. This is due to their meeting several criteria that he sets:

• good market size (population level, GDP)
• strong economic liberalisation
• dynamic telecom sector

For Carlos, mid-potential African markets for MVNOs are Namibia, Mozambique, Cameroon, Gabon, Congo and Equatorial Guinea. These are described as having a reasonable mix of suitable market size, developing economic policies and economic reform underway. In this model, a further group of low potential markets is defined as being countries which "show an interesting opportunity in some of the key characteristics but completely fail to meet others." These are: Botswana, Tanzania, Kenya, Uganda and Sudan.

This leaves a large number of African countries which Carlos describes as "no go markets" for MVNOs.

Yet it is from one of these "no go markets" that news comes today of an MVNO being launched. According to a Cellular News item, Kirène, a mineral water brand in Senegal says that it has launched an MVNO in the country, running on the Orange Senegal network. The mobile service will be branded as "Kirène Mobile avec Orange", with the Mobile Virtual Network Enabler (MVNE) services being supplied by Transatel.

Quoted in the article is a gentleman I've had the pleasure of meeting more than once on the conference circuit, Philippe Vigneau, Transatel's Director of Business Development: "Being a forerunner for both companies, this project was really important to us. First of all because it was the first partnership concluded in Africa on a brand agreement (with Orange). On the other hand it is the first time that a food-industry brand, turns to a worldwide operator to develop a mobile telephony offer."

I will watch with interest to see how successful this enterprise turns out to be. Is Senegal the right place for such a venture? Or is Carlos Valdecantos right to content that the country is among the "no go markets" for prospective MVNOs?

I am also intrigued by the notion of a food and beverage sector brand getting into the MVNO business. In his presentation, Carlos observes that there is likely to a strong correlation between the long-term profitability of an MVNO and the strategic assets the company/brand brings to its mobile venture. He cites assets and examples including:

• systems + billing + customer base - example: Tele2 using fixed-telephony IT infrastructure to support virtual mobile service offerings across Europe.
• differentiated value proposition/specific target segment - example: ay yildiz, an MVNO aimed at Turkish immigrants in Belgium, with special prices on calls to Turkey and Turkish language customer support.
• access to customers/sales and recharge channel - example: Fresh Mobile, an MVNO offering in the UK from the Carphone Warehouse, the country's leading independent mobile phone retailer.
• access to huge customer base - Tesco Mobile is the MVNO offering of the UK's largest supermarket chain, which has a distribution channel unrivalled in its pervasiveness; the chain also collects rich customer data via discount card schemes.

On my travels in Turkey, I've also heard it suggested that Istanbul's big three football clubs, each of which has a fanatical fan base numbering in the millions, might enter the MVNO space once market conditions make it feasible.

I am much less clear what a mineral water brand brings to an MVNO project, much less in a potentially very challenging market such as Senegal. That said, I have never visited the west African country and could not comment on the degree to which Kirène is a dominant, well-loved brand. Perhaps brand equity alone will be enough to make this enterprise succeed.

Refreshing news for emerging markets MVNO proponents?

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?

Cameroon, Côte d’Ivoire, Ghana, Mali and Senegal stand out among West and Central Africa's booming mobile markets

An article from the African Press Agency this week, picked up by Cellular News, has rounded up a very positive set of Q3 2008 operational results from telcos doing business in West and Central Africa, including MTN, Orange, Zain, and Millicom Cellular International.

The mobile markets of Côte d’Ivoire, Ghana, Gabon and Mali, according to the unnamed authors of a report to which the article refers, are found to be larger than expected. Conversely, the mobile markets of Cameroon, Mauritania and Senegal were found to be smaller than expected by the end of 2008.

This report apparently included a five-year mobile telephony forecast for West and Central Africa which forsees the strongest subscriber growth occurring in Cameroon, Côte d’Ivoire, Ghana, Mali and Senegal. The report adds that in Cameroon and Mali, penetration rates were still relatively low at the end of 2008, giving these markets considerable room for further future growth. The report authors are correct. According to the World Cellular Information Service offered by Informa Telecoms & Media, mobile penetration in Cameroon stood at just over 31% by the end of December 2008 and at just over 28.5% in Mali.

These are the sort of numbers I expected. Much more surprising is the 103.66% penetration recorded in Gabon - and the fact that the Gabonese market has doubled in size over the last two years. True, the relatively small country with a small population (around 1.5 million) has abundant natural resources and has apparently enjoyed decent levels of foreign private investment, all of which has made Gabon one of the more prosperous countries in the region, with the highest Human Development Index in Sub-Saharan Africa. Mobile penetration of over 100% still seems unusually impressive, even in this context. In the rest of Sub-Saharan Africa only South Africa and Botswana have broken the 100% barrier.

This article, then, indicates that West and Central Africa's mobile markets are in rude health. It is certainly the case that the Com World Series conference and exhibition which serves this region was one of Informa Telecom's & Media's more impressive success stories in 2008, with delegate numbers up 72% vs. the previous year's event. I do not believe that all of this growth can be attributed to shifting the conference to Abuja, capital of the continent's largest market, Nigeria. My former colleague, Julie Rey has done a magificent job growing this and other events in Africa in her time with the business.

One of the CEOs who contributed to the 2007 version of the event (in Dakar, Senegal) has been in the news this week, for rather less happy reasons than some new achievement on the part of the cellco which he leads.

Aimable Mpore heads up MTN's operation in C­ôte D'Ivoire, a country from which he has just been expelled according to a Cellular News article I read this week. Mr Mpore (who has dual Canadian and Rwandan citizenship) has apparently managed to embarrass the country's President.

One of the frustrations of doing the same job as Julie in other world regions was having to handle cancellations on the part of keenly-anticipated conference speakers. My view is that everyone who agrees to make a presentation or join a roundtable discussion does so in good faith, genuinely intending to be there as advertised. I therefore realise that it makes sense to take it on the chin when some legitimate cause for withdrawing crops up. I am not sure if Mr Mpore was planning to make it to Abuja for this years's West & Central Africa Com. Unless his current difficulties are resolved soon, I would say he has a legitimate reason to decline the invitation or go back on any arrangement already made.

As I look back fondly on my years of rounding speakers for industry conferences worldwide, this is one aspect of the job I will not miss.

Cameroon, Côte d’Ivoire, Ghana, Mali and Senegal stand out among West and Central Africa's booming mobile markets