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Mobile Specific Taxes Hinders Connectivity-Solomon

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Gabriel Solomon is senior vice president, The GSMA which represents 750 mobile operators in more 220 countries in Africa, Asia, America and Europe. Solomon builds, leads and develops the GSMA’s public policy agenda and thought leadership programme to ensure that the Association plays an influential role in shaping the global regulatory agenda. He is responsible for raising the GSMA’s profile internationally through effective communications and relationship development with a large number of key audiences. Solomon spoke to hilary okeke.

Mobile Broadband in Africa

The GSMA is promoting HSPA as the pivot for penetration of mobile broadband. If you look across sub-Saharan Africa, broadband penetration is very low and for mobile, HSPA technology will benefit from global economies of scale – total cost of ownership will be much lower than any alternative technology, which is why I think in Africa, you need HSPA to drive access to mobile broadband. It will stimulate an accelerated growth in mobile broadband and prices will be coming down, strictly for handsets and dongles over the next few years, making it more affordable for millions of Africans. With HSPA, you will see a base station capable of having 84MB. That, to your laptops or handsets is huge. Do you need another technology? No. The total cost of owning an HSPA device – whether it is a phone or a dongle on a laptop or embedded on a laptop will come down massively. We are expecting a billion HSPA subscribers by 2012. The price of handsets for GSM users will come down as low as $30. From Qualcomm’s presentation, a low-end HSPA handset is now $53. This is an affordable technology for the mass market.

Mobile Broadband Internet Centres in Nigeria

We are holding talks with operators in Africa such as Vodacom, MTN. We are very open to working in Nigeria on certain projects but at the moment, there is nothing on ground. You know, things move quickly and we are still considering the projects here having spoken with the operators.

Connecting the Unconnected

Well, it depends on the context in which you are speaking. For example in Nigeria, the licences only came in some seven years ago. Now typically, there is an international average – you look at the average market, it takes 10 years to get 90-95per cent of the population connected. Look at what is happening in Africa, there is a massive amount of investment and this is driving coverage in rural areas. I think about 10 African countries have covered above 90per cent of their total populations and that is going to increase tremendously over the next few years. What we are seeing is a massive connection of rural communities, for example, the village phone concept in which MTN Uganda has connected about 500 unconnected people. So long it is the rural area, connection there includes other basic services and in that way, people are getting leverage in ICT, leverage in mobile network. It is true that there is a dearth of connectivity in the rural areas right now and that is regrettable.

Operators, GSMA Going Green

The GSMA development fund has a programme called ‘Green Power for Mobile.’ It is targeted at re-capitalizing the market; provide scale so that green installations become more affordable because for operators, that is the way out. At the moment, many of the green installations are quite capital intensive. Already we have seen green initiatives happening where solar and wind are used to generate power and operators are investing in these installations.

GSMA and Green Projects

The fund really is used in partnership with equipment vendors – solar panel providers, wind turbine providers. Being a new alternative means to generating power, most of our members are looking at it. If it is affordable and makes business sense and not too capital intensive, they will go for it but it has to be reliable and also has to make sense financially. And that is where the fund is trying to have an impact, to lower the prices of the solution and ensure that they operate at typically grade specifications that operators demand. When power is out, the network can be interrupted, calls drop and no one is happy.

Removal of Mobile Specific Taxes and Rural Connectivity

Obviously, people in the rural areas are poorer than those in the cities and affordability is a critical factor. When you impose specific taxes on handsets or airtime, it increases the price and makes services less affordable. It makes it harder for people in the rural areas to connect. Effectively, what these taxes do is constrain the market size, making products and services affordable by only a few people. We are not saying remove Mobile and Mobile services taxes; we are saying treat it like a normal good, not like diamond or caviar.

GSMA Projects for Africa

We are doing a lot in East Africa – in refugee camps. We are connecting refugee camps in Uganda and Rwanda with MTN and Zain’s ‘one network.’ We have leveraged on those to provide connectivity for places you could not imagine possible. There are lots of activities going on there.

Highlights of Abuja CTO

Well, the last time I came here, probably six months ago, I had a lot of calls dropping from my network but this time, I have not had a drop call yet and I am very impressed. So, I think the quality of service issues should be addressed here in Nigeria and I think the operators due to their investments are committed to building capacity and extend their network. I am very happy to see that because it is really happening; and also the roll out of Mobile broadband again, being able to connect my laptop through HSPA – it is all becoming fantastic!

African Regulatory Bodies and Growth of Telecom

I think the regulatory bodies are doing a very good job and what our members need is consistency and transparency and when you have that; when you have a regulator and a government that do not seek to get windfall from the industry now but seems to partner the industry for the long term, that is when you see fantastic results. That is why our members invest as much as their potential. When you see inconsistent regulation, when you see government demanding windfalls from the industry, say from licences; that is when you see constraints in investment; that is when the potentials to invest plummet. We did the research and saw how regulatory inconsistencies can reduce investment by 25% in sub-Saharan Africa and as you probably know, our members have committed to investing $50 billion in Africa for the next 5 years. This is the amount for GSM alone. You will also have investments for CDMA and probably fixed lines. What is going to be very important in underpinning the mobile broadband age in Africa, I think is open access on the sea cable linking Africa to the rest of the world, providing an umbilical cord to the global economy. Those are critical. A cable from West Africa to the rest of the world, I think has a lot of commercial potentials and can deliver a lot of values. So, guaranteeing regulatory consistency means that we might actually increase that investment by $12.5 billion, amounting to $62.5 billion.

Challenges to Growth of Telecoms in Africa

A lot of the challenges have to do with the infrastructure – you talk about getting network to rural areas, there are no roads, there is no electricity, there are no distribution points. For example, if our members in Europe want to connect someone in a very rural area, they have the capacity to do so – electricity, roads to carry out maintenance and other cost effective factors powered by infrastructure. That is not the case in Africa. I believe there is a strong argument for the telecom sector to work in conjunction with other infrastructures in the area – power, roads, railways – and leverage on those. I think also in Africa, electricity is maintained by the state; there is the need to liberalize this sector. I know certainly that in some countries, Mobile operators invest in generators and then provide electricity. They are effectively doing the job of the electricity company. For the investment in Mobile broadband, they are going to need 6 transmission pipes for fibre to effectively carry all these data and doing that in an affordable and efficient manner means you have to look across the industry to see where you can effect a change.

Competition Between GSM and CDMA in African

I think there has been competition particularly as fixed lines have used CDMA at the 450 level, which is quite a good spectrum for them. But the fixed line operators are suffering greatly. In Kenya, they have the CDMA network but they have had to now have a GSM network. Across the world, we are seeing CDMA operators replacing their network with GSM. I think the CDMA market share would decline significantly over the next few years while Mobile broadband would take up that share.

Mobile broadband

One of the issues is about affordability which is the bottom-line particularly in Africa. I think that the great demand for broadband needs the services delivered in an affordable way. How do you do that? How do you issue the licence? How much does the government want to licence the operators for these technologies? In Tanzania and South Africa, operators have been given long term licences and they have not been charged a premium for Mobile broadband services. The NCC would play a critical role in ensuring that there is enough spectrum here for Mobile broadband.

 


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FG Offers to Support TStv to Relaunch with Pay per View Model

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National Broadcasting Commission (NBC) has pledged to give necessary support to TStv Africa as the indigenous digital satellite TV service begins full operation with pay per view model on October 1, 2020.

FG Offers to Support TStv to Relaunch with Pay per View Model

Professor Armstrong Idachaba, acting director-general of NBC, made the promise on Monday in Abuja when the management team of TStv paid him an official visit.

The visit was to inform him of the company‘s readiness to commence full operation across the country on October 1.

TStv Africa is a wholly-owned Nigerian innovative multi-channel outfit which had promised to operate a pay per view model for the benefit of Nigerians.

Idachaba said: “We promise on our side that we will continue to support you.

“At this time, I think that the major issue confronting the PayTv sector is the area of giving Nigerians option of deregulating purchasing capacity in terms of pay as you go concept.

“We believe this will give you the visibility if you remain committed to the idea.

“We welcome that option and wish that it serves as a stimulant and as a progressive index for other pay-TV operators to adopt.

“Some of them have come up with a lot of excuses why pay per view is difficult and why it is not doable.

“We want you to be the galvaniser to prove the naysayers wrong that this is doable in the interest of Nigerians.

“Once you begin and you make a success of it through increased subscription base, we are sure that others will be drawn into it as it happened in the telecommunication sector.”

Idachaba said the NBC is committed to promoting local participation in the nation’s broadcasting industry, especially in the pay-TV sector, to create jobs and provide diversity for Nigerians.

He acknowledged the challenges TStv had faced over the years and encouraged the company to remain focused.

“We are aware that it has been very challenging for you.

“All over the world dominant players will always want to remain in a dominant position.

” Those who want to survive will also have to take the courage to do so,” he said.

The Acting Director-General, however, admonished the firm to refrain from any activity that would give Nigeria a bad name.

“If you are acquiring rights, you must make sure that your rights are legitimately acquired.

“You must make sure you follow the rules of engagement strictly, study the broadcasting code strictly to have a robust future ahead of you,” he said.

Earlier, Dr Echefu Bright, managing director and CEO of TStv, said they were at the NBC to seek the commission’s support to have a peaceful roll out on October 1.

He said the outfit also visited the NBC to officially present samples of its decoders to the commission and thank the management for its support.

Bright gave an assurance that the novel pay per view concept was sacrosanct.

“The model is what we have experimented and implemented and it works and we have done everything we need to do for it Nigerians to benefit.

“Beyond that, we have enough boxes on ground that will cover the entire country,” he said.

Bright also gave an assurance that with the Oct.1 roll out, every part of the country would be covered.

“We currently have a dealership in virtually every state in Nigeria and as I speak to you now our goods are already with them for October 1 rollout. The coverage from day one will be across Nigeria,”

On sports products, he said the firm has Laliga as well as the FA Cup and  Euro Cup 2021 rights.

 


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Why Businesses Should Take a Long-term Approach to People, Product, and Customers

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By Andrew Bourne, Region Manager, Africa, Zoho Corporation,

Business success is perceived differently today. Buzzwords like maximization, venture-backed, growth hacking, and well-conceived exit strategies (like IPOs or acquisitions) define entrepreneurial success in the current age. In a mad rush to show high quarter-on-quarter growth rates, corporate leaders have forgotten that the true value of a business is how long it stays relevant in the market and instead focus solely on transient growth spurts even if they cost profits.

Any business, no matter how big its initial success, needs to take a long-term approach if it’s to avoid being one of history’s almost-rans. This applies to every aspect of the business, including, people, products, and customers.

 

Invest in People

When you are a new company working on developing deep tech, discovering talent and retaining them is a challenge. Try to create and slowly nurture a pool of capable workers who will gain domain expertise over time. At Zoho, in order to sustain our long-term R&D efforts, we initially kept the teams small and worked with people who were committed to learn and understand the domain.

Patience is the key when you cultivate talent in-house. As people refine their skills and gain deeper domain knowledge, they gradually bring their learning to the business and build a solid offering that will stand the test of time. Ultimately, it’s the culture of experimental learning that you build which keeps you going and also motivates people to stick around for the long haul.

 

Build a product that can pivot and adapt

Equally important is to take a long-term approach to your product. You might be selling something simple today, but you need to be able to build on that. Take Amazon, for example. It started out selling books and gradually built out to become a trillion-dollar company. It hasn’t just focused on e-commerce either. Amazon Web Services (AWS), its cloud-computing division, keeps more than 40% of the internet up and running.

The lesson here is that long-term thinking isn’t just about having a product plan and sticking to it. It’s also about adapting to any future opportunities that present themselves. Whatever sector you operate in today, it will see disruptions sooner or later. If you can adapt to those changes, or find new opportunities in other sectors, you will be better placed for continued success than your competitors.

 

Keep up with customer expectations

Finally, you need to take a long-term approach to your customers. If you are constantly gaining new customers but not retaining them, you’re unlikely to see real success. Returning customers routinely spend more money on brands they’re loyal to. People are also more likely to recommend others to businesses they have had a good experience with. Simply put, it just makes business sense.

But taking a long-term focus with your customers isn’t just about the direct touch-points you have with them. Everything, including the software solutions you use, should have the customer at heart. For example, a unified tool which allows you to instantly see every interaction a customer’s had with your business (be it via voice, email, or chat), will put you in a much better position to serve them than trying to work with several different products.

Taking this long-term approach might feel overwhelming initially, but it’s much more likely to pay off than simply trying to survive from quarter to quarter. After all true success is built over time.


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CBN Pulls Rate Cut Trigger, King Dollar Returns

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By Lukman Otunuga, Senior Research Analyst at FXTM,

In a move that caught investors off-guard this week, the Central Bank of Nigeria (CBN) slashed interest rates by 100 basis points bringing the MPR to 11.5%. Given how inflation has been above target since 2015, rates were expected to remain unchanged for the rest of 2020 and possibly early 2021.

 

The question on the mind of many is whether the rate cut will achieve the desired effect by stimulating consumption and economic growth? Ongoing border closures and disruptions created by COVID-19 have pushed inflation to levels not seen since March 2018 above 13.20% while a drop in the production and price of Oil continues to rub salt into the wound. While looser monetary policy could support growth, it may come at the cost of rising inflation and weaker Naira.

 

Over the past few months, central banks across the globe have deployed unprecedented measures to defend their respective economies against the coronavirus menace. However, fiscal policy has been identified as the sharper tool with governments across the world providing a critical lifeline to keep the wheels of their respective economies rolling.

 

Outside of Nigeria, King Dollar made a return by appreciating against every single G10 currency. In times of uncertainty, everyone wants a juicy piece of the world’s most liquid currency. As coronavirus cases rise in Europe and other parts of the world, the flight to safety is likely to boost appetite for the Dollar. This is bad news for many emerging markets currencies, especially those with high Dollar-denominated debt.

 

On the commodity side, Oil prices remain heavily influenced by demand-side factors and the state of the global economy. Prices are likely to remain stuck around the $40 regions in the near term, especially If another round of possible lockdowns hit Oil demand. Looking at the technicals, WTI Crude is under pressure on the daily charts. If prices are unable to break away from the sticky $40 regions, the next key point of interest remains around $38. A weekly close above $41.50 could pave a path towards $43.


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