RSS
 

Archive for January, 2009

China marches on in Africa despite global downturn

29 Jan

Chinese businessmen are taking a long-term view and pursuing strategic expansion in Africa even though China’s multiplying investments on the continent have lost some lustre in the global downturn.

Chinese companies have pledged tens of billions of dollars to Africa in loans and investments mostly to secure raw materials for the world’s fastest growmg economy That long-term interest remains intact, despite a worldwide economic slump that has hit China’s exports to the rich world and a sharp decline in Africa’s mineral shipments to China.

China-Africa trade has surged by an average 30 percent a year this decade, soaring to nearly $107 billion in 2008.

“China is in Africa for the long term, and strategically;’ said David Shinn, a former US ambassador to Ethiopia and Burkina Faso who teaches at George Washington University’s Elliott School of International Affairs.

“They will not veer from this,in my view;’ he said.

Far from retreating, many Chinese businessmen are hunting for bargains. Chinese and Indian firms have expressed interest in taking over Zambia’s top cobalt producer Luanshya Copper Mines since it halted operations in December, Zambian state media reported.

South Africa’s Standard Bank, itself 20 percent owned by the Industrial and Commercial Bank of China (ICBC), said last month it was advising Chinese mining clients on buying opportunities in Africa and elsewhere.

“They are looking at 2009 and saying ‘This is a time we see as a very big buying opportunity. We’ve got the backing from government, we’ve got the financial means ” Thys Terblanche, the bank’s head of mining and metals investment banking, told Reuters.

Beyond mining, Chinese state companies are pushing ahead with strategic energy sector investments and infrastructure; private outfits are continuing to expand in technology areas. “Some developed Western countries hit by the financial crisis are reducing their investment in Africa.

Objectively, this is a powerful opportunity for Chinese businesses to expand their investment and market share in Africa;’ Cui Yonggian, a former Chinese ambassador to the Republic of Congo and Central African Republic, told a China-Africa trade forum this month.

Trade with Angola, China’s biggest source of African crude oil, reached $25.3 billion in 2007 and Beijing has offered Luanda $5 billion in oil-backed loans.

Shenzhen-based Huawei Technologies, China’s biggest telecoms equipment maker, is pushing south from its established stamping ground in North Africa.

“I see no reason why they would want to decrease their investments in the telecommunications sector because that’s profitable for them;’ said George Washington University’s Shinn. “It wil1vary according to sector and country … It’s very dangerous to generalise about the China-Africa relationship;’ he said. “They will certainly make tactical retreats where the economy requires it ” Even China’s slower economic growth far outpaces that of other major economies. Beijing says it can achieve 8 percent growth in 2009.

The lMF says it may cut its forecast to about 5 percent, from the 9 percent it predicted in October.

Delay new projects While competitors1ay off workers and delay new projects, China Non-Ferrous Metals Corporation is opening a copper smelter this month in Chambishi town, which Zambia has transformed into a tax-free economic zone to attract Chinese investment.

Zambian President Rupiah Banda and China’s Trade Minister Cheng Deming launched a second economic zone this month near the capital Lusaka, where Chinese firms will assemble electrical goods such as television sets and cellphones for export.

“Zambia is still an attractive investment destination (and this will give) confidence to existing firms operating here not to start scaling down their operations;’ Banda said. Zambia’s Copper Belt is witnessing a growth in Chinese deals. “In Zambia, mining investment is large-scale and long-term;’ said Xing Houyuan, director of multinational business at China’s Academy of International Trade and Economic Cooperation, which is affiliated to Beijing’s Commerce Ministry.

“I don’t see any likelihood of a pullback… Companies won’t give up investment plans because of the short term.

The biggest impact is likely to be on projects that are still in the planning stage, where the money had not really been committed yet,”Xing said.

In Liberia, China Union has just signed a $2.6 billion contract to develop the Bong iron ore deposit. China also insists the slowdown will not dampen interest.

“We will continue to have a vigorous aid programme here and Chinese companies will continue to invest as much as possible in Africa because it is a win-win solution ‘Chinese reign Minister Yang Jiechi said in South Africa in mid-January However, the global slowdown has forced some Chinese businesses to close operations in Africa and prompted a rethink of some of the multi-billion-dollar mega-deals that blazed a trail across the world’s poorest continent.

Democratic Republic of Congo and Guinea are cases in point.

DR Congo rode the boom in commodities to attract a wave of foreign investment in its rich but long-neglected copper, cobalt, gold and other mineral resources after post-war elections in 2006.Now that dream is fading.

“We have one processing mill and several workshops in Congo. We have closed them. There are many Chineseinvested firms in Congo and I understand most of them have shut down their operations;’ said a marketing director in China’s Zhejiang, which supplies cobalt and nickel compounds for use in mobile phone batteries.

Source:
BD Africa

 
No Comments

Posted in economy

 

DAVOS-Soros urges U.S. to create “good bank” as aggregator

29 Jan

DAVOS, Switzerland, Jan 28 (Reuters) – The United States needs to recapitalise its banks but should consider the creation of a “good bank” when considering how to deal with the toxic assets, hedge fund manager George Soros said on Wednesday.

Speaking to Reuters Television at the World Economic Forum in Davos, Soros said the planned U.S. fiscal stimulus and proposals for creating a “bad bank” to pool banks’ bad loans and assets may help ease the economic crisis stateside.

But he said these were “only palliatives”.

“They need a thorough reorganisation of the mortgage system and you have replenish the equity of the banks,” Soros told Reuters. “That now would require an injection of about a trillion and half dollars — much more than if they had done it previously under the TARP (the $700 billion Troubled Asset Relief Program agreed by Congress last year).”

Soros added: “The well has been poisoned by the way the TARP money was used.

“It needs a good bank/bad bank solution, but I would do it differently than what is proposed,” the Hungarian-born speculator-turned philanthropist said.

“I would keep the capital of the banks together with the bad assets in the bad bank and then create a new bank with the good assets of the bank and the recapitalise that, giving the shareholders the right to put in more money,” he said.

“Without this the banks will not lend, because they know there is a lot of deterioration coming.”

Earlier Soros told a press lunch that the “financial structure we used to take for granted has collapsed” and everyone was in a “state of shock” as the financial storm spread internationally and into the real economy.

He said the bankruptcy of Lehman Brothers investment bank last September was a “watershed event” and the financial system was now on “artificial life support.”

Source:
Reuters

 
No Comments

Posted in business talk

 

Rwandatel to import more GSM enabled phones

17 Jan

The company has also availed the U190 Chinese phone at Rwf11,000, which is considered to be the cheapest phone in the history of Rwanda

Rwandatel, the country’s oldest telecom company is to import more GSM mobile phones following their growing demand on the local market.

Currently, the U120 Chinese phones manufactured by Huawei are out of stock after just a month since their introduction on the local market during the launch of new network service technology.

GSM is an acronym for Global System for Mobile communications. GSM enables subscribers to conduct wireless video calls, and access broadband Internet among other uses.
At only Rwf19,000, the phone’s enormous functions and accessories such as radio, camera, and call conferencing were believed to have raised unanticipated demand. Within the first week of operation, the company had recorded over 55,000 subscribers.

More than 120,000 active subscribers were registered in three weeks. According to company’s Chief Executive Officer (CEO), Patrick Kariningufu, the phones are in transit and are expected in the country with three to four weeks.

Without divulging more details, he said that they will be availed on the market at a cost higher than the first price of Rwf19,000, since they cost more than the price at which they are sold.

Adding, “Despite government’s waiver on handset, the total cost of shipping handset exceeds Rwf19,000 .”

Kariningufu disclosed that the first batch of phones had a subsidy of about 65 percent on each  one yet the company’s sole responsibility is not selling handsets but rather selling airtime and SIM cards.

The company officials also attributed the increasing number of subscribers to better network and service delivery to the unexpected number of subscribers within its infancy of operations. Some of the better services include doubling of credit as bonus and clarity of the network.

The comapny has also availed the U190 Chinese phone at Rwf11,000, which is considered to be the cheapest phone in the history of Rwanda.

Rwandatel embraced 2G, 3G, and GSM technology early December 2008, after its acquisition by LAP Green networks a subsidiary of Libyan African Portfolio. Prior to switching to 3G technology, it was operating under its CDMA technology.

Meanwhile the company jointly owned with the National Social Security Fund of Rwanda is set to construct 86 masts by end of February this year in a bid to bolster its national network coverage.

Source:
The News Times, Rwanda
Friday, 16th January 2009

 
No Comments

Posted in technology

 

George Ayittey: Cheetahs vs. Hippos for Africa’s future

17 Jan

There are two generations in Africa according to economist George Ayittey. The Cheetah Generation and the Hippo Generation. Cheetahs seek knowledge, innovation and look for solutions to their problems while Hippos blame others, seek handouts and generally drive our continent to the ground. All this information is courtesy of Professor George Ayittey’s book “Africa Unchained”.”

The kind of thinking Ayittey has been able to drive in young Africans seeking new ways of thinking is becoming evident daily. Below is a YouTube presentation of Ayittey’s Cheetah vs. Hippo Generations talk during the TED Conference in Arusha, Tanzania in June, 2007.

George Ayittey: Cheetahs vs. Hippos for Africa\’s future

In Ayittey’s own words, “The Cheetah Generation is a new breed of Africans who brook no nonsense about corruption. They understand what accountability and democracy is. They are not gonna wait for government to do things for them…Africa’s salvation rests on the backs of these cheetahs.”

 
No Comments

Posted in innovation

 

Tullow Oil makes largest oil catch

11 Jan

Saturday, 20 December 2008

KAMPALA, UGANDA – Tullow Oil has made what it has called potentially the largest find in an eight-well drilling campaign in the Butiaba area of the Lake Albert rift basin.

With many prospects still to drill in the Butiaba area and across the basin on shore and offshore, a company statement quoted Aidan Heavey, Tullow’s chief executive officer saying the prospector is now certain that the commercial threshold for development has been exceeded.

Heavey said Tullow has assigned a dedicated team to deliver a commercial development plan for the overall basin.

In April 2008, Tullow commenced what it termed as a major drilling campaign in the Butiaba area targeting an overall reserve potential in excess of a billion barrels.

The Butiaba campaign was preceded by successes in two drilling campaigns in the Kaiso-Tonya area and the Kingfisher field.

“2009 promises to be a landmark year for Tullow, Heritage and the Ugandan government as we work together to realise the potential of the region,” Heavey said.

Tullow’s latest find at the Buffalo-1 exploration well in Block 1 encountered 15 metres of net gas pay and over 28 metres of net oil pay.

“Although at an early stage of evaluation, this discovery is potentially the largest in the Butiaba area to date,” the statement reads in part.

Tests and samples, it said, have confirmed the presence of dry gas and moveable oil that has been recovered to the surface.

The gas and oil columns encountered are 48 metres and 75 metres respectively with the potential to be even larger.

Buffalo-1 is the fifth successful test of the Victoria Nile delta play fairway within the Lake Albert Rift Basin and was drilled 16 km north-east of the Warthog-1 and Kasamene-1 discoveries.

The Bufallo-1 result extends the play further north and de-risks several adjacent prospects, located in Blocks 1 and 2, which are scheduled for drilling in 2009.

“The discovery of another material oil field at Buffalo in the highly prospective Victoria Nile Delta has maintained our 100% success record in the Lake Albert Rift Basin,” Heavey was quoted as saying.

The well has now been suspended as a future producer and the rig is being moved five kilometres south to the location of the Giraffe prospect where drilling has commenced.

Prior to the Bufallo-1 discovery, the Butiaba drilling campaign had thrown up discoveries including Karuka, Kasamene and Kigogole in Block 2, and Warthog in Block 1.

“The discoveries at Kasamene and Warthog are of a significant size and have de-risked the remaining prospectivity in the area,” a company statement said at the time.

In Block 3A, the Kingfisher prospect (part owned by Heritage Oil and Gas), with 300 million barrel upside potential, was drilled and tested in early 2007.

The Kingfisher-1 well intersected three significant oil-bearing intervals and tested at flow rates in excess of 14,000 bopd, though the well did not reach the primary target.

The Kingfisher-2 appraisal well was completed in August 2008 and flowed at a combined rate of over 14,000 bopd from three reservoir zones, thereby proving up a significant discovery.

The Kingfisher-3 appraisal well, which is testing further upside potential, was spudded in late September and is currently at a depth of 2,670m. The next well in the Kingfisher campaign will be Ngassa-2 in Block 2, which is scheduled to spud in February 2009.

In 2006, Tullow made its first oil discoveries in the Kaiso-Tonya area (on-shore) in the Albertine Graben where it discovered oil at four locations.

Tullow is working closely with the Ugandan government to achieve first production from the region via an EPS in the second half of 2009.

The EPS will produce 4,000 barrels of oil per day to a new processing facility and power generation plant.

Source:
East African Business Week

 
No Comments

Posted in investment

 

Libyans plan Africa’s largest telecoms group

11 Jan
Saturday, 06 December 2008
KIGALI, RWANDA – LapGreen Networks, a subsidiary of Libyan African Investment Portfolio, plans to build ‘the biggest’ telecommunications company with a single network in Africa. 

“LapGreen plans to build a big telecoms company in Africa and this company will be built by African skills,” the managing director of LapGreen Networks and Uganda Telecom, Eng. Abdulbaset Elazzabi last week told EABW in an exclusive interview in Kigali.He said this will be realized by expanding their network from one country to another.

“As you see, to build a network, we are expanding our network daily from country to country. By 2010/11, we will be one network from East to West Africa and this network will be built by Africans, bringing African countries together as one country,” he said.

Elazzabi, who also serves as the chairman of Rwandatel, a telecoms company in which LapGreen owns 80% stake valued at US$100million, was in Rwanda to mark the company’s launching of GSM and 3G networks.

LapGreen Networks, valued at US$500million, is owned 100% by the US$5billion Libyan African Investment, an investment arm of the Libyan government.

It is managed by Eng. Abdulbaset Elazzabi, Mr. Bashir Saleh Bashir serves as board chairman and Dr. Ali Shamakh, chairman of Tamoil Africa is a board member.

LapGreen which specializes in telecommunications has operations in Uganda, Togo, Niger, Rwanda, Ivory Coast and Gabon. It deals in mobile, fixed line telephony and internet connections.

LapGreen is the majority shareholder in Uganda Telecom (UTL) and currently commands more than two million mobile phone subscribers and 50,000 fixed line subscribers. The company, according to Elazzabi, is the largest provider of internet connection in Uganda.

In Rwanda, LapGreen is the majority shareholder in Rwandatel, a formerly government owned telecom company, which LapGreen acquired in October 2007, after paying US$100million, and pledging to invest US$87million.

Rwandatel, before launching GSM and 3G networks last week, had 55,000 subscribers, majority of them accommodated on fixed line.

In just a period of three months, the company targets to mobilize 350,000 subscribers on its GSM and 3G networks in its quest to eliminate CDMA technology on mobile phones.

With a call center operating 24/7 hours in three shifts with 24 staff per shift, Rwandatel has the infrastructure capable of accommodating 2million subscribers on hardware and one million on software. By the end of 2009, Rwandatel targets to win one million subscribers on its GSM network.

The same as UTL in Uganda, Rwandatel is the largest provider of internet connection in Rwanda, with the biggest chunk going to the government, though the private sector is also slowly increasing in terms of internet connection consumption.

Elazzabi further said they have a project to provide Wimax (wireless) internet connection in Rwanda as they expand their copper and fiber optic cable networks.

With GSM network coverage allover the country, Rwandatel has launched services with cheaper tariffs compared to its major competitor, MTN Rwanda.

“Our target is to make Rwanda an ICT hub and a knowledge based country,” Elazzabi disclosed.

Source:
East African Business Week

 
No Comments

Posted in technology

 

Investor reaps Sh2.5b from sale of Equity Bank shares

11 Jan

January 8, 2009: Dakar-based private equity firm AfriCap has sold its 15 million Equity Bank shares, becoming the first large company to harvest its investment since last August’s unlocking of the golden handcuffs placed on principle shareholders when the bank went public in 2006.

The firm sold the shares for Sh2.5 billion, reaping one of the highest returns from equity investment in Kenya over a five-year period.

The transaction was made two days before the New Year in one of the largest single daily transactions at the bearish Nairobi Stock Exchange (NSE) in recent months.

Mr James Mwangi, the bank’s chief executive officer, was unavailable for comment but three independent sources who sought anonymity confirmed the AfriCap sale.

AfriCap was one of the seven large shareholders, who the Capital Markets Authority (CMA) had barred from selling Equity Bank shares before August, 2008.

By the end of March last year, private Equity firm Helios EB held 24.23 per cent of the bank’s shares, British American Investments had 10.73 per cent, while Mr Mwangi had a 5.3 per cent stake.

Mr Nelson Njoroge and Mr John Mwangi held six per cent and 4.58 per cent respectively, while Africap and Equity Bank’s Employee Share Ownership Plan each held 4.02 per cent. The rest of the shareholders in the bank had less than 2.93 per cent shares.

Stock traders said most of the shares that AfriCap sold were bought by local institutional investors. Data from the NSE indicates that a small tranche worth Sh2 million had been sold to a foreign investor.

Market observers say Africap’s divestiture from Equity Bank would have taken months as the broker shopped for buyers willing to take up the shares in large chunks.

In a market as small as the NSE — as compared to other continental heavyweights such as the South African, Nigerian or Egyptian— the movement of 15 million shares worth Sh2.5 billion in a bearish market took many players by surprise.

Stock market analysts say that the sale was typical of a foreign investment firm looking to reflect the gains in its books before the end of a financial year.

That the sale was made through the NSE’s prompt board — which allows settlements to be made within a day of the transaction — is an indicator of the private equity firm’s intent of reflecting the Sh2.5 billion in its books.

Image 

Equity Bank branch in Nairobi

“The sell-off was probably to facilitate other purposes such as a need to have quick cash for a potential investment opportunity or a major restructuring of an investment strategy before the end of the year, especially if it was probably a prompt board transaction,” says Mr Alex Muiruri, a research analyst at CCS Financial Solutions Ltd.

Equity Bank closed 2008 as the only stock at the NSE to post positive returns.

As at December 31, 2008, Equity share was priced at Sh176 marking a 3.3 per cent year to date rise compared to other listed blue chips that registered zero or negative growth.

But the volatility witnessed on the stock in recent times especially before material announcements, has left many investors at a cross-roads.

In the week leading to the sale, the share averaged Sh165, then dipped on December 29 to Sh155 before jumping to Sh167 on December 30 and Sh176 on December 31.

Before listing

AfriCap entered the then Equity Building Society in 2003 with the purchase of a 16 per cent stake for Sh120 million.

Since then, the bank has never sold its shares to any investment firm apart from 50 per cent to employees.

The staff shares are held by a trust registered as Equity Bank Employee Share Ownership Scheme.

Since AfriCap never took part in the private placement that led to the conversion of the building society into a commercial bank in 2006, AfriCap’s holding was reduced 11.04 per cent as other fresh investors joined the firm.

In 2005, AfriCap agreed to sell 50 per cent of its stake to the bank’s employees, a move that furthered reduced its stake to 5.52 per cent just before the listing of the bank at the NSE in August, 2006.

Being among the key shareholders, AfriCap was among the investors in Equity Bank that were locked in by a CMA directive barring them from selling their shares before two years were over.

But after Helios entry in later 2007, AfriCap’s share holding along with those of other key share holders were diluted as the bank created an additional 60 million shares since it has 300 million authorised with 270 million listed at the NSE.

The locking up of shares is meant to assure investors buying into the listing firm that principal shareholders are not using the listing as an exit strategy.

Keeping principal shareholders who are also managers in the firm bound the fate of the executives and the bank together in the event it turned out to be a loss-making venture.

By holding on to the shares even after the lapse of the lock in period, the directors would be sending a strong positive signal to the market that they believe in the bank’s business model and that they are confident of its future performance.

Source:

BD Africa 8th Jan 09

 
No Comments

Posted in investment

 

Kenya in $423billion ambitious plan to make Nairobi top African

11 Jan

Saturday, 20 December 2008

NAIROBI, KENYA – Kenya’s government requires KShs33 trillion (about US$423billion) to realize an ambitious plan that could see capital city Nairobi transformed into a modern metropolis to match the likes of Paris and New York.

The Nairobi Metro 2030 unveiled last Monday by President Mwai Kibaki will see the huge amounts of money pumped into world class infrastructure, a modern transport system and slum upgrading to realize a modern city.

The plan might be more of a pipe dream as no immediate strategy has been put in place to realize the mind-boggling amounts of money considering that the country’s budget is far less than one trillion in a whole year.

The president and organizers of the plan only appealed to development partners and for strong working partnerships between the government and the private sector to realize this 22-year development strategy.

“The government is aware that the success of this plan requires massive resources.

This requires a comprehensive funding mechanism. It is therefore my humble appeal to our development partners and the private sector to help realize this dream,” Kibaki pleaded at the launch.

Under the new plan, the metropolitan area of Nairobi will be expanded from the current 40 square kilometers to 100 square kilometers, a plan that will see some 13 currently independent municipalities dissolved to join the metropolis.

Kenya currently has a fully fledged Ministry of Nairobi Metropolitan Development, the first ever since independence and a product of the grand coalition government cobbled after two months of political turmoil following bungled presidential election in December 2007.

The plan is also in line with the country’s development blueprint captured in Vision 2030.

“Towards this end, we are according priority to urban development, and specifically metropolitan development, as one of the driving forces that will propel our country into the status of a middle income rapidly industrializing country,” Kibaki said.

Kenya, under Vision 2030, plans to create and develop metropolitan regions across the country, namely Nairobi, Mombasa , Kisumu-Kakamega, Nakuru-Eldoret, Wajir-Garissa-Mandera, and Kitui-Mwingi-Meru.

Kibaki explained that the decision to begin the implementation of the urban development strategy with the Nairobi metropolitan region is based on the fact that the capital city is the country’s main gateway to the rest of the world.

He however said the local authorities in the Nairobi Metropolitan region are free to retain their independent status as corporate bodies in furtherance of their localized service delivery mandates.

On urban population, the president said there is need for strategic planning that will enable the country to adequately cope with the rapid growth of urban populations. He added that the country must also strategically respond to global trends with efforts being focused on positioning the nation as a leading regional and global stakeholder.

“I am therefore encouraged to note that the Nairobi Metro 2030 strategy has taken note of these developments and is focusing on tapping global economic opportunities, as well as benchmarking service delivery within the metropolitan region to world-class standards,” Kibaki said.

The President observed that the Ministry of Nairobi Metropolitan Development website which he commissioned during the occasion will promote the development of the metropolis region’s strategic role.

He emphasized the need for strong private sector participation, quality social responsibility and civic engagement for the country’s cities to become competitive in the global economy. He asked Kenyans to also change their attitudes and stop viewing urban centres as temporary dwelling places but permanent habitations in which they all have a stake.

“This will ensure that we undertake the necessary investments needed to make urban centers ideal homes for the many people who now live in towns,” the president emphasised.

He also stressed the need for urban planners to re-orient their thinking to focus more on how the country’s cities will look like in a decade or two from today, saying the vision of developing the city of Nairobi into a regional and global services hub cannot be realized without undertaking major innovative reforms.

Prime Minister Raila Odinga said the Nairobi Metropolitan Development Strategy will apart from addressing issues of decongestion, insecurity and poverty, make the city investor friendly and thereby create job opportunities.

Mutula Kilonzo a Kibaki loyalist is the current minister in charge of Nairobi Metropolitan region.

Source:
East African Business Week

 
No Comments

Posted in technology

 

Pay-TV provider GTV puts football at centre of its pitch to Africa

06 Jan

Julian McIntyre tried to make it as an investment banker, but fell in love with Africa instead. He worked at Deutsche Bank in his early twenties and, in his words, quickly came to hate it, leaving at 25 when “I got my first bonus”.

The Briton, who had developed a great affection for Africa while travelling, hooked up with a friend, Peter Gbedemah, to set up a telecoms business, providing infrastructure to mobile-phone companies south of the Sahara.

Eight years later, Mr McIntyre’s company is now GTV, a pan-African pay-TV company. The telecoms business, Gateway Communications, was sold in the summer to Vodacom in South Africa for $700 million (£474.8 million). GTV is what is left – a pay-TV operator aimed at a continent where pay-TV has barely existed, a “test case for African business”, as Mr McIntyre, 33, puts it.

GTV is underpinned by two ideas – football and price. “In Kampala on a Saturday afternoon, you can’t get in the bars, because everybody is watching the Premier League,” he says.

Capturing Premier League rights, in a $30 million, three-year deal was crucial, not least because of the prominence of so many African players in the Premiership – Michael Essien and Didier Drogba at Chelsea and Emmanuel Adebayor and Kolo Touré at Arsenal.

Its studios are in Camden, North London, where GTV provides “coverage with an African slant, based around African players” – and being in the UK means that it can bring the people that the viewers want to see into its studio.

As with Sky in Britain, getting sport coverage right is the way to build the business – GTV also screens Italian Serie A and African football, including the Super League in Uganda, the country where GTV has had the most success.

Getting the price right for football is critical, and GTV’s key proposition is to cut the price to the point where people can afford it, following the example of the boom in mobile phone usage in Africa.

“One per cent of TV owners have pay-television in Africa, compared with 25 per cent in Eastern Europe and 40 per cent in Latin America – and 45 million households have colour television,” Mr McIntyre says.

GTV’s packages cost from $10 to $35 a month – the service carries entertainment and news channels too. The prices are aimed at undercutting the established rivals MultiChoice (owned by Naspers in South Africa) and Canal+, a unit of Vivendi that operates in Francophone markets and provides a service aimed at affluent ex-pats.

GTV, launched in the summer of 2007, has quickly passed 100,000 subscribers in more than 20 countries, including 20,000 in Uganda – less than MultiChoice’s 1.5 million (although that includes 1.3 million in South Africa, where GTV does not operate), and Canal+’s 180,000.

“Africa is an exciting consumer market, going through its first period of sustained economic growth; people need to think beyond security issues,” Mr McIntyre argues.

Even political problems do not necessarily hold business back, he says. Violence in Kenya in the wake of the disputed election this year, did, he admits, lead to a drop in subscriptions, but he says business rebounded when peace returned.

Most subscribers take the top package, to get the football, and, critically, the company allows them to pay using short-term pre-paid top-ups.

GTV, though, is not yet profitable, having invested $200 million to get going, and it has had to raise cash from outside investors, such as Sweden’s Kinnevik vehicle.

Mr McIntyre predicts break-even “at the end of 2009, early 2010”, presumably on at least double the number of subscribers. He remains the largest investor, and he says that he is “not ready to sell” – although “we might be interested in taking a strategic investment” from another media company.

Sub-Saharan Africa may be the last market to discover pay-TV, but GTV shows there is a market to be tapped.

December 5, 2008
times online

 
No Comments

Posted in trends

 

Entrepreneurs gear up for new ICT investments

06 Jan

The ICT sector is set for a good year, with investment opportunities expected to arise from the availability of new technologies, improved access to low priced Internet and telephony, and the increasing integration of technology services in society.

Success in ICT ventures will be dictated by a changing investor environment and a renewed interest in the sector following the arrival of key international fibre optic links that will lower the cost of communication significantly.

The winners in this new landscape will be the business strategists who are able to solve market problems using software technology, or by revamping current market products to offer more enhanced value through innovative use of software, communications or professional services will attract investment.

According to regional research firm IDC, 2009 will see opportunities for IT equipment suppliers and service providers will peak towards the end of the year, which will continue to be maintained thereafter by increased demand.

The international fibre optic cables will see the creation of new business ecosystems that will evolve around cheaper broadband as national and regional players compete based on license entitlements, business alliances, client base, financial muscle, and regulatory environment.

Jan 6 2009
BD Africa


 
No Comments

Posted in technology