ITU is publishing a major new Report on the impact of the financial crisis on the ICT industry, "Confronting the Crisis: Its Impact on the ICT Industry", on Monday 16 February 2009, when the ITU Secretary-General Dr. Toure is due to speak at GSMA Barcelona on this subject.

The Report covers the major impact of the financial crisis on investment & financing, consumer demand, regulation and changing telco strategies in response to the crisis. It also examines the impact of the crisis on different technologies, including mobile telephony, WiMAX and Long Term Evolution (LTE), broadband Internet and NGN and the satellite industry.

The Report features invited insights from leading experts from the World Bank, OECD and UNCTAD, as well as industry analysts including Informa, Analysys Mason, Deloitte & Touche TMT Predictions, Point Topic and Maravedis. The leading trade associations, the GSMA and the WiMAX Forum, also contributed insights on the outlook for the mobile and WiMAX industry respectively.  On 16 February 2009, ITU will launch a website to coincide with Dr. Toure's speech featuring all these invited contributions and more, including perspectives on the regional impact from Balancing Act Africa and the Arab Advisors Group.

This Report will be available soon - for further information, please contact pressinfo@itu.int.

The CEO of Celtel Kenya, Mr David Murray, is quoted by the East African Standard as suggesting that there may be a natural limit to the size of the mobile market in Kenya. Mobile communications have been the fastest-growing market segment of telecommunications around the world, not just in Africa,but Mr. Murray warns that, despite the growth, the country’s economy may not be able to support more than three operators. Mr. Murray is quoted as saying that "the economic reality is that if you look around the world, countries bigger and wealthier than Kenya cannot support four operators."

The Kenyan mobile market is divided between Celtel Kenya and Safaricom, Econet Wireless and France Telecoms, who have just acquired the controlling stake in Telkom Kenya and is expected to rollout mobile phone operations in the country. With a population of 34 million, mobile Average Revenue Per User (ARPU) is less than $10 per month.

Murray reckons that survival will be determined by creativity on the marketing front, product development and network reliability. One example is Celtel International's One Network service, the first-ever borderless mobile network in the world without roaming call surcharges or payment to receive incoming calls. The One Network service has recently been extended to cover twelve countries, equivalent to an area more than twice the size of the European Union.

To read the full article, please see here.

WiMAX Counts.Com reports that WiMAX has expanded rapidly in Africa over 2006-2007. At the beginning of 2006, the WiMAX subscribers in Africa numbered just a few thousand. But by the end of 2007, Africa accounts for more than 20,000 WiMAX subscribers. Users are mostly business customers, who have access to 10’s or 100’s of internal users, in contrast to residential access. Over this year, the subscriber numbers have grown at an average rate of 28% per quarter, and the growth from Q2 to Q3 2007 alone was 36%.

There were several new deployments that took place during the second half of 2007. There are now around 15 commercial deployments of BWA/WiMAX in the region, with around half of them started this year. A further 10 operators are trailing or evaluating the implementation of a WiMAX network.

The lack of traditional fixed line telecom infrastructure in the region opens up big opportunities for WiMAX to provide broadband Internet to the many rural and underserved areas that cannot be addressed with wired technologies. African operators are poised to spread the benefits of WiMAX. There is also a low penetration of broadband subscribers. Out of the 922 million inhabitants of Africa at the end of 2006, only 43.6 million were Internet users, and only 1 million had a broadband connection.

For the full article, please see here.

Mobile phone service provider Celtel has expanded its roaming service offer to 12 African countries, enabling around half of all African mobile phone subscribers to communicate across national borders, without incurring extra costs.

Celtel's roaming service is now available in Nigeria, Niger, Chad, Sudan, Burkina Faso and Malawi, as well as the Republic of Congo, Democratic Republic of Congo, Gabon, Kenya, Tanzania and Uganda. Launched a little over a year ago, Celtel's roaming service will extend services to a population of nearly 400 million people, living in an area twice as large as western Europe. "This is a feat that not even European firms have achieved," said Anna Othoro, the marketing director at Celtel. Although Celtel is yet to announce an upgrade to 3G services like its competitor Safaricom, market-watchers believe Celtel's strategy could be a high-volume strategy targeting larger numbers of users to use more accessible services.

For more information, please see the article in the Business Daily.

Discussions on the impact of submarine cable connectivity on the cost of Internet connectivity are hotting up in Kenya, according to Business Daily Africa.  Following the landing of the first submarine fibre optic cable in the East Africa Marine System (TEAMs) project scheduled to arrive in Mombasa in Q2 2009, the Kenyan Government has projected that Internet connectivity costs are likely to fall to $500 (Sh33,000) per megabit per month (a reduction of more than 80 per cent from the current average of $5,000 per Megabit).

The submarine cable is expected to land in Mombasa by second quarter of 2009 and terminate in Fujaira, Dubai. The TEAMs cable has a projected life span of 25 years. The Kenyan government has a 40 per cent stake in the project, with Dubai’s Etisalat holding 15 per cent. A 45 per cent stake has been reserved for private telecommunication companies. So far, Rwanda, Burundi, Uganda, Tanzania and Southern Sudan have expressed an interest in participating in the project.

IT firms, including UUNET, will have to connect to an Internet Service Provider (ISP) based in Fujaira before bringing the service — with a mark-up to local companies. The $500 figure "can only be for the last mile, the layer two services, and the raw pipe — WiMAX or KenStream that you get from Telkom Kenya. There is no IP service that can be sold for $500 per megabit per month,” stated UUNET Managing Director, Geoffrey Shimanyula.

Information permanent secretary, Bitange Ndemo, maintained however that the $500 price was achievable with the a fibre optic cable. Transit costs from Fujairah to Europe and US stands at between $55,000 to $100,000 per year, which Dr Ndemo insists is still in line with the Government’s estimates.

For more information, please read the full article.

The Japanese Ministry of Information and Communication has recently published a report on Network Neutrality, which notes that simply increasing the number of Internet exchanges may not be enough to address Internet traffic flow problems.

In Japan, Internet exchange (IX) points  for ISP peering are concentrated in Tokyo and Osaka areas, with only a few IXs in local regions. In most cases, the local ISP routes its traffic through an IX located in Tokyo or Osaka. However, lines have a high cost burden (even when they are shared among multiple ISPs) and supply on backbone infrastructure is extremely tight.

In order to improve information traffic flow, increasing the number of local IXs in itself would not solve the network traffic problems: "In addition, it is necessary to respond to increases in cost burden and insufficient capacity on the relay backbone. One important measure is to equip local IXs with cache servers for information aggregation. Fetching information from a local cache would ease network pressure and improve the Internet usage environment for all local users. Therefore, from the viewpoint of cache aggregation on local servers, it is appropriate for administrative authorities to support cooperation between related operators and to take necessary measures (for example, by considering how the system should deal with issues such as copyright protection)" (page 29).

For more information, please see here.

According to its third quarter 2007 results, MTN Group serves 54.1 million people in 21 countries, making it the largest operator in Africa and the Middle East, with over 64,000 new customers a day. September figures show that the number of MTN's subscribers jumped 12% since June.

MTN's South African network is the cornerstone of its activities, with subscribers rising 3% to 14 million. Nigeria is MTN's other cash cow, with 14.9 million customers each spending an average of $17 a month. That represents a 7% increase in customers, as well as a healthy 4% rise in their spending. MTN is investing heavily in improving infrastructure in Nigeria to cope with the growing demand.

MTN's Middle East and North Africa region saw 36% growth in customers, with its new Iranian network winning 1.7 million more users. Irancell serves 3.7 million people, each spending an average of $11 a month.

For further information, see Issue 378 of Balancing Act Africa here and the Session One background paper prepared for the Connect Africa Summit.

Geocell is expanding its portfolio of 3G services.  Having launched 3G service in 2006, the company reports that the launch of value-added services has helped it increase its subscriber base by 37.5% year-on-year in 2007 and boost customer loyalty. Today, GEOCELL offers around 100 services to more than 1.3 million customers.

GEOCELL currently serves more than half of all mobile users in Georgia, with services available on 95% of the populated area of the country.

For more information, please see here.

Nigeria is celebrating the six year anniversary of the launch of GSM services in the country, according to the Nigerian Communications Commission. Through the award of five mobile licenses, the NCC facilitated a phenomenal expansion of telephone lines in Nigeria from just 450,000 operational lines in May 1999 to over 38 million lines by July 2007, boosting teledensity growth from 0.4 per 100 inhabitants to 24 per 100 inhabitants. The capacity for growth in the number of phone lines in the country over the next decade remains quite high, as some parts of the country are yet to be covered.

In January 2001, three licenses were awarded to ECONET Wireless now (CELTEL), MTN and MTEL, a subsidiary of the incumbent operator. Nigerian Telecommunications Limited (NITEL) was also awarded an operating license as a National Carrier. In 2002, a fourth Digital Mobile License was issued to Globacom (Glomobile). A fifth Mobile License (with GSM spectrum) was awarded to Emerging Market Telecommunications Services Limited earlier this year. Blossoming competition in the mobile market has led to reductions in the price of mobile subscriptions and services and resulted in nearly a quarter of all Nigerians becoming mobile subscribers.

To celebrate the six year anniversary, the Nigerian Communications Commission has issued a press release covering all major aspects of the telecom market - investment, revenues, tariffs, consumer protection, universal service provision and licenses, as well as the Digital Bridges Institute and other programmes. For more information, please see here.

China's two mobile operators have released interim results for the first half of 2007. China Mobile, which accounted for over three-quarters or 301.2 million of China's  total 461 million mobile subscribers at year end 2006, noted a stunning 21.6 per cent increase in turnover over the first half of 2006. It is reporting net monthly additions in excess of five million new subscribers a month, with half of all these new subscribers coming from rural areas. By June 2007, total subscribers amounted to 332 million. Value-added services now account for 25.5%or over a quarter of all mobile revenues  in mid-2007, up from 23.5% for all of 2006. For more information, please see here.

China Unicom, based in Hong Kong, reported a more modest five per cent increase in revenues. As at 30 June 2007, China Unicom had a total of 151.632 million cellular subscribers, a net increase of 9.266 million cellular subscribers in the first half of the year. Value-added services now account for 21% of all mobile revenues, up from 19.5% for 2006. For more information, please see here.

Overall, the picture of booming growth in China's massive market for telecom services continues. India pipped China to the post for overall net gains in mobile subscribers last year, but if current growth rates continue, growth in China might outstrip India in absolute terms soon.

The UK regulator for communications, OFCOM, has today published its fourth annual report on The Communications Market 2007. The report reviews convergence in the market for communications in the UK, as well as trends in the television, radio and telecom sectors. The report is packed with useful analysis, description of trends and discussion of their implications for the future of the telecom industry.

For more information, please see here.

An excellent study, packed with data and statistics by Eria Hisali, a researcher at Makerere University, concludes that high taxes threaten to choke growth in Uganda's telecom markets. The study, recently published by the Uganda Communications Commission, finds that recent phenomenal growth in the Ugandan mobile market is slowing. Usage tax on pre-paid mobile services in Uganda is 30% (18% VAT and 12% excise duty), which the report claims is the second-highest level of service taxes on mobile use internationally. Telecoms accounted for nearly 4% of Uganda's total VAT revenues in 2000/01, and 6.5% of VAT revenues in 2005/06.

Although the latest statistics released by the Uganda Communications Commission show that the number of mobile subscribers continues to grow, the report finds that, intriguingly, minutes of use have reduced significantly in both mobile and fixed line use.  More people may be using mobiles, but they are using them less often and for shorter times.

Tax as a proportion of revenues for the telephone sub-sector rose from 5.7% in 2001 to 19.6 or nearly a fifth in 2005. The Report suggests that high taxes may result in a slowdown in growth of the telecommunication industry by reducing investment in the sector. It also suggests that uniform tax rates may mean that poorer households bear a higher burden than higher-income households. The Report concludes that, if market growth is to continue, there may be an "urgent need to rethink the current telecommunications sector tax policy".

the report follows growing interest in the impact of tax on take-up and usage of telecom services (for example, see the GSM Association's Mobile Tax Report 2006). To read the full report on Uganda, please see here.

The Pakistani financial newspaper, the Business Recorder, is reporting that the Pakistan Telecommunication Company Limited (PTCL) plans to launch an Internet Protocol Television (IPTV) service in October 2007.

Dr. Abdul Jabbar, Director-General of the Pakistan Electronic Media Regulatory Authority (PEMRA) stated that "PTCL has won the first license to launch IPTV service which would be a landmark development in the country's telecom industry". Dr Jabbar added that other companies that meet the set criteria would also be issued such licenses, adding the Authority would monitor the IPTV service on the basis of the parameters being followed regarding electronic channels. The Business Recorder reports that the PTCL project is supported by the Chinese telecom equipment giant, Huawei (which will provide servers and set-top boxes) and Irdeto, a Netherlands-based content security company (which will provide content security solutions).

For more information, please see here.

The Ministry of Information and Communication of the Government of Kenya is considering introducing a cyber law including e-transactions that could serve as a model for other East African Community (EAC) countries - such as Tanzania, Uganda, Rwanda and Burundi (which have yet to enact such kind of legislation).

The Government of Kenya is interested in creating a dynamic environment for business outsourcing and call centers to compete with India, Philippines and China. Creating an enabling legal environment is a vital first step in this direction, with some funding from USAID towards the development of such legislation. The current Kenya Communication Amendment (KCA) Bill 2007 could be adapted to include e-transactions. By including e-Transactions in the converged Bill, the Ministry will also recognise the technological convergence occurring in the digital world.

For more information, please see the article in the East African Standard.

The High Court of Appeal of Botswana has ruled that the Botswana Telecommunications Authority (BTA) should no longer receive tax revenues from mobile phone operators from the sale of scratch cards and free airtime offered by the mobile operators to their customers. Botswana's two private cellular phone operators, Orange and Mascom, have paid 3 per cent of net turnover on a quarterly basis since 2002, when private mobile cellular phone services began in Botswana. However, Orange had appealed the payment of tax on freebies or free airtime the company occasionally extends to its customers, on the basis that this was free airtime, not an amount of money. The High Court of Appeal ruled that "Free airtime given by Orange to its customers is not an amount invoiced nor does it otherwise accrue to Orange for purposes of computation of net turnover".

The BTA may be liable for refunds and stands to lose a considerable amount of future revenue. For the full story, please see Mmegi Online.

Nigeria recently held its annual Finance and Information Technology Summit (FITS) on 26 July in Lagos, as an annual forum where ICT stakeholders and professionals from the banking and financial sector can interface. The theme for this year's seminar and exhibition was "seamless ICT integration in a Post-Consolidation Era".

The Director-General of the Nigeria IT Development Agency (NITDA), Professor Cleopas Angaye, made a presentation to the Summit where he stated that the success of e-payment solutions within Nigeria depends on the provision of adequate infrastructure, reliable helpdesk services and an enlightened population. He noted that, in the absence of trust, it will be difficult to convince potential buyers and sellers to migrate from the traditional platforms to more high-tech e-payment and e-commerce. Mr. Ekeigwe, President of Information Systems Audit and Control Association (ISACA Lagos) argued that "IT governance" has not got the attention it deserves as IT needs more technical insight and has traditionally been viewed as separate from business processes.

For more information, please see here.

The Namibian Government is hosting a two-day event in Windhoek this Thursday and Friday, entitled 'ICTs for Poverty Reduction and Sustainable Development'. The conference is jointly organised by the Ministry of Information and Broadcasting, the Namibian Communications Commission (NCC) and the ICT Alliance, a body comprising key ICT industry players.

Following a convention on the new Information Communications Bill last week, the conference will allow for a full review of the ICT industry and the legislative environment for ICT in Namibia. The Namibian ICT industry has an annual turnover of about N$1 billion, but according to Namibia's ICT Alliance, only between N$400 million and N$450 million goes directly into the ICT sector, with the remainder going into the banking, retail and financial industries. However, the vice-Chairperson of the Namibian ICT Alliance suggests that "Most of the IT support to these sectors are done by South African companies, and there is little transfer to the local industry, which is currently in turmoil".

For more information, please see here.