London — This week Groupe Vivendi Africa upped the speeds offered to its Canalbox customers. In doing so it has increased the pricing stakes in what are often very uncompetitive francophone markets. Russell Southwood looks at what's changing about price and capacity and why.
Last week GVA announced that it was increasing its capacity for the same price to its Canalbox customers in its Francophone markets: Burkina Faso, Congo-Brazzaville, DRC, Gabon, Ivory Coast, Rwanda and Togo.
Its announcement heralded the capacity increase as a market disruptor: "GVA is pursuing its mission to democratize access to Very High Speed Internet and is once again disrupting the market by boosting the speed of its offers without increasing their price."
Managing Director of the Vivendi Africa Gabon (GVA Gabon) Group, Marc Civelli told a local press conference: "We wanted to meet all the challenges of digital development for our customers, particularly in terms of the development of uses, in terms of growth, the needs of our subscribers and also in terms of accelerating the digital economy in Gabon."
It offers two packages: Start and Premium. For Start it has increased its speeds from 10 to 50 mbps and for Premium from 50 to 200 mbps. Taking the Gabon example, the Start package costs FCFA (BEAC) 25,000 (US$40.75) and the Premium package FCFA 45,000 (US$73.35).
In June last year, former Government-owned incumbent Gabon Telecom started to offer Fibre-To-The-Home. Now part of Etisalat-owned Maroc Telecom, its prices were not highly competitive with GVA's old prices but it clearly wanted to make sure it remained the market leader. Over six years, GVA says that it has connected 140,000 households to its two Fibre-To-The-Home packages.
So how do GVA's new prices compare to those found in one of the continent's more competitive Fibre-To-The-Home markets, Kenya. Safaricom's Diamond service only offers 100 mbps for KS12,499 (US$104.66) and its Gold service offers 40 mbps for KS6,299 (US$53.60). Since neither is quite comparable to the GVA packages, I have done a price per mbps comparison below:
Gabon
Start US 80.15 cents
Premium US$36.66 cents
Kenya
Gold US$1.34
Diamond US$1.04
So it seems that a generally high-price Francophone market has made a market-changing price decision before the supposedly more innovative Kenya.
Three final points that are worth making about FTTH roll-out on the continent:
With certain exceptions, MNOs have found it hard to make the shift from offering mass-market, lower price voice and data services to high-price, consumer fibre services. They already sell high-end connections to demanding enterprise customers but the actual customer numbers are relatively low. FTTH combines larger numbers with a more demanding type of consumer, a difficult 'sweet spot' for African MNOs.
It's probably a miscalculation to ignore it for again as the prices slide down, the numbers will accelerate. The new international fibre cables - A2Africa, Equiano and Peace - will continue to drive down the international wholesale element and national wholesale prices have been on a long-term slide that will almost certainly continue.
The contrast between the pricing packages of GVA and their telecoms equivalent is stark. GVA has a starter package and a premium package. Gabon Telecom and Safaricom have many different packages. It's a real case of make me an offer I can't understand. If you want to sell Fibre-To-The-Home, keep the packages simple, keep upping the capacity and in so doing, bring down the prices.
In Brief
BT and MTN Business have announced a strategic alliance which will offer world class security and communications services to business customers across Africa. New and existing MTN Business customers will get access to a raft of solutions, including cloud-based security and consultancy, managed connectivity, and voice services which will be delivered seamlessly as part of MTN's Enterprise portfolio, meeting local regulatory and compliance requirements.
Kenya: In partnership with Cellulant, Grey has expanded its services into East Africa, kicking off with Kenya to address the difficulties of sending & receiving money abroad. Grey, a Y-combinator backed fintech startup, offers a unique international money transfer service that enables its users to send and receive international payments without restrictions quickly. Cellulant is the company's payments processor powering its payouts to thousands of Grey's customers. The service allows users to create a virtual foreign USD, GBP, and EUR bank account for free. Users can receive payments and convert directly to Kenya Shillings or the Nigerian Naira.
Rwanda: US-based equipment provider Vanu has launched a new partner programme in Rwanda to deploy mobile base stations in remote areas away from the electricity grid. Working with local firms HUI and Annos, Vanu says it will deploy hundreds of solar-powered base stations for the country's largest mobile network operator (MNO), MTN Rwanda.
Mastercard and fintech giant OPay today announced a strategic partnership, which marks a significant boost for wider financial inclusion and economic prosperity by opening up digital commerce to millions of people across Middle East and Africa. The collaboration enables OPay consumers and merchants in the region - including Algeria, Morocco, Egypt, Nigeria, Ethiopia, Kenya and South Africa to engage with brands and businesses anywhere.
Uganda: Mobile operator Airtel Uganda has requested an extension to the deadline to complete the share listing which is required under its licence terms. All foreign owned holders of National Telecoms Operator (NTO) concessions must list 20% of their shares on the local bourse and Airtel was given a deadline of 15 December 2022 to complete the process. A report from ITWeb says the cellco has now asked for a one-year extension, without giving a reason for the request.
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In publishing its preliminary results for the year ending 31 March 2022, South Africa-based multinational mobile operator Vodacom Group noted that revenues rose 4.5% to ZAR102.7 billion (USD6.3 billion) from ZAR98.3 billion in FY21, as service revenue edged up 3.0% year-on-year to ZAR79.9 billion, supported by a resilient performance in South Africa. Group service revenue growth was underpinned by new services which include digital and financial, fixed and IoT, it said.
South Africa-based regional carrier MTN Group said its consolidated service revenue came in 'ahead of medium-term targets', improving by 15.9% year-on-year to ZAR45.755 billion (USD2.8 billion), while Group EBITDA increased by 21.1%, with the EBITDA margin expanding by 2.2pp to 46.4%. In a brief quarterly trading update the company noted that its first-quarter performance 'was supported by service revenue growth at our large operations, which was delivered in line with medium-term targets, and the disciplined execution of our expense efficiency programme'. In terms of other key financial highlights, it noted that Group data revenue surged 37.3% and fintech revenue climbed 21.2%, while legacy voice revenue was only up by 2.6%.
Angola Cables has signed a partnership deal with data centre owner and developer Flexentia, giving it access to 40 data centres in the USA.
Kenya: Liquid Intelligent Technologies, a business of Cassava Technologies, has partnered with PEACE Cable Company to introduce 800Gbps of additional subsea capacity in Mombasa on the highly-anticipated global submarine cable.
