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Africa Tech Trends: Unexpected players entering the telecoms space

Africa Tech Trends is a new fortnightly column by Tom Jackson focusing on the most important developments in Africa’s technology industry and examining how technology is disrupting the way business is being done on the continent.

Microsoft is piloting its White Spaces project in Namibia.

Microsoft is piloting its White Spaces project in Namibia.

Unexpected players entering the telecoms space

South African fashion chain Mr Price recently launched a mobile virtual network operator (MVNO), becoming the first retailer in the country to do so. Essentially a MVNO offers mobile communication services without owning its own network infrastructure. MVNOs typically use the network infrastructure of an existing mobile operator to provide services to consumers under their own brands. Mr Price’s offering will piggyback on Cell C’s network.

MVNOs have yet to take off in Africa as they have done elsewhere in the world, but there is a slow movement towards adoption.

In Kenya, MVNO licences have been issued to three firms, one a subsidiary of Equity Bank, the country’s largest financial services provider. The bank plans to use its network to offer mobile banking solutions to customers.

Mobile money keeps growing

The drive towards making mobile money even more accessible is continuing. Interoperability has been an ongoing theme for much of the year, with calls for allowing individuals and businesses to move money to any mobile money account, regardless of what company that account is held with. Tanzania took the lead on this recently, with mobile money service providers Airtel, Tigo and Zantel partnering for a cross-network transfer service.

In Nigeria, where the uptake of mobile money has been relatively low compared to countries such as Kenya, mobile banking and payments firm eTranzact has invested US$350,000 in the PocketMoni 500 project in Kano and Ogun states, which aims to drive mobile money adoption through the education of both merchants and customers on the benefits of such services.

Mobile money is also making inroads in Sudan, where the Bank of Khartoum and telecoms company Zain has just launched the country’s first mobile money service – Hassa. Customers can make transactions using their phones, Bank of Khartoum ATMs or at Hassa shops. Only 15% of the Sudanese population has access to formal financial services.

Seeing potential in e-commerce

African companies are also betting on mobile to boost the continent’s e-commerce market. Sifiso Dabengwa, CEO of mobile network operator MTN, expects the rise in smartphone adoption to spur online shopping.

MTN last year acquired a 33.3% stake in Africa Internet Holding (AIH) – which owns fast-growing e-commerce platform Jumia – to develop online ventures and benefit from the anticipated consumer boom.

Jumia continued its quick expansion across the continent by launching in Cameroon late last month. Since launching in Nigeria in 2012, Jumia has also rolled out in Ghana, Kenya, Côte d’Ivoire, Morocco, Egypt, Uganda and the United Kingdom (UK).

Boosting connectivity

African connectivity, particularly in rural areas, has been high on the agenda in the last year, with international initiatives such as the Facebook-led Internet.org and the Alliance for Affordable Internet (A4AI) claiming most of the attention. However, more locally, there are other initiatives underway.

iWayAfrica has just launched its fibre connectivity service in Uganda which it said is aimed at meeting the increasing connectivity demands of small businesses. The service has initially been rolled out in Kampala and Entebbe, and connects with another high profile international connectivity project – Google’s Project Link. iWayAfrica managing director Ken Mwai said the service provides access to businesses at a fixed cost, with Google managing the last mile link and ensuring redundancy on its network.

Uganda, which like many other landlocked African countries suffers for inadequate connectivity due to the fact that undersea cables dock at countries with ocean access, has also been the recipient of two points of presence (PoP) facilities from African network service provider SEACOM. Through these connections, Uganda will have more direct and resilient access to international communications interconnection points and the global internet. It is expected that the deployment of the two PoPs will improve internet access for Ugandans by 50%.

Another such connectivity project has been launched in northern Namibia, which is now home to the world’s biggest television white spaces broadband pilot project. Microsoft, through its 4Afrika initiative, has partnered with the MyDigitalBridge Foundation and Adaptrum to test the project, which seeks to utilise unused portions of spectrum in frequency bands to provide wireless broadband services across wide areas at a cheaper price. Microsoft and other partners have rolled out similar projects in countries such as Kenya, Tanzania, Ghana and South Africa.

Tom Jackson is a reporter on technology and business themes across the African continent. He is primarily based out of Nairobi and Cape Town.

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