Jongla Pitches Its Instant Message Service to Africa

Finland-based OTT messaging service provider Jongla is targeting the African market with a campaign stressing that people there can save money and reduce their data requirements by switching from WhatsApp and other OTT apps. Jongla has been specifically developed for people living and working in Africa and other emerging markets in which data costs are high and coverage is unreliable. Jongla says it is the most data-light instant-messaging app in the world, taking only 3.4 MB to download on Android phones compared to WhatsApp (23.7 MB), Facebook’s Messenger (30.2 MB); most other messaging apps take up at least 20 MB. Furthermore, once downloaded, Jongla uses just 10 percent of a handset’s memory, meaning that users do not have to uninstall any apps to make space for Jongla. The app’s unique data compression techniques ensure that it does not consume as much mobile data as other messaging apps for essential background processes. Jongla is platform-independent and works over low-speed Wi-Fi networks as well as 4G, 3G, EDGE and GPRS.  Here is yet another OTT challenge thrown down before the world’s mobile operators. This time, an enterprising developer has found ways to make its app especially easy and cost-effective to use, particularly in markets where the majority of smartphone customers have budget devices and where cellular coverage is not the best. Mobile operators in emerging economies, where cost is a paramount concern, already have a hard time competing with OTT providers when it comes to messaging. With apps like Jongla coming on the market, they will likely have to work even harder to come up with distinctive and appealing offers—for device deals as well as services—in order to keep subscribers messaging over their cellular networks.

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Samsung’s Q2 Profits Below Expectations

Korean device manufacturer Samsung stated that according to its preliminary figures, second-quarter revenues were KRW 52 trillion , down from 54 trillion  in the same quarter last year, and that operating profits fell 23 percent year-over-year, to KRW 7.2 trillion. Analysts had expected profits of KRW 8 trillion. In a statement, Samsung attributed the shortfall to increased competition in China and Europe and to soft smartphone and tablet sales. Samsung’s statement sought to contextualize the disappointing results and sound a somewhat optimistic note for the near future: “The second quarter is a seasonally weak period for smartphone demand in China. Samsung also saw an increase in inventory due to price competition and a weaker demand for 3G products ahead of the expected growth of 4G LTE products in the Chinese market.… The company cautiously expects a more positive outlook in the third quarter with the coming release of its new smartphone lineup.” Nonetheless, the preliminary Q2 figures for the manufacturing giant tell a larger story. One cause of Samsung’s difficulty is the rise of the big-screen (5- or 6-inch) smartphone, sometimes known as the “phablet,” which has been championed by none other than Samsung. Such devices have been cannibalizing tablet sales. In addition, with the maturation of smartphone technology, users are finding that their devices have sufficient functionality and durability that they do not have to upgrade them as often as before. And finally, Samsung and other high-end device manufacturers, such as Apple, are finding their domain encroached upon by cheaper and simpler handsets that, with the advance of technology, can now perform enough key smartphone functions to deter many consumers from spending the extra money on a state-of-the-art phone. The Samsung Q2 figures are by no means the last word on the Korean giant’s business, but they are part of an evolving narrative about the maturation of the worldwide device market.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

Airtel to Extend Movirtu Service Across all African Operations

Global telecommunications group Bharti Airtel has signed an agreement with London-based Movirtu, a provider of virtual SIM solutions, in which Airtel will offer the Movirtu Share service through its 17 subsidiaries across Africa. The operator launched this service as a test in Madagascar in 2011. The first commercial deployment under the new agreement has already taken place in the Democratic Republic of Congo (DRC), and two more deployments are underway.  Movirtu’s patented virtual SIM platform allows mobile operators to provide services to users who rely on borrowed handsets because they cannot afford to purchase them. It also allows users to maintain multiple numbers on the same handset.

Access to mobile services can serve as a harbinger of economic progress for the many millions living in emerging markets where mobile phones are more than just a means of communication. While mobile operators have achieved considerable penetration in Africa, there still remains a vast and untapped market consisting of those who are too poor to own a handset or maintain services, despite the growing availability of lower-cost options. The World Bank estimates that there were 2.4 billion people in the world living on less than US $2.00 per day as of 2010. The 1 billion who live on US $1.00 to US $2.00 per day represent the market being targeted by Movirtu and Airtel. While providing mobile services to this latent market could have significant socioeconomic implications, for the operator it represents a sizable revenue opportunity. With virtual SIMs, it may be able to lock in customers at a nascent stage and later sell them more services as they progress economically and in terms of mobile usage. Also, since the cost of providing a virtual SIM is around US $0.20 as against US $14.00 to US $21.00 for a traditional SIM, the margins can be attractive. In Madagascar, Airtel launched this service under the name ‘Antso Majika’ through its Village Phone Project in conjunction with the International Finance Corporation. According to Airtel, the entire project (which included various services in addition to virtual SIMs) yielded an ARPU of US $12.00 versus the handset ARPU of US $3.00, due to the fact that the operator was able to tap into a previously unexploited market.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

U.K. Prime Minister Unhappy With Mobile Coverage

U.K. Prime Minister David Cameron has recently instructed his cabinet ministers to find ways to improve mobile coverage in the country’s rural areas. This directive follows a meeting that was held between the chief executives of the U.K.’s mobile operators and the country’s former culture secretary, Maria Miller, in Q1 2014 to start planning for an increase in rural mobile coverage. The new culture secretary, Sajid Javid, will take on the project and meet with MNO executives for a progress update. The operators were asked to explore, in particular, the costs of adding coverage to the A and B roads in the villages of Shropshire, Dorset and Norfolk. As part of these discussions, the U.K. government has asked that the prospect of national roaming be considered—an idea that the operators are resisting. They argue that revenues lost through national roaming could prevent them from investing in their own networks and infrastructure and that a better way to help increase coverage would be to decrease the amount of bureaucracy and cost involved in erecting masts (towers) in rural areas.

Over the last few years, the U. K. government has launched several initiatives to help bring increased mobile and broadband coverage to areas of the country where there is minimal coverage or none at all—known as “notspots.” Among these initiatives are the mobile infrastructure project (MIP) and Broadband Delivery UK (BDUK). However, both of these programs have received criticism. For example, BDUK has been accused of mismanaging funds, operating in an inefficient manner and favoring BT over the country’s other operators. This new order from the Prime Minister is separate from the previous endeavors, and although the country’s four largest MNOS are all increasing their investments in 4G services, the operators fear that the reasons behind the regulation have a number of different bases—the areas in which the government has asked for increased coverage are core Conservative Party voting territories.

 

“Although the U.K. communications regulator Ofcom must act within the powers and duties set for it by Parliament, and its principal duty is to further the interests of citizens and consumers—which include increased coverage in underserved areas—regulators also need to try to work with operators. Any undue pressure—possibly politically driven in this case—on the regulator to implement changes under the guise of increasing service in the telecom industry may be met with resistance by the operators.”

Kamely Hayes,

Managing Editor,

The Tarifica Alert

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Free International Roaming in Asia

Malaysian mobile operator U Mobile has launched free international roaming services for postpaid consumers traveling across Asia. Travelers to Cambodia, Hong Kong, Indonesia, the Philippines, Singapore, Thailand and Taiwan will receive a 50 MB international roaming data allowance free of charge. Usage beyond this limit will be charged at pay-as-you-go rates, with a maximum of MYR 30.00 (US $9.33) per day. Travelers will have to manually select the partnering mobile networks, which are CamGSM (Cambodia), PCCW (Hong Kong), Telkomsel (Indonesia), Globe (Philippines), StarHub (Singapore), Taiwan Mobile (Taiwan) and True (Thailand). This promotional offer is valid until 30 November 2014.

As free international roaming offers go, this one is limited in scope. It  provides an allowance of 50 MB per day of roaming data in select countries, on select partner networks only. In addition, at a pay-as-you-go rate of MYR 7.50 (US $2.33) per megabyte (which applies to all of the countries where roaming services are provided, except Vietnam), the roaming cap means an excess data allowance of 4 MB per day, which is very small.

However, this offer must be examined in light of other factors. It is the first free international roaming data offer to be launched in Malaysia. Market leader Maxis offers a data roaming plan for 100 countries with a cap of MYR 38.00 (US $11.82) per day. This offer is meant to promote U Mobile’s Unlimited 50 and Unlimited 80 plans, which were launched in January 2014, a month after U Mobile became the second operator to launch 4G services in Malaysia. These plans, priced at MYR 50.00 (US $15.55) and MYR 80.00 (US $24.88), respectively, provide unlimited on-net calls, unlimited data with a throttling threshold of 2 GB and 3 GB, respectively and allow sharing of minutes and data between up to three SIMs with a charge of MYR 10.00 (US $3.11) for each additional SIM. While 4G services are currently limited to small portions of the country, U Mobile’s 3G radio access network sharing agreement with Maxis is enabling it to provide 3G speeds across the country. This latest promotion, though limited in nature, adds some value to a competitive offer and indicates an aggressive strategy on the part of U Mobile, which aims to increase its market share from its current level of 10 percent to between 15 and 20 percent in the next five years.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Econet Wireless Diversifies Into Road Construction

Econet Wireless Zimbabwe, a mobile and fixed telephony services provider, said it is diversifying into road construction in a bid to improve communication channels and to support the community. CEO Douglas Mboweni said that many communities are hard to reach because of poor roads and that diversification into road construction would increase the size of the company’s footprint, help the development of social infrastructure and support the country’s economic plan, the Zimbabwe Agenda for Sustainable Social Transformation (ZimAsset). Mboweni added that the group has already begun the process of upgrading roads and that it will intensify its efforts, particularly in rural areas.   As we have been reporting, many operators around the world are diversifying, mainly due to diminishing ARPU from traditional telephony services in an era of saturation. However, in sub-Saharan Africa, telephony is still on the rise, and providers are in a position of advantage. In fact, mobile services in particular are taking on some of the roles that in other markets are played by other kinds of entities, such as banks. In the case of Econet in Zimbabwe, diversification appears to be a strategy aimed at promoting fixed and mobile services themselves. Strengthening physical infrastructure, the operator believes, will help strengthen telecommunications infrastructure—presumably by making it easier for cable to be laid and cell towers constructed in relatively remote areas, and we think this belief is most likely well-founded.  In addition, by extending its presence throughout the country by way of construction projects, Econet can gain the good will of the rural populace and raise its profile generally, which could result in an increase in its customer base. It should be noted that diversification is nothing new to Econet, which in 2012 and late 2013 acquired a controlling share of Steward Bank, a Zimbabwean retail bank, which is now a subsidiary of the operator and handles Econet’s m-payment system, Ecocash.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

Airtel Equips Youth with Knowledge in Mobile Phone Repairs.

Airtel Nigeria has introduced an empowerment initiative directed at equipping young people with practical knowledge in mobile phone repairs. The Basic Mobile Phone Repair Module (BMPRM) is a two-week certificate course that supplies participants with the fundamentals at no cost. The BMPRM will be conducted by experts to enable participants to start small businesses of their own. Once the training is complete, the participants will be set up in positions such as APRP (Adaptive Pattern Recognition Processing) operators, workers at SIM selling outlets.

Airtel Nigeria holds the second-largest market share, 21 percent, behind MTN, with 45 percent, and leading Globacom by just 1 percent. Currently, no operators offer phone repair services. However, in December 2013 Globacom introduced a limited-time opportunity for customers of any operator to bring their mobile phones to a Globacom shop and have their phones repaired free of charge. Even though this mobile repair service was effective only for a short period, Globacom got the attention of Nigerian consumers.

Airtel Chief Executive Officer and Managing Director Segun Ogunsanya said, “This training is part of our plans to start building a crop of SME [Small and Medium Enterprises] businesses that will spin off our core business and also bring Airtel closer to our customers.” That could mean that Airtel hopes to partner with phone repair shops that graduates of the course may establish in the future. Such partnerships could help the operator gain competitive advantage through better customer service. Still, this approach is not likely to come to fruition quickly, since Airtel began with only 40 participants and is now preparing for another 100. Furthermore, it is not clear whether the BMPRM instruction covers smartphones or only feature phones.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx