One Area Network Across East African Community

At a regional telecom meeting held in Kigali, Rwanda, various Ministers from four East African Community (EAC) countries—Rwanda, Kenya, Uganda and South Sudan—signed an agreement that will require operators in these countries to adopt and implement the framework for a One Area Network in the region by 31 December 2014. The launch of the One Area Network will abolish roaming charges among the four countries, and subscribers traveling there will be charged as local users on the visited country’s network. Additionally, calls that originate in any of the member countries will no longer be charged at international rates but at lower local rates. According to reports, Tanzania and Burundi did not participate in the meetings.

Before August 2012, when a US $0.22 per minute tax on all incoming calls was introduced by the Rwanda Utilities Regulatory Authority and a subsequent surge of similar taxes on international calls took place across the region, operators such as Safaricom in Kenya and MTN in Uganda and Rwanda had entered into mutual agreements that allowed their subscribers to make calls at no extra cost when traveling within the EAC. Vodacom Tanzania also had a comparable deal during that time. It mimicked the borderless network innovation that was spearheaded by Airtel’s predecessors Celtel and Zain in December 2006 across its operations in Uganda, Kenya and Tanzania. However, once taxes were levied, the cost of calling across East Africa greatly increased, with operators raising their prices to pay for operating costs and realize profits.

With One Area Network, the current trend in the EAC is to reduce the high costs of making calls across borders, which according to subscribers is higher in some cases than the cost of calls to China, the U.S. or the U.K. While we have written several times about the abolition of roaming charges in the EU, it is likely that we will begin to see roaming charges reduced or eliminated in other regions such as the EAC and Russia and its Eastern European and Central Asian neighbors. We believe that this will have a positive impact not only on subscribers but on operators, as well, since the elimination of roaming rates will most likely result in increased phone use by customers while traveling.

  In the EAC, the regional economy is also likely to benefit, because lower calling rates will result in lower operating costs for businesses, and the end of roaming should help the mobile money industry, in particular. Mobile money is very much a way of life in the EAC, and it is a steady revenue stream for operators. One Area Network is just one of the initiatives to reduce roaming and international call charges that have emerged in the Middle East and Africa since 2013. Airtel and MTN both offer “roam like home” prices to their subscribers who are traveling in countries in which they operate, and we expect to see this trend expand even further.

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

Tarifica Score Launched With Ratings of Australian Postpaid Plans

Tarifica the U.S.-based telecom research and analysis firm, announced ratings for all the major Australian mobile operators’ postpaid plans, created with its recently launched comparison tool, the Tarifica Score. The highest scores were achieved by Optus and Vodafone, which ranked significantly ahead of competitors Telstra and Virgin Mobile. The top score among plans that included a phone went to Vodafone’s $100 Red Plan with Double Data Promotion, while in the without-phone category the highest score was achieved by Optus’ $60 My Plan Plus. These scores provide objective, quantitative comparisons of mobile plans, based on a consumer-value-oriented approach, and are generated by a proprietary mathematical model. Among the factors taken into account are plan allowances (voice minutes, SMS, MMS and data), network speeds and value-added elements such as data sharing, international calling allowances and roaming benefits.   

Optus’ plans received high scores because they combined large data allowances with relatively moderate prices. Vodafone’s high scores were driven by the combination of its “Double Data” promotion and its network’s fast 4G download speeds, which dwarfed that of the competition. Although it is the largest mobile operator in the market, Telstra’s plans were simply too expensive to compete with the value offered by Optus and Vodafone. The algorithm used to calculate Tarifica Scores awarded a high number of points to Telstra’s plans because of the operator’s wide geographic coverage, but even with this bonus, its plans did not include anywhere near the allowance volumes available in similarly priced plans from Optus and Vodafone. 

The Tarifica Score, which assigns a single number to each plan analyzed, is notable for making possible “apples-to-apples” comparisons between offerings that may on the surface appear to be quite different from each other. By doing so, it allows consumers to determine which plans offer the best value for the money. For mobile operators, the Tarifica Score offers several advantages: First, it allows in-house evaluation of plans’ market potential against an objective, algorithm-based third-party analysis provided by a firm with years of institutional knowledge and experience as well as relationships with major industry participants around the world. Second, Tarifica will work with operators to analyze plans prior to their launch so as to ensure the highest possible score. Third, the score is an excellent marketing tool by which operators can communicate to consumers, in simple, quantitative terms, the actual value of their offerings. Fourth, it can be supplied to regulators as a way of addressing concerns about the value and fairness of plans. Finally, for a deeper understanding of a plan’s place in the larger telecom world, Tarifica offers a modification that will allow a plan to be compared across markets. In addition, both operators and consumers can benefit from having the Tarifica Score segmented according to various metrics such as cost, device inclusion or regional availability.

Tarifica Scores can be calculated for any of the 85 countries Tarifica tracks.

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   Photo by Abd allah Foteih on Flickr

Report: Kyrgyzstan Allows Operators to Provide Fixed and Mobile Services

Kyrgyzstan's Ministry of Transport has reportedly presented the country’s parliament with a draft law enabling telecommunications operators to provide fixed and mobile connection services simultaneously. Providing both services is currently prohibited by the Law on Communications in Kyrgyzstan.

The ministry claims that the current law limits the scope for operators to expand their businesses and impedes convergence. Fixed-mobile convergence is a major trend in the worldwide telecommunications economy. With ever-increasing demand for fast broadband and greater reliance on mobile networks, operators have much to gain by being able to have a foot in each world, and indeed the dividing line between fixed and mobile is becoming more and more blurred. Kyrgyzstan’s regulators are wise to recognize this fact and allow operators to embrace it. 

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

Swedes Complaining of 4G Interference With TV

A report from the Swedish postal and telecom regulator PTS has stated that TV viewers have complained about interference from the country’s mobile networks running on the 800 MHz band, though it says that installing filters should resolve most such problems. In 2012 there were 150 complaints of interference from residents in areas of 4G network expansion; in 2013 there were 400. On average, mobile operators provided 60 filters per month during the second half of 2013. PTS said that in cases where it carried out measurements, no incidence constituted interference under the terms set out in operators’ permit conditions. While we cannot comment on the terms of the permit conditions of various Swedish MNOs, we do believe that customer complaints of interference of digital terrestrial television (DTT) by 4G signals, and it makes perfect sense that such complaints would increase significantly as 4G service expands. While the filters, which fit onto the aerial antennas of the TVs in question, may well solve the problem, and the mobile operators may be very able and willing to bear the cost of such gadgets if required by law to do so, the interesting point here is that in a world with a limited number of usable electromagnetic frequencies, 4G technology is likely to come into conflict with older technologies. To give another example, in Peru, 4G on the 900 MHz band was interfering with cordless phones to the extent that the country’s Ministry of Transport and Telecommunications was planning to replace the phones to clear that band.  In an increasingly 4G-connected world, with ever-increasing demand for the frequencies that best deliver the high-speed mobile connectivity, functionalities that used to be provided by such technologies as DTT and cordless phones will be provided by 4G via various mobile devices, ultimately obviating these clashes of frequency.  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

Swisscom Integrates iO App with Vivo Packages

Swiss telecommunications provider Swisscom launched two new offerings for fixed line customers on 19 May 2014. These customers can receive calls anywhere in the world on their tablets via their existing fixed line number, at no extra charge. This is enabled by the new iO@home feature in the operator’s iO communications app. Furthermore, customers subscribing to a Vivo package can make unlimited calls to any Swiss network using their fixed line number and an internet connection whether they are calling from within Switzerland or abroad. These new services are currently available for iPad users only. Customers subscribing to a Vivo M, L or XL package can also choose a TV offering with fewer channels and without the time-delayed viewing feature for a CHF 15.00 (US $16.75) reduction in the monthly tariff.

The EU directive that will eliminate roaming charges from 15 December 2015 does not apply to Switzerland, as it is a non-EU state. However, a sizable segment of its population frequently travels or lives abroad, making both international calling and roaming key features for this market. Swisscom launched its free iO app in June 2013 as its answer to the competition from OTT services which would affect both the international calling and roaming segments. A key feature used to promote this app is that all data is encrypted and stored on secure Swiss servers. As of February 2014, more than 600,000 users had signed up for the app, including a significant number of customers from rival Swiss networks. Since its launch, Swisscom has used the app as another medium by which to extend the benefits of its packages to its subscribers. For example, subscribers to the Natel Infinity XL mobile plan, which offers unlimited calls to numbers in Switzerland, the EU, the U.S. and Canada, can also use the app to make similar calls free of charge, whereas for other customers, the international calling feature using the app is a flat-rate add-on.

Now Swisscom is integrating this app with its Vivo packages, which bundle fixed telephony with Swisscom TV 2.0 and high-speed broadband at monthly fees ranging from CHF 69.00 (US $77.05) to CHF 169.00 (US $188.71). By combining any Vivo package (except Vivo Casa) with any Natel Infinity mobile subscription, users can get a discount ranging from CHF 5.00 (US $5.58) to CHF 25.00 (US $27.92).  Thus through bundling of services and the app offering, Swisscom is not only addressing the competition from OTT services but it is also protecting its fixed line revenues. Furthermore, the promotion of the app for roaming calls in conjunction with competitive data travel packs for its Natel subscribers may increase data revenues, as well.

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

Etisalat to Sell West African Assets to Maroc Telecom

UAE-based MNO Etisalat has reported that it will sell its operations in West Africa to Moroccan MNO Maroc Telecom for a sum of US $650 million. The deal will include the sale of Atlantique Telecom, a wholly owned subsidiary of Etisalat with operations under the Moov brand in Benin, Central African Republic, Ivory Coast, Ghana, Niger and Togo. It also includes Ivory Coast-based Prestige Telecom, which provides IT services to Etisalat’s operations in all of these countries. The operator’s subsidiary in Nigeria will not be part of the transaction, which requires competition and regulatory approvals in the six West African countries. The deal has been contingent on Etisalat’s planned acquisition of Vivendi’s 53 percent stake in Maroc Telecom for €4.2 billion (US $5.7 billion), which was completed on 14 May 2014.

Vivendi, which is the parent company of French MNO SFR, has been in exclusive talks with Etisalat since July 2013 about the sale of its stake in Maroc Telecom after other bidders, including Qatar’s Ooredoo, dropped out. This sale is part of a larger move by Vivendi to focus on its more profitable media assets and has been viewed as a means to raise enough cash to write down its debts and sell SFR.

The deal has several positives for Etisalat. While the operator has a presence in 15 markets across the Middle East, Asia and Africa, its main source of revenue (at 66 percent of group revenues in Q1 2014) continues to be its home market. The UAE is a highly saturated market, which ranks highest in the world in terms of smartphone penetration (over 72 percent as of 2013). Competition is intensifying in the wake of the regulator’s elimination of the tariff approval requirement and introduction of mobile number portability in 2013. Saudi Arabia, the other Middle Eastern market in which Etisalat operates, has nearly as high a rate of mobile penetration and also will see the entry of three MVNOs. Therefore, diversification away from the Middle East makes sense.

However, some of Etisalat’s biggest international markets in terms of revenue generation, Egypt and Pakistan, have been affected by issues such as political instability and currency devaluation. Through the acquisition of Maroc Telecom, Etisalat not only gets an entry into Morocco with the leading market share of 47 percent (totaling 18.3 million subscribers), it also adds four other African countries (Burkina Faso, Gabon, Mali and Mauritania) to its portfolio and can leverage synergies that exist between operations in that region. Furthermore, placing its West African operations under the management of a successful regional operator may prove beneficial to Etisalat. 

However, it is worth noting that Maroc Telecom’s profitability in its home market has been hit by soft consumer spending and increasing competition. Bringing innovative offers to the market by leveraging the strengths of the two operators will be key to Etisalat’s future success with this acquisition.

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

Easily Access Mobile Telecom Prices from Around the World

Tarifica's new interactive analysis tool empowers users with the ability to easily sort telecom pricing data from around the World.

This preview shows exactly how the Pricing Database analysis tool works.

http://www.tarifica.com/MobilePricingDatabase.aspx