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The East African : June 9th 2014
The EastAfrican 34 OUTLOOK JUNE 7-13,2014 e -AF R ICAN Telcos register increased savings from mast leases Fi≥ms now using the savings to finance new ma≥keting and sales campaigns By BERNARD BUSUULWA The EastAfrican T he entry of tower management companies into Uganda’s tel- ecommunications industry has seen a rise in modest investments in new transmission sites since 2012. Telecom firms have shifted their focus to consolidation as interest grows among prospective investors in this area. After acquiring 962 transmission sites from MTN Uganda in 2012, the American Tower Corporation (ATC) has increased its mast portfolio to 1,162 sites. The other firm, Eaton Towers, bought 460 masts from Warid Telecom and 300 from Orange Uganda last year and has added 10 new towers to its portfolio, bringing the total infrastructure base to 770 sites. Though the sale of transmission masts to independent firms has slashed the running costs tied to these facilities, there is an imbalance in infrastructural coverage, with most of the sites concentrated in Kampala and its environs. Due to small balance sheets, the existing firms have been compelled to seek debt funding to support their operations. Installation of transmission masts, previously done by telecommunications firms, has exerted pressure on tower operators to re-examine location dynamics, analysts say. Eaton Towers obtained a $60 million loan from the International Finance Corporation and Stanbic Uganda in November 2012 for the acquisition of transmission towers from local mobile operators and construction of 80 new masts. The anticipated entry of Helios, a prominent private equity firm, and IHS has inspired fresh consolidation fever, leading to new acquisition ventures initiated by the two players. Whereas ATC has intensified ne- gotiations for the purchase of Uganda Telecom Ltd’s tower portfolio, Eaton Towers is reportedly in talks to acquire transmission sites owned by Bharti Airtel across nine markets out of the 16 African countries it currently operates in. Details about the Eaton trans- action were not available by press time, but UTL has asked ATC for $80,000 per mast for its 450 tower portfolio, according to Stephen Kaboyo, the board chairman. The company plans to use the proceeds from the transaction to clear a portion of its accumulated debt. “We have deployed sophisticated tracking systems for fuel us- “The savings derived from the higher efficiency are being ploughed back to upgrade the masts.” Eaton Towers official A telecommunications tower. Picture: FILE age at our transmission sites and this has sharply reduced losses incurred through pilferage and leakages. Adoption of heavy duty underground cables connected to our sites has also cut down the risk of vandalism. The savings derived from the higher level of efficiency are being ploughed back to upgrade the masts, which raises their lifespan by about five years,” said a source at Eaton Towers Uganda who requested anonymity. Eaton Towers also operates in Ghana, Kenya and South Africa. Industry sources estimate the monthly running costs incurred by mobile operators for each transmission mast at $2,700, compared with an average lease fee of $1,700 per month charged by tower management firms. Wireless carriers such as Smile Uganda and Roke Telecom are charged between $1,000 and $1,500 per site every month. Intel seeking ‘conflict-f≥ee’ mine≥als f≥om DRC mines By IAN KING Special Correspondent INTEL’S CHIPS contain tantalum, gold, tin and tungsten — all made from minerals that can be mined in war-torn parts of the Democratic Republic of Congo. Carolyn Duran’s job is to make sure they are not. For the past five years, Duran and her team have confronted companies that produce the metals to find out whether they use ore from mines controlled by militias in the Central African nation. The effort is aimed at starving the gangs of revenue, and it has involved trekking to 21 countries and visiting 86 companies that turn ore into metal. Along the way, Duran says, her staff has been met with indifference, foot dragging and outright resistance — underscoring the thorny process of excluding ore that has passed through the hands of the DRC’s militias. Under the 2010 Dodd-Frank Wall Street Re- form and Consumer Protection Act, US companies must disclose their use of conflict minerals from the DRC or adjoining countries to the Securities and Exchange Commission by June 2. Those that do not comply will be required to rights issues, thereby violating their right to free speech. They also argue that the rule imposes “staggering costs” because the infrastructure to certify conflict-free suppliers does not exist. “We understand the seriousness of the hu- manitarian situation in the Democratic Republic of Congo,” the groups said in a joint statement. “But we maintain that corporate disclosure requirements are an inappropriate and ineffective way to address the ongoing turmoil in that region.” Boeing initially criticised the rule, but the aer- Gold miners in Congo. US firms have to disclose their use of conflict minerals from DRC. Picture: File publicly disclose what they have done to identify conflict minerals in their products. “Every single member of Intel’s conflict team has felt, at some point, that we’ve hit an insurmountable task,” said Duran, 43, a Portland, Oregon-based engineer. But the US Chamber of Commerce, the Busi- ness Roundtable and the National Association of Manufacturers say compliance would force companies to disclose how they contribute to human oplane manufacturer has since “been working diligently to carry out its requirements,” said Tim Neale, a spokesman. Intel, along with Hewlett-Packard and Apple, are among companies that are pushing to make their products conflict-free, providing early case studies for other companies seeking to follow suit. While Duran and others have encountered supplier resistance and gruelling conditions, they have helped about 100 smelters become certified as not using ore from the DRC, according to the Conflict-Free Sourcing Initiative, a non-profit based in Alexandria, Virginia. Washington Post-Bloomberg Africa and Mid-East tablet sales grow 77pc The Middle East and Africa recorded a 77.3 per cent growth in the tablet market, the highest across the globe, in the first three months of 2014. According to the International Data Corporation (IDC), shipments reached 4 million, driven by the strong performance of the consumer segment, which was spurred by the numerous information technology festivals and vendor-led promotions that took place throughout the region during the quarter. Tanzanian firms get digital payroll platform Sage HR Africa, a provider of business software, has offered Tanzanian employers a platform through which they can now pay their employers by automated payroll. Companies that take up the digital platform will save time and reduce chances of cash loss associated with paper work. Sage HR Africa is part of the London Stock Exchange-listed Sage, which says East Africa is a key growth market. The firm has plans to invest across the region, including establishing a regional office in Kenya. THE NUMBERS American Tower Corporation (ATC) has increased its mast portfolio to 1,162 sites. Eaton Towers, bought 460 masts from Warid Telecom and 300 from Orange Uganda last year and has added 10 new towers to its portfolio, bringing the total infrastructure base to 770 sites. Eaton obtained a $60 million loan from the International Finance Corporation (IFC) and Stanbic Uganda to fund construction of 80 new masts. BRIEFS Why Rwanda has low Internet penetration Low Internet penetration, low digital literacy and poor local content development has been blamed for Rwanda’s poor information and communications technology (ICT) industry growth. Jean-Philbert Nsengimana, Youth and ICT Minister, said that despite 63 per cent of the country’s citizens having access to mobile phones, Internet penetration is only 13.6 per cent. But a plan to build a national Long Term Evolution (LTE) network, for which Korea Telecom has secured spectrum and a licence to operate for 25 years, is expected to increase Internet penetration. Kenya judiciary ‘lacks skills to fight cybercrime’ Kenya’s criminal justice system lacks the skills to deal with cybercrime. Experts say this is also helping financial fraudsters to escape justice. Nancy Onyango, president of Systems Audit and Control Association (Isaca) Kenya chapter, said the country has become an easy target of terrorists because of the lack of laws and capacity to deal with cybercrimes, including tracking terrorism-related communication.
June 2nd 2014
June 16th 2014