Ericsson, the Telecoms Giant, to Expand Africa Network Services Amid Growth

 

 

Ericsson AB, the worldbs largest maker of wireless-network equipment, plans to expand its network-management services inB AfricaB as more phone companies outsource the technical side of their business.

Ericsson, which has contracts to manage Africa network services for New Delhi-based Bharti Airtel and Atlantique Telecom, is in talks with more operators on the continent, Kamar Abass, managing director of Ericsson Nigeria Ltd. and head of regional accounts for sub-Saharan Africa, said in an interview on Aug. 27 in Lagos, the commercial capital. Atlantic Telecom is a unit of Abu Dhabi-basedB Emirates Telecommunications Corp. (ETISALAT), known as Etisalat.
bHaving the two contracts today gives us a solid baseline,b he said. bWe are discussing very seriously with three or four customers.b
Services managed by Stockholm-based Ericsson include building telecommunications networks, running them and upgrading when necessary to increase network speed and capacity for new consumer services, an industry that will probably grow globally to $25 billion by 2017 from $14 billion last year, according to New York-basedB ABI Research. Itbs relatively new in Africa where most operators manage their own networks.
In June, the company opened two regional service centers in theB Democratic RepublicB of Congo and Nigeria as it tries to convince operators in the continent that itbs more efficient to have their networks managed, according to Abass.

GROWTH ROOM

Ericsson, which makes 40 percent of its global revenue from such services, announced in May that it had reached one billion connections out of an estimated 6.5 billion connections worldwide, meaning that almost one in six mobile lines are managed by the company.
Its 2011 contract with Airtel gives it responsibility for managing part of a network with 55.8 million subscribers in Africa. For Atlantique Telecom it runs a network of about 10 million subscribers. With about 65 million connections under the companybs management on a continent with more than 454 million connections in 2012, Africa offers room for growth, with the GSM Association estimating that there will be 700 mobile phone connections in the continent by 2016.

SERVICE CENTERS

Ericssonbs competitors in the managed-services market include Zoetermeer, Netherlands-based Nokia Siemens Networks, Paris-based Alcatel-Lucent SA, and Shenzhen, China-based Huawei Technologies Co. Its new service center in Congo caters to French-speaking clients and another inB NigeriaB serves English-speaking customers in Africa, with Ericsson workers trained on various technologies used by the operators, according to Abass.
Nigeria has the biggest mobile-phone market in Africa at 117.4 million subscribers as of June 2013, according to the Nigerian Communications Commission, from a population of more than 160 million. With many subscribers acquiring more than one line, the numbers will grow to more than 200 million subscriptions in 2017, London-based research company Informa Telecoms & Media predicts.
There are concerns the business model might lead to loss of jobs in the West African nationbs telecommunications industry, which employs 15,000 people directly and as much as 70,000 others indirectly, according to Gbenga Adebayo, chairman of the Association of Telecommunications Operators of Nigeria. There should be clear guidelines on bwhat the protection will be forb employees.

WORSENING INSECURITY

Two of the four biggest phone companies in Nigeria use networks managed on contract, with the others running most of theirs. All are investing a combined $5 billion to expand their network capacity for data with Nigerian smartphone users expected to increase to more than 35 million by 2017 from 5.6 million at the end of last year, according to Informa.
Major challenges include frequent power cuts and worsening insecurity since telecommunications facilities became targets of Islamist militants engaged in a violent campaign in the mainly Muslim north and Abuja since 2009 for Shariah rule.
bThat ability to keep a network site up-and-running is a basic capability, itbs a kind of entry to the clubb of serious competitors, said Abass.

 

 

 

Real Estate Developers See Opportunity In African Market

 

Actis
Global commercial real estate developers are currently dashing to construct shopping centres in Africa, one of the fastest-rising consumer markets in the world.
According to Reuters, when Wal-Mart Stores, the worldbs biggest general retailer, acquired a major stake in South Africabs food and grocery firm, Massmart, US shopping centre builder, Irwin Barkan, celebrated.
Barkan, who has been a mall developer for over three decades, believes the home market (US) is not producing sound business anymore.
But underdeveloped African cities proffered great revenues because of the ever increasing middle class.
bWhen Wal-Mart announced it was buying 51 percent of Massmart, I knew that if I was going to stay in business, Africa was where I had to go,b Barkan told Reuters.
Over 60 percent of sub-Saharan Africabs bullish economic growth is attributable to the regionbs consumer spending, according to World Bank.
The bank believes that in the next 36 months, the regionbs economy will grow by more than 5 percent, beating the global average.
Reuters quoted consulting company McKinsey as estimating that Africabs buying strength will be about $1.4 trillion in 2020. In 2008 it was $860 billion.
Many shoppers in Accra, Ghana and Addis Ababa, Ethiopia prefer to spend time at the countriesb traditional markets.
However, according to a Reuters report, these tendencies are being altered.
At Nigeriabs Shoprite Mall on Lagosb Victoria Island, high street clothes are found in elegant air-conditioned boutiques. According to Whitey Basson, Shoprite CEO, the food retailer plans to build more shops in Nigeria.
The South African food retailer is now targeting Africabs fastest-growing economies including Nigeria, Zambia, Uganda and Angola.
Shoprite currently has seven shops in Nigeria, Africabs most populous country and these shops reportedly sold more MoC+t & Chandon champagne than in South Africa in the 12 months to March this year.
Nigeriabs This Day Newspaper has reported that the thirst for champagne by wealthy Nigerians has increased demand for the drink exponentially in that country.
According to This Day, Nigeria has become one of the worldbs largest customers of the fizzy drink.
It is understood that almost all shops in the countrybs cities, including Abuja and Lagos, sell lots of champagne, with MoC+t & Chandon being the most liked brand.
bChampagne consumption in Nigeria will reach 1.1 million litres by 2017, with 2011 consumption at almost N8 billion (B#31m),b This Day reported recently, citing latest numbers from the Euromonitor International survey.
bThe report showed oil wealth, hip-hop, movie stars and an elite obsessed with status symbols as demand drivers.b

 

 

 

 

Ethiopian Airlines: Dreamliner boosted profits Ethiopian Airlines CEO credits Boeing 787 planes for contributing to profits

 

 

Symbol Price Change
BA 103.92 -1.0100

ADDIS ABABA, Ethiopia (AP) — Ethiopian Airlines has made a record profit, the company’s chief executive officer said this week

Tewolde Gebremariam partly credited the profitability of Ethiopian Airlines to Boeing’s problematic 787 planes.

He said the company’s operating profit between July 2012 and June 2013 is 2.7 billion birr ($143,137,098) from a billion birr ($53,013,740) the previous financial year.

Citing unaudited company accounts Tewolde said that the company’s net profits also surged during the period to 2.03 billion birr ($107,617,892) from 734 million birr ($39,230,167) of the previous year, a 178 percent increase.

Tewolde said the performance is a result of “exceptionally dedicated employees” and the Boeing 787 planes he described as super-efficient. He said the planes helped the company save on fuel costs.

In January, Dreamliner’s around the world were grounded because of overheating lithium batteries. Ethiopian Airlines was the first to get the plane back in the air, on April 27. In early July one of the company’s 787 planes was damaged by a fire while parked at London Heathrow airport.

The plane had been parked for about 10 hours when a worker in the control tower saw smoke coming out, and activated a crash alarm.

British air safety officials have subsequently recommended that emergency transmitters on Boeing 787s should be disabled after finding that one of the squat orange boxes was the only thing with enough power to start a fire in the scorched tail section of the 787.

Tewolde said Ethiopian Air would have been even more profitable, if it had not been for incidents involving the 787 planes.

“Definitely the incidents and grounding have some impact. We were very fortunate that coincidentally the grounding of the planes were in what we call slack season . it’s a slow demand season. So were able to minimize the level of the impact,” said Tewolde.

He insisted the Dreamliner’s are “the future of the aviation” and his company is sticking with plans to buy five more of the planes and lease three others.

“Whenever we introduce the aircraft in any route, the load factor immediately increases, which means our customers love the plane, they are enjoying its features,” Tewolde said.

He said the incidents with the Dreamliner are part of a natural teething period “which is not unusual for a technologically game- changing aircraft such as the Dreamliner.”

Ethiopian Airlines operates an all-Boeing fleet with some 1,330 weekly flights. The airline flies to 76 international and 17 domestic destinations.

 

 

 

Shoprite,Africa's biggest grocer, ramps up Africa expansion as home market slows

Shoprite (SHPJ.J), Africa’s biggest grocer, is ramping up its expansion across the continent with 47 new supermarkets as its core South African consumer base grapples with high personal debt levels and growing fuel and transport costs.

Nearly half of South Africans failed to pay back their debts for three straight months this year, promptingB banksB to tighten their lending criteria, while a weaker rand currency fuelled inflation and higher petrol prices.
“It’s tough out there,” Shoprite deputy managing director Carel Goosen said at the presentation of the company’s full-year results.
Cape Town-based Shoprite, which reported an 11 percent rise in full-year profit that fell slightly short of market expectations, said it could double its stores outside of South Africa in the next four years.
Shoprite has 153 supermarkets in 16 countries outside South Africa. Those foreign outlets registered a 28 percent jump in sales in the 12 months to the end of June, nearly three times the rate of growth in its home market during the same period.
The bulk of the new stores would be in oil-rich Nigeria and Angola. The company sees scope for 44 new outlets in Nigeria and 21 in Angola in the next three to four years, Chief Executive Whitey Basson said.
After more than two years as an investor favorite, South African retailers are fast falling out favor due to concern that high personal debt levels and reluctance amongB banksB to lend more will squeeze spending in Africa’s biggestB economy.
South AfricanB retailB sales grew by a smaller-than-expected 1.9 percent in June, data from the government statistics office showed last week. ZARET=ECI
Shares in Shoprite, which are down about 20 percent this year, gained 3.3 percent to 166.73 rand in what analysts said was a recovery from oversold levels and optimism that its Africa focus would help it ride a slowdown in consumer spending.
“In Shoprite, you have a company that’s still growing profits and payingB dividendsB even in a tough environment and the results were not that far away from the consensus,” said Reuben Bleeders, an analyst at Cape Town-based Gryphon Asset Management.
The stock is trading close to its intrinsic value, according to Thomson Reuters StarMine valuation model, which takes into account the company’s most likelyB earningsB trajectory over the next five years.
Shoprite posted an 11 percent rise in headlineB earningsB per share to 675.4 cents in the year to the end of June, a touch below the 681 cents forecast in a Reuters poll of 11 analysts.
Headline EPS, South Africa’s primary profit gauge, excludes certain one-time items.
Sales rose 12 percent to 92.7 billion rand ($9.11 billion) and the company lifted its annual dividend by the same amount to 338 cents per share.
Reuters

General Electric Upbeat On Africabs Economic Prospects

Jay Ireland
The global power utility, General Electric (GE), on Monday said it was happy to do business in Africa, particularly East Africa, as the continent was facing a firm economic surge.
Jay Ireland, the GEbs CEO, said Africabs economic growth would increase the demand for infrastructure and world class technological solutions.
bThese needs can be partially and in some instances fully met by GEbs diverse technologies, services and solutions in key sectors,b Ireland said.
bLast year, we signed a Memorandum of Understanding (MOU) agreement with Kenya to develop projects in key sectors such as power, rail, healthcare, aviation and training & capacity building to deliver on the countrybs Vision 2030 plan,b Ireland said.
He said the company had pledged to work with public and private sector stakeholders in East Africa to solve the now and future energy problems in the region.
Ireland was speaking ahead of the 15thB annual East African Power Industry Convention (EAPIC) in Nariobi taking place from 10-11 September this year. GE is the diamond sponsor of the convention.
It is believed over 500 power experts are set to grace the occasion which will tackle many problems in East Africabs power sector, including undependable electricity provision which is disturbing economic growth and the huge pressure that is being pressed on the already aged infrastructure, leading to common power black outs.
VA

Standard Bank To Open Rep Offices In Ethiopia, Ivory Coast

 

Standard Bank
Standard Bank, Africabs biggest lender by assets, is poised to open up representative offices in Ethiopia and the Ivory Coast, it announced earlier this week.
Banks first open representative offices in the targeted countries before setting up shop and opening up a branch network offering a suite of their products.
By the time Standard Bank decides to go full steam ahead and start full-suited operations in the two countries, the lender would have increased its African operations to 20. It currently has operations in 18 African countries.
Reuters reported that the lender is paying more attention to Africa because it is planning to take advantage of opportunities that will be proffered by the growing middle class in the continent.
Standard Bank has disposed of its operations in the United Kingdom, Russia and Argentina to focus on the African continent.
Reuters quoted the bankbs spokesperson as saying plans of opening representative offices in the two countries are at an early phase.
In the past couple of years, Ethiopia has been seen as having great prospects for foreign banks. This is in view of the fact that it is Africabs second most populous country.
Late last week, Standard Bank said its African operations posted a 27 percent surge in headline earnings in the six months to June this year.
Sim Tshabalala, joint group CEO, said this performance backed the companybs Africa-centred strategy.
Standard Bank said African operations posted an 18.2 percent return on equity (ROE) during the period under review.
Ben Kruger, joint group CEO, said African businesses continued to be critical to the companybs forward-looking strategy.
VA

 

 

 

Microsoft Launches African Scholarship Programme

microsoft
In recognition of International Youth Day, Microsoft today introduced the 4Afrika Scholarship program, as part of its 4Afrika Initiative, through which it will provide mentorship, leadership and technical training, certification, university-level education, and employment opportunities for promising African students.
Mentorship will be provided by Microsoft employees from around the world, and employment opportunities will include internships and both part-time and full-time jobs within Microsoft, as well as with the companybs more than 10,000 partners across Africa.
Through the companybs 4Afrika Initiative and YouthSpark program, Microsoft has committed to helping millions of Africans get critical skills for entrepreneurship and employability.B The 4Afrika Scholarship program is one way the company intends to meet that goal, by helping ensure that promising youth have access to the education, resources and skills they need to succeed, regardless of their financial situations. To help redress gender disparity in higher education in Africa, the company is actively encouraging young women to apply.
Microsoft also announced that in the coming year it will provide 4Afrika Scholarships to 1,000 youth to pursue associate degrees in computer science and business administration with the first participating higher-education institution, University of the People. The institution is an online university dedicated to the democratization of higher education, which is affiliated with the United Nations, the Clinton Global Initiative, New York University and the Yale Law School Information Society Project.
bTogether with participating education institutions, Microsoftbs goal with the 4Afrika Scholarship program is to level the playing field for talented young African minds who might not otherwise have the resources, enabling them to get the education and skills they need to thrive in technology-related fields,b said Patrick Onwumere, director of youth enablement, Microsoft 4Afrika. bThe 4Afrika Initiative was designed to help ensure that Africa can become globally competitive, and investing in our highly motivated youth is a critical step toward making that a reality.b
Students wanting to apply for these first 4Afrika Scholarships to attend University of the People must be at least 18 years old, have a high school diploma and be proficient in English, since all coursework is taught in English. They must also have access to the Internet to participate in the online classes.
To help address the connectivity issue, the company is making working space available in its Microsoft Innovation Centers in Tunisia, Tanzania, Uganda and Botswana for successful applicants near those locations. In addition, Microsoft is working with various partner hubs across Africa to make similar arrangements for students in other locations.
bUniversity of the People works hard to ensure that university-level education is a possibility for the masses, and through the 4Afrika Scholarship program, Microsoft is helping us extend that possibility even further in Africa,b said Shai Reshef, president, University of the People. bWe are proud to be working with Microsoft to help create amazing opportunities and open new doors for Africabs youth.b

ITNA

Tanzania: Standard Chartered Injects U.S. $2 Billion to Power Africa

STANDARD Chartered has committed over 2 billion US dollars to finance energy projects under the US spearheaded Power Africa Initiative.

The five-year partnership between the United States, six African governments and the private sector represents a coordinated cross-border effort to build the regulatory, economic and policy foundation to double access to power in Sub-Saharan Africa.

The governments of Ghana, Tanzania, Kenya, Nigeria, Ethiopia and Liberia and a group of private-sector firms are taking part in the initiative to improve access to clean, reliable power in Africa.

Power Africa will add over 10,000 megawatts of cleaner, more efficient electricity generation capacity – equivalent to 250 per cent of Nigeria’s current power generation – increasing access to electricity by over 20 million new households and businesses.

Standard Chartered is committing 2 billion US dollars of new financing, more than 20 per cent of the initial private sector contribution to Power Africa, alongside the US government’s provision of seven billion dollars of financial support.

“More than two-thirds of the population of sub-Saharan Africa is without electricity and more than 85 per cent of those living in rural areas lack access,” the White House said in a statement.

Using its geographic coverage across 37 African countries and leading project and export finance expertise, Standard Chartered will work closely with US agencies, including the Export-Import Bank, the Agency for International Development and the Overseas Private Investment Corporation (OPIC) to develop the policy framework for specific projects.

Speaking in Dar es Salaam during President Barack Obama’s visit, Group Chief Executive of Standard Chartered Peter Sands said, “Throughout our 150 years of history in Africa, we have always strived to contribute to social and economic development, financing trade and investment across the continent.”

Allafrica.com

The Importance of Realism in Startups

It’s only 12 minutes long and if you’re a first-time entrepreneur (or second time, frankly) I encourage you to watch it if for nothing else than to get a sense that your struggles are universal.

TechCrunch interviewed me and asked me to talk about failure. So I spoke for 12 minutes about my own failures. I made many classic first-time mistakes which makes it easier for me to spot when others make similar bad choices.

It serves both as my warning signal of which teams to avoid funding, especially if I perceive they will make critical mistakes often led by hubris or naC/vetC). An obvious example is if they talk about M&A deals, teams they could just “bolt on” or “doing a rollup in their industry.”

It’s why I will never fund Conference Ho’s. I know that this is driven from an unhealthy ego, self-centrism and lack of regard for running options of one’s startup.

Vomit.

My errors also serve as my source for coaching others teams for more benign mistakes like over-building functionality, over-complicating the product or hiring too senior of people.

I think failure is critical for many reasons. Mostly because it makes us better leaders.

As I’ve written before, “Good Judgment Comes from Experience, But Experience Comes from Bad Judgment.”

We learn from mistakes. We learn from losses.

In part I felt it was important to let people know that we all have failure and make mistakes.

As I’ve said before, all startups need to realize that every other company still has to see itself naked in the mirror in the morning. Stop reading their press releases or hearing their founder talk about he is crushing it. We all know that people who truly are crushing it rarely talk about it.

Once you realize that we’re all the same, all dealing with the same pressures, fears and struggles – you’ll learn to keep more focused on what you’re doing and not whatever everybody else is doing.

In my “failure interview” with TechCrunch I talked about the biggest stress that really comes from startups – dealing with all the other people with whom you work. Startups are filled with enormously talented people – often product people & engineers. As an industry we’re hardly used to talking openly about feelings or resolving conflicts.

It’s why I believe startup coaches are so important and I wish I knew more great ones. If you have great experiences please leave names in the comments section.

The Success Bias

In the end it’s easy to look back triumphantly at our startup experiences and define every move as heroic.

We of course remember the positive outcomes, the rewards, the press celebrations at key moments or at the finish line. We of course get all of the accolades if at the tape there was a financial pay day.

And with so many acquihires these days you never really know who was financially successful and who was safely landing a plane with no engines.

It’s certainly nice to look at your past accomplishments in your bio.

Yet these only tell the stories from one side of the startup ledger. They are whitewashed falsehoods that mask the struggles. They are only one aspect of the startup experience.

Even along the journey and nowhere near the destination I see many startups with their chests pumped out touting their latest deals, showing off their swish offices funded by millions of venture funding (and not necessarily yet the commensurate business success to afford said offices or perks).

I understand the temptation. In a world with too much tech hype many teams feel the need to constantly spin.

I prefer the opposite.

I prefer realism in startups. It’s part of my stump speech to first-time founders or university students.

Avoid the stupid mistake I made (and talk about in the video):

  • raising too much money too quickly
  • building too many features (a mile wide & an inch deep)
  • getting too much press before we were ready
  • focusing on M&A to fix our problems
  • believing our own hype

Most of the days at a startup are a grind. While you’re in the moment it feels like there are as many failures as their are successes.

Even success feels hollow. I had a friend who was on the front page of the business section of one of the top newspapers in the country while his company was 30 days from running out of cash. And in all seriousness the article prompted his relative to hit him up for money.

Every first-time entrepreneur who has raised millions in VC will know the surrealism of people calling you a millionaire while you are figuring out whether you can really afford to pay for a vacation since your credit card is already a little bit bruised.

We put on our brave faces and turn up everyday hoping that in the end we won’t feel like frauds. In fact, I believe that one of the largest motivators for startups to avoid the ultimate failure is to avoid the humiliation of not having every positive press mention seem like you were a phony.

It’s not that you don’t believe in your ultimate outcome – you have to believe in order to be insane enough to continue the journey against all odds – it’s just that there is nagging self doubt.

There are of course also external factors you can’t control. You think investors will continue to finance you – they promised they would – but you never really know. Until you know.

In the end you don’t always get the answer you had hoped for.

Youth vs. Wisdom

In your youth you have the bravado to face uncertainty with the blind optimism that success is inevitable. In short, you don’t know what you don’t know. I keep coaching an investor friend of mine that this can be a good thing at times and that he shouldn’t be too quickly to discount lack of experience from a team with serious talent and full of ambition.

This “naive optimism” is why I believe younger entrepreneurs are more likely to produce insanely big outcomes.

Yet youth often brings a triumphalism that blindsides entrepreneurs into missing the macro picture.

It is why younger entrepreneurs are more likely to drink their own Kool-Aid, which of course is dangerous.In bull markets many credit themselves with brilliance and industry stewardship when perhaps they are merely riding an ephemeral trend fueled by speculative capital.

Age brings wisdom. Timidity, too. And sometimes cynicism. But age brings perspective. If older entrepreneurs are more cautious it’s because life’s experiences have taught them to be so.

Older entrepreneurs tend to spend cash more wisely, for example. They feel less in a rush to keep up with the Jones’s since they’ve seen a few boom-and-bust cycles and they know it’s a marathon.

I find older entrepreneurs more willing to have pragmatic debates about competition as well. They realize that there is often more to be gained by attacking the existing market structure than each other.

Older entrepreneurs tend to avoid lawsuits where possible. There is less ego. Younger people still like to fight.

And for the most part they shy away from premature press because they know the consequences of getting over one’s skis.

The Case for Realism

I try my best to blog from a realistic perspective because partly because I believe it’s important for people on the journey to have a realistic perspective and not feel ashamed at their progress or performance.

It’s why I wrote one of my most read posts – Entrepreneurshit.

Because I know many people at big & successful companies or at fast-growing startups I know that even they have struggles, doubt, insecurities, fear of failure.

If you knew that it might help you realize that your failures are not so special.

There is always a tomorrow – even after bankruptcy. A second act. A new career if not a humbled one.

That’s why I loved the TechCrunch interview.

It gave me a chance to make sure that wherever you are in your career path you would know that we’ve all been there.

Even if our bio’s don’t mention it.

Failure is ok. It’s not the same as losing or being a loser. It’s a set back.

And it’s how you handle your failures that define you more than anything else