N4.92 trillion budget throws up fresh opportunities for phone industry

Ben Uzor Jr

Goodluck Jonathan’s proposed N4.92 trillion budget is expected to open up fresh opportunities for mobile phone companies in Nigeria’s highly competitive market. President Goodluck Jonathan, who presented the 2013 budget before the joint session of the Nigerian National Assembly, revealed that the Ministry of Agriculture, will work with the Ministry of Communication Technology under the leadership of Omobola Johnson to ensure that 5 million women farmers and agricultural entrepreneurs receive mobile phones in order to assist them access information on agro-inputs through an e-wallet scheme. According to him, the move was part of strategy geared towards integrating women in society.

“We have developed an innovative approach to mainstreaming gender issues starting with 5 pilot ministries – Agriculture, Health, Communication Technology, Water Resources and Works. These ministries are signing MOUs with the Ministry of Women Affairs to deliver on specific services for women. The Ministry of Agriculture, for example, will work with the Ministry of Communication Technology to ensure that 5 million women farmers and agricultural entrepreneurs receive mobile phones to be able to access information on agro-inputs through an e-wallet scheme”, he stated. Industry experts have confidence that the scheme would further deepen the mobile phone sector.

According to them, it would further throw up new vistas of opportunities for application developers, phone makers and telecoms operators who are at the moment all jostling to expand the scope of Nigeria’s phone market.  Yemi Johnson, a mobile applications developer told Business Day that the scheme represent a huge opportunity for the mobile phone industry. “The federal governments’ agriculture programme is throwing up new opportunities for new firms to spring up. It represents an enormous opportunity for telecoms operators, device makers, apps developers to really expand the market. These are the kind of prospect that the industry has been craving for.”

Onome Okwa, communications manager for Resourcery Plc, an Information Technology (IT) integration company sees Jonathan’s pronouncement as a case of misplaced priority. Okwa told Business Day in a phone interview, “You don’t just throw up policies in the air without understanding the issues on ground. In Kenya, for instance where this sort of initiative was successful, the country first developed a robust mobile payment system and people naturally gravitated to it. We don’t have that here at the moment. How many women are living on sustenance farming today? We need to have that figure before we embark on such an initiative. The competition in the mobile phone market has reduced the prices of device significantly. As far as I am concerned, Jonathan is just playing to the gallery”.

In his speech, President Goodluck Jonathan said the budget gives priority to the concerns of security, infrastructure, food security and human development sectors. “It is a Budget that introduces a series of innovative features. This Budget is a push in the right direction borne out of our well thought-out and articulated developmental policies. This is a budget for every Nigerian. It belongs to the farmer, the investor, the entrepreneur, the youth and the elderly. Yes, we have challenges, but also incredible opportunities. Ours is the task of transforming these opportunities into real, tangible outcomes which all our people can experience and call their own. We need the cooperation of everyone to make it work, to grow the economy, and to create jobs for our people”, Jonathan posited.

MTN tackles identity fraud with new security number

Ben Uzor Jr

Mobile network operator, MTN has dealt a massive blow to identity fraud in Nigeria with the introduction of customer security number for the convenience of its over 42 million subscribers. The security number, according to the telecoms firm is aimed at significantly improving customer experience on the MTN network by empowering customers to resolve most of their issues using a number of avenues, including telephone and the internet. Besides, Identity theft is when your personal details are stolen and identity fraud is when those details are used to commit fraud. Speaking at a media parley in Lagos recently, Akin Braithwaite, customer relations executive, MTN Nigeria, said that the MTN Security Number would open the door to a world of convenience and Do It Yourself (DIY) for MTN customers.

According to him, the newly introduced MTN Security Number would give customers full access to the firm’s entire service channels like Walk-in centres, Customer Care Help line 180, Web SelfService and My IVR-181, adding that it also affords customers security and protection from mobile fraud. It offers uniform authentication and unique identity on the MTN network. Braithwaite pointed out that the Security Number, which consists of 12 digits Identification number and 4 digits Security Key, totally unique and personal to each customer was already being forwarded to subscribers via SMS. He called on customers who have registered their SIMs but have not received notification of their MTN Security Number, to visit any MTN Walk-in Centre closest to them or call customer care toll free line – 180.

Braithwaite further added that upon verification of ownership of the customer’s SIM, the security number will be sent to the customer. The introduction of the number, he said, was another first by MTN in the industry, adding that although the service was conceived a while ago, the process and system needed time to be designed, developed and tested to be error-proof to ensure a smooth implementation. The security number “is very important and customers must protect it, keep it private and not disclose it to anyone. MTN Nigeria he added will not be held liable for any loss or damage resulting from the disclosure of the number to third parties. “We advise that customers change the last 4 digits or Security Key of their security number immediately they receive it by simply logging on to www.mtnonline.com to access the Web Self Service or visiting any MTN Walk in Centre closest to them.

Speaking in the same vein, Akinwale Goodluck, corporate services executive, MTN Nigeria, said it would attest to MTN’s commitment to leading innovation and customer satisfaction in the industry. “MTN will continue to invest and innovate in order to deliver world class information and communications technology services to Nigerians,” Goodluck said. He enjoined all MTN customers who were yet to register their SIMs to quickly do so to partake in the exciting benefits of the newly introduced MTN Security Number.

High roaming charges…a headache for many subscribers

Ben Uzor Jr

The roaming business, for many telecommunications operators is an important source of revenue.  Whilst this service has assisted mobile networks grow their revenue base, it has drilled a huge hole in pockets of subscribers, in most cases pitching them against the operators. International roaming service enables MTN, Glo, Airtel and Etisalat customers to make and receive calls, send and receive text messages while visiting another country outside their network providers’ region. Countless subscribers have complained that they have been confronted with huge roaming bills when they travel abroad. They say operators routinely rip them off through roaming charges, which are often very expensive. Let look at the international roaming charges from two networks: MTN and Globacom.

According to MTN Nigeria, prepaid customers roaming in other African countries pay N600 a minute for calls to MTN and other networks in Nigeria as well as America, Africa, Asia Pacific, Europe and Middle East. When roaming from Asia, the subscribers pay N600 a minute to MTN and other networks in Nigeria while paying N500 a minute for calls to other parts of the world. This is similar to calls made from Europe. However, MTN subscribers, who roam their lines from the Middle East, pay N800 a minute to MTN and other networks in Nigeria, while paying N500 a minute to America, Africa, Asia Pacific, Europe and the Middle East. When roaming from North America, the prepaid MTN subscribers pay N900 a minute for calls to Nigeria, and N500 a minute for calls to the other parts of the world.

In the case of Globacom, subscribers who roam from the UK pay N44.85 a minute for received calls and N493.01 a minute for calls to Nigeria. In the US, the Glo subscribers pay N198.12 a minute for received calls and N723.29 a minute for calls to Nigeria. While roaming for the United Arab Emirate, Glo subscribers pay 44.85 a minute for received calls while they part with N470.53 a minute for calls to Nigeria. Similarly, whopping sums of N276.66; N379.67; N388.53; N88.64 and N126.76 are paid for a minute call by Glo subscribers, who roam from Canada, China, Germany, Ghana, and South Africa. In addition, both MTN Nigeria and Globacom cautioned that the rates were subject to fluctuations in foreign currencies and change in rates from the roaming partners….Yeah right!

But if you plan on travelling soon or just want the comfort of using your own phone, follow these tips to reduce the shock when you check your bill a few weeks after your trip. First of all, call your operator before you depart. But know that you may have a hard time getting a straight answer from your service provider. But at the very least, your service provider may be able to review your most recent bills - or even tally the damage done during recent trips - to help determine what plan or strategy would be best for your upcoming business trip or vacation. Secondly, track usage while traveling to avoid big surprises. It can also be a pain to keep track of your calling and data usage while you're trying to enjoy yourself abroad or conclude a business agreement, but the financial consequences can be worse.

Many smartphones have built-in usage trackers. Third-party apps can help monitor your minutes and data-crunching. Please and please, use Wi-Fi for calling and data usage. Most BlackBerry and Android phones come equipped with a Wi-Fi calling feature, which means you can sidestep international roaming and long-distance charges when calling the U.S - if you're connected to a Wi-Fi network. Lastly, staying off the grid is not an attractive option for everyone, but if you want to avoid international roaming charges for phone conversations, forego making or answering phone calls while traveling around the world. Power off your device to avoid text message charges. If you leave your smartphone powered on, many mobile devices automatically access networks to fill your inbox with e-mails or to update your apps if they are set for automatic updates.

J.P Morgan, French coy expand Nigeria's internet business with new investment

Ben Uzor Jr

There is a flurry of activities in Nigeria's online retail and online music markets respectively in the mould of new investment drive, strategic partnerships, all geared towards taking advantage of the country's budding middle class and massive online population. Currently, Nigeria has the highest online population in Africa with 45 million Internet users. Benuzorreports learnt that J.P Morgan Asset Management had made robust investment in one of Nigeria and Africa’s fastest growing electronic commerce retailers, Jumia.  As at the time of filing this report Business Day could not get Jumia or J.P Morgan to put a figure to the actual deal but the investment is believed to be in the double-digit million dollar range. Besides, J.P Morgan is a global company which has assets under supervision of approximately $2.0 trillion and assets under management of $1.3 trillion as of June 30, 2012.

It was gathered that JP Morgan would take a substantial stake through a German holding company in an all cash-for-equity investment. Jumia was launched with the support of Rocket Internet – the European incubator of internet start-ups.  Elsewhere, less than a year after French-based online music streaming service, Deezer first announced that it would launch in Africa, the service is now officially available in Nigeria. Earlier this year, in June, the service was first launched in two African countries – Mauritius and Ivory Coast — via the Orange mobile network. In Nigeria however, Deezer is offering themed and artist-based radio channels and access to music on demand in 30-sec clips. Benuzorreports checks reveal that that the French online firm is keenly working on forging strategic partnerships with telcos notably MTN, Etisalat and device manufacturers such as Nokia, Samsung to further deepen the scope of the market.

This year, Deezer raised $130 million in a round led by Warner Music Group owner Access Industries. As it is, subscribers will now be able to stream unlimited Nigerian music for free as the music service firm currently offers Nigerian music on its platform from artists such as P-square and 2Face. The firm was initially launched in France in August 2007, Belgium and the United Kingdom (UK), and now has over 20 million users, with 6 million unique visitors per month. But Deezer is not coming into a virgin business landscape. Market watchers told Benuzorreports that it would have to compete in an already brewing online digital music war. According to the market watchers, the French music streaming service will have to do battle with local music services such as iROKING and Spinlet as they jostle to provide the best-in-class digital music content and social features for Nigerian consumers and subscribers.

Tunde Kehinde and Raphael Afaedor, co-founders and joint-chief executive officers (CEOs) of Jumia, in a statement said:  “This investment is a real turning point for Jumia, and electronic commerce in Nigeria. “With this investment, we will  strengthen our current footprint, offering our customers more brands, more categories and more services as well as improving operations; we are among the pioneers of e-commerce in  Nigeria and this investment confirms that Nigeria will become a very large market in the very  near future.” Speaking in the same vein, Robert Cousin, J.P. Morgan Asset Management Portfolio Manager, who worked on the deal from New York, commented further saying, “We are really excited to partner with Jumia as it continue to expand their electronic commerce presence in Africa.” 

For many analysts and market watchers, the steady growth of the formal retail sector in Nigeria, along with growing number of internet users in the country, is indeed driving the expansion of online retailing. By global standards, the electronic commerce market in Nigeria is still undersized, but figures of online sales have shown a steady increase over the last five years, as the one-time nervousness of Nigerian shoppers takes a backseat and a growing number of techno savvy consumers turn to the cyberspace for retail therapy and bargain hunting. This retail trend, according to a recent report by Euromonitor International, a global market research organisation, recorded a 25 percent growth in 2011 valued at N62.4billion, which is an additional N12.5 billion to the N49.9 billion recorded in 2010.

Pushing this retail segment most is online retailing, which recorded 25 percent growth during the period under review, while other non-store methods like direct selling and vending trailed behind. Jumia was launched earlier this year and offers a wide range of general merchandise categories such as fashion apparel, shoes, electronics, mobile phones, books, toys, beauty products and many more categories. The firm currently operates in Nigeria, Egypt and Morocco, with plan to expand in additional countries in the coming months. On the other hand, Deezer is offering a 15-day Free Trial to try out its premium services, an unlimited access to the firms’ catalogue in enhanced sound quality using a computer, as well as access to exclusive content and recommendations with the ability to unsubscribe during the 15 days.

Telcos lose N234bn potential revenue as inactive lines surges

Ben Uzor Jr

The growing number of inactive telephone lines has cost telecommunications companies operating in Nigeria an estimated N234bn in revenue loss in first seven months of 2012, according to investigation. The figure, as gathered, represents the total estimated revenue losses recorded by the telecoms companies, comprising the Global System for Mobile Communications operators, the Code Division Multiple Access operators and the fixed line networks in the country spanning January 2012 and end of July 2012. It was gathered from the latest industry data released by the Nigerian Communications Commission, the telecoms industry regulator that the number of connected but redundant or inactive telephone lines in the industry has grown significantly from January reaching 37.6 million at the end of July, 2012.

According to the findings, in January 2012, the number of inactive telephone lines stood at 31.9 million. The number of redundant phone lines increased to 35.2 million in February; 35.8 million in March but slightly fell to 35 million in April with operators. In May, the figure dropped 32.6 million inactive lines; while in June and July, the figure surged 33.7 million and 37.6 million respectively. Meanwhile, the cost implication of the inactive telephone lines monthly was based on conservative estimate, using the current industry Average Revenue Per User in Nigeria by the Business Monitor International (BMI) Limited, a research and consulting firm.

According to BMI, the current ARPU in Nigeria is estimated at N1, 011. ARPU is the financial benchmark used globally by telecoms firms to measure the average monthly or yearly revenue generated from an average subscriber. Consequently, with an APRPU of N1011 and 31.9 million inactive telephone lines recorded on the networks in January, 2012, telcos made an estimated loss of about 32.2bn. In February, the revenue losses increased to N35.5bn and in March, it moved to N36.1bn. However, the loss in revenue fell slight to N25.3bn in April; N32.9bn in March while it increased to N34bn in June and jumped to N38bn at the end of July 2012.

According to the NCC data, as at the end of July, 2012, Nigeria had 140.4 million connected telephone lines on all mobile networks in the country, 03.4 million of which were active, leaving about 37 million telephone lines inactive. Industry analysts confirmed to National Mirror that the huge number of connected telephone lines, which subscribers have dumped for another line, was putting pressure on the revenue generation of telephone firms. One of the analysts, Akin Akinbo, said: “It is true that many subscribers have today dropped one SIM line for another one, ostensibly because the new one is offering reduced tariff or special value-added services or as a result of a promos being run by an operator, which promises more goodies for the operators or as a result of poor coverage of an operator in preference for another one.