Have we been putting too much blame on one person? 🤔
New Leaders In Burundi and Lesotho
|May 23|| 4|
What was the best part of your week?
We’d start with correcting an error made in last week’s newsletter, we wrongly stated that Piggyvest reportedly has about one million users which saved about $80 billion last year alone.
The correct figure is about $80m. Here’s a link to the exact part of the interview where it was said.
Thank you to everyone who pointed that out, we bet the folks at Piggyvest wouldn’t mind having $80B tho. At the rate at which they’re moving, it’s only a matter of time.
Now to the stories of the week
Airtel Africa’s performance report
Airtel Africa, a subsidiary of Indian owned Bharti Airtel which owns 65% of the company released its annual financial reports for the year ended as at March 31st, 2020, here how they performed and what might be next for them.
Tell me more
Overall, it was a decent year with a profit after tax of $408m, 4.4% less than that of 2018. While revenue for the quarter was $899 million up 15% from $781 million in the same period in 2019. Breaking the revenue figure down, although voice makes up a significant share (56.7%) of total revenue, it grew the least at 5.9%, while data (35.6%) and mobile money (24.3%) grew a lot more.
What this means
Data and mobile money contributed about 26 per cent and 9 per cent of overall 2019 revenue while also, growing by about 35 per cent.
Data: As seen in the case of MTN, African Telecos are seeing a decline in Voice calls revenue due to competition from applications such as Whatsapp, Microsoft Teams and Zoom which facilitate calls over the internet. On the plus side Telecos still make back some of the money lost from voice calls on data.
Mobile Money: During the last earnings call, stakeholders repeatedly asked Airtel what’s next for Mobile Money. Specifically, When would Airtel get its mobile money license in Nigeria, with MTN being the only other Teleco that has a Mobile Money License?
FYI: As per, World Remit, Mobile money is a technology that allows people to receive, store and spend money using a mobile phone. Mobile money is a service that stores funds in a secure electronic account, linked to a mobile phone number. In some cases, the mobile money number will be the same as the phone number, but not always.
Why specifically Nigeria?
Airtel operates in 14 countries and Nigeria contributes about one-third of Airtel’s revenue in Africa. Airtel segments its African Market interestingly into 3 major groups: Nigeria, East Africa and the Rest of Africa.
The State of Mobile Money in 2019: Unlike in East Africa where Mobile Money is widespread in use, with 102m (10.6% increase) active mobile money accounts, West Africa is still playing catch up with 56m active accounts (21.5% decline).
Big Picture: Mobile Money appears to be the next grow lever for Airtel with shareholders asking whether Airtel can sustain this growth. Airtel certainly would need to get it’s Mobile Money license later in the year or worst case early next year for it to maintain this growth rate.
New Leaders In Burundi and Lesotho
Riccardo Annandale (Unsplash)
Lesotho, one of the 10 least populated countries in Africa, officially has a new prime minister.
69 years old former Finance minister Majoro, has been sworn in as the new Prime Minister after the rumbling period of political hazard merged with a messy family murder case involving the former Prime Minister Thomas Thabane.
A little detail
Thabane has been under the pressure to resign from office after being considered a major suspect, alongside his current wife, for the murder of his first wife two days before his inauguration in 2017. She reportedly refused to divorce him, denying him legal liberty to marry his recent wife who he later got married to two months after
How it turned out: The political crises brought about an official agreement for Thabane to resign, which he hesitated at first. While he planned to leave office this July, he was put under greater pressure to step down sooner and he did.
What is expected of the new PM: Moeketsi Majoro is a former senior IMF official and will now be faced with the task of rekindling a near-collapse economy currently under degradation due to the economic effects posed by the coronavirus pandemic. He is also to unite an irritable political elite in the country that has suffered several dictatorial rulerships since 1966 independence.
Talking about New leaders, despite the coronavirus pandemic, Burundi still went to the poll.
After 15 years of alleged bad leadership and right abuses, President Pierre Nkurunzizais of Burundi is giving way for a new government. Ruling party candidate and retired army general Evariste Ndayishimiye is running against opposition leader Agathon Rwasa.
At the poll: There are signs of social distancing. The government encouraged people to head to the polls, flouting the very pertinent global social distancing order by the World Health Organisation.
Why the rush?: Although the country has only 42 coronavirus cases and one death, the rush to vote ushers them into a new phase of democratic freedom after 58 years of independence but still bound by undemocratic leadership.
In the past: Burundi has faced international criticism for various leadership negligence, for example, allowing the ruling government to run for a third term in 2015 against the constitution.
In a nutshell: The credibility of the election is questioned considering previous crackdowns of the independent media and so much violence in the country since their last election five years ago but the good news lies in their freedom to choose their leader this time, which is a step towards political liberty.
Have we been putting too much blame on one person?
When you make a call to or from a rural area that’s bad, do you blame the Teleco or the govt?
If you’ve been blaming only Telecos, you have been placing too much blame on only one part of the cause.
In Africa, there is a tendency to wonder about the penetration of services offered by telecom operators in their markets. In sub-Saharan Africa, stats show that only 23.6% (239 million people) use mobile internet service in sub-Saharan Africa, well behind the global rate of 53.6% in 2018. What’s the major cause of this?
What we found out - RoW Charges
An acronym for Right of Way, RoW Charges refers to a government levy for a phone company’s legal right to set up network infrastructure in a specific location. So basically it's like a tax.
The tricky situation
Telco services typically prioritize where they invest broadband services. Businesses prefer to invest in urban areas because they are inhabited by lots of people that would use these services, which provides profitable returns. This action consequently ignores the segment of the population residing in less-developed vicinities. In some states, the levy could represent 70% of the entire cost of laying the network infrastructure. 😳
It gets trickier
MTN Group which has operations in 18 African countries also reported that RoW charges vary significantly across geographical locations of African countries. In Nigeria, telcos have several levies beyond the generic RoW which vary across several government parastatals, industry sectors and tax authorities.
It takes two to tango
Practically, to solve this problem, shared infrastructure between operators could reduce costs to the operators and translate into reduced price and more investment in less viable locations. The government also has a role to play in finding a balance in generating revenue and reducing barriers to entry to telco operators so they can provide valuable services to the underserved population.
Batman and Robin...or Facebook and Google
Last week, we wrote about Facebook working on a project that would connect Africa to Europe and the Middle East. Google has also talked up Equiano, its fully funded network infrastructure that would connect Africa to Europe. With more projects like this, a more connected Africa is assured in the nearest future, but not without reducing RoW.
Worth reading 📚
By crawling a child learns to stand.
— African Proverb
Thank you for reading this week’s edition 💙