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Ecuador telecoms market: challenges and opportunities

Inside Telecom Staff

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Telecom

Ecuador’s telecom market is considered one of the most expensive markets in Latin America. Obtaining a license is subject to bureaucracy and instability in the sector. A new report by Research and Markets entitled, “Ecuador mobile market 2020-2024” pointed out that the Ecuadorian telecom sector is dominated by three major players – América Móvil’s Conecel, Otecel, and CNT with 52.5%, 30%, and 17.6% shares of the market by subscribers, respectively.

In 2019, Ecuador officially announced the “Ecuador digital strategy”. The government revealed its innovation plans which sheds light on spectrum tendering, cybersecurity initiatives, as well as the introduction of IoT to different Ecuadorian sectors.

However, experts agree on the urgent need for legislation reform involving the Ecuadorian telecom sector. In fact, the spectrum is affected by a policy that focuses on revenues through spectrum charges. General Secretary of Asiet- the Inter-American Association of telecom companies Maryleana Méndez said that, “Spectrum in Ecuador is very expensive. And not only the license price, but the recurring payments for spectrum,” states BNamericas.

Back in 2019, Claro – a part of America Móvil – announced plans for 5G testing in Ecuador as part of a USD 450mn investment over 3 years. Moreover, the Chinese telecom giant Huawei has expressed interest in taking a part in the development of the 5G network in the country. Arcotel, the agency that regulates and controls the telecom sector in Ecuador had proposed plans to tender spectrum in the 900MHz, AWS, and 3.3-3.6MHz bands before the end of 2019.

On November 22, 2020, US Secretary Mike Pompeo tweeted, “Three more countries are now members of the Clean Network: Brazil, Ecuador and the Dominican Republic. 53 clean countries, 180 clean telcos, and dozens of leading companies-representing 2/3 of the world’s GDP- have already joined the tide toward trusted 5G.” The Clean Network Program was unveiled in April 2020 and aims to implement digital trust standards with a coalition of partners while blocking high-risk equipment vendors.

Fernando Flores, President of the Committee on Sovereignty, Integration, International Relations and National Security in Ecuador said that his country “is focusing on promoting economic growth through digital transformation. “Moreover, he added, “The trust guaranteed by the Clean Network could accelerate our efforts to promote economic growth while guaranteeing our national security,” according to the US Department of State website.

Generally, those implementing a complete ban on Huawei are facing social and economic challenges amid their digital transformation plans.

Ecuador has long suffered from poor telecommunications infrastructures, and closing the digital divide remains a challenge for the country, according to BNamericas. Currently, only 56% of Ecuadorans are using the internet.

The decision is controversial as it seems that Ecuador needs cheaper vendors to enhance its telecom infrastructure and services. Back in November 23, 2020, and during the opening of the Ministerial Conference on the Information Society in Latin America and the Caribbean, Ecuador proposed the creation of a Latin American Fund for the deployment of telecommunications infrastructures in rural areas.

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Three Angolan operators cleared for IPO listing with more to come

Inside Telecom Staff

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Three Angolan operators cleared for IPO listing with more to come

Angola has cleared the way for three state-owned telecoms companies to be listed on Initial Public Offerings (IPOs), according to a presidential decree published on Thursday.

Local media have reported that two presidential decrees have authorized IPOs for the privatization of state assets in TV Cabo Angola and Multitel respectively. However, a third decree has sanctioned a “limited tender by prior qualification” for the government’s shares in internet service provider Net One.

It is important to note that all three orders grant the country’s finance minister lead authority over privatization efforts, which include decisions over the validity and legality of the process.

Angola’s sale of its stakes in several telecoms companies is part of President João Lourenço’s strategy to oust his predecessor’s family from the country’s business community.

Angola Telecom, which is wholly owned by the government, holds a 49.27 percent stake in TV Cabo Angola and a 30 percent stake in Multitel. Another 60 percent of the latter firm is held by state-owned enterprises, with oil firm Sonangol taking 40 percent and Banco de Comercio e Industria (BCI) holding 2 percent.

The entire 90 percent state-held stake in Multitel is set for privatization, along with 51 percent of Net One held by MSTelcom, which is wholly owned by Sonangol.

In parallel, several media reports have surfaced noting that five other Angolan operators will also be auctioned off during 2021 under the government’s privatization initiative. These include AT, Angola Cables, Angola Comunicacoes e Sistemas, MSTelcom and Unitel, which is the mobile market leader.

Telephone directory company ELTA and postal operator ENCTA may also be privatized to some extent.

A 60 percent stake in Angola Cables is currently split between AT (51 percent) and MSTelcom (9 percent). Angola Comunicacoes e Sistemas is 100 percent owned by MSTelcom and Sonangol, which itself is tapped for privatization by 2022.

MSTelcom and Sonangol also each hold a 25 percent stake in Unitel, with the former’s slated for sale via public tender. The latter obtained its holding from Brazil’s Oi in January 2020.

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Virtual Card for online transactions created by Airtel Uganda and Mastercard

Karim Hussami

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Airtel Uganda and Mastercard

Digital transformation is evolving so rapidly worldwide to the point where it has transformed our lives by digitizing each aspect of it, especially the financial part, and will continue to do so in the next few years.

While total transaction value in the digital payments segment is projected to reach US$6,685,102m in 2021, according to Statista, “The total transaction value is expected to show an annual growth rate (CAGR 2021-2025) of 12.0 percent resulting in a projected total amount of US$10,520,219m by 2025.”

That said, Airtel Uganda, in partnership with Mastercard, introduced a virtual debit card offering Airtel Money customers a safe, convenient and secure platform to transact online globally.

Virtual card to help non bankers

How will this new form of payment help customers? The virtual card which is valid for one year allows Airtel Money customers in Africa, especially those without a bank account, to make payments to local and global online merchants.

Those merchants like Netflix, Uber, Amazon, Google play, Aliexpress, Alibaba, accept Mastercard cards while maintaining that the customer’s financial data is always secure and private.

Amit Kapur, Chief Commercial Officer Airtel Uganda, said “Airtel and Mastercard have a shared passion for digital transformation and making mobile financial services accessible to everyone across the country. Airtel Money customers can conveniently do online shopping, pay tuition and subscriptions to their favorite sites and apps by simply registering for a virtual card through very easy and familiar steps.”

In addition, customers have the option to delete the card whenever they want and create another one immediately re-highlighting the security proofing the card offers.

“Across the MEA region our digital partnerships strategy remains focused on enabling digital transformation for our partners so that their consumers can enjoy seamless access to payments and a superior experience. We are very excited to partner with Airtel to lead the transition to digital by enabling access to their millions of consumers for online and in-person payments across the globe,” Amnah Ajmal, Executive Vice President for Market Development, Mastercard Middle East and Africa, said.

Since the virtual card is linked to the customer’s Airtel Money Wallet, the Airtel Money balance is always the card balance. All transactions have a maximum charge of UGX1,000.

Check frauds and additional risk

Every new technology has its pros and cons, and the virtual card is also comprised in this category.

The advantages include:
  • The ability and capacity to check for fraud related activities.
  • The cards have a short time lap and expire within a short period, making hackers not interested in them.
  • The processing fee is very low compared to other payment schemes on the internet.
  • No fee is processed without the consent of the buyer.
The disadvantages include:
  • Risk taken by the merchant because the goods are delivered to the customer before the money is transferred to the company account.
  • The recurrent expenses become a hassle because, your card number is likely to have expired by the time of your next purchase period.
  • There is a long wait between the sale and the payment being deposited in the merchant’s account.
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Uganda bans social media in run off to presidential election

Yehia El Amine

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Uganda bans social media in run off to presidential election

Uganda’s communications regulator has imposed a blanket ban on all social media and messaging apps since Wednesday until further notice, South African telecoms company MTN Group said in a statement.

Reuters confirmed it had seen a letter from the Ugandan communications regulator dated 12th January 2021 which ordered internet service providers to “immediately suspend any access and use, direct or otherwise, of all social media platforms and online messaging applications over your network until further notice.”

The social media ban comes on the eve of a tense presidential election, which sees long-time leader Yoweri Museveni go toe-to-toe with popular singer Bobi Wine (otherwise known as Robert Kyagulanyi Ssentamu).

According to Internet monitor NetBlocks, Ugandans faced difficulties accessing the Internet via mobile devices and wireless connection as of Wednesday, as the country entered its nationwide blackout from 7 p.m. (16:00 GMT).

“I can confirm that MTN Uganda and all Licensed Telecommunication Operators in the country have received a directive from Uganda Communications Commission (UCC) to implement a suspension of the operation of all internet Gateways and associated access points,” Nompilo Morafo, MTN’s group executive for corporate affairs told Reuters.

MTN Uganda (MTNU) is Uganda’s leading mobile operator with 60 percent of the market.

“MTNU will continue engaging with the relevant stakeholders to limit the duration of the service disruption,” Morafo added.

Reuters cited an anonymous source from Uganda’s telecoms sector as saying that the government had “made clear” to executives at telecoms firms that the ban was a retaliatory move after Facebook blocked access to certain accounts supporting the government.

Facebook confirmed on Monday that it blocked a network located in Uganda with apparent links to the country’s communications ministry for posting from fake and duplicate accounts.

“Any efforts to block online access to journalists or members of the public are unacceptable breaches of the right to information,” Global media watchdog The International Press Institute said in a statement regarding the Ugandan government’s blackout.

The upcoming election has been riddled with controversy, with the government violently cracking down on opposition rallies citing a breach in their COVID restrictions on large gatherings.

In parallel, supporters and various rights groups have accused the government of attempting to stifle Museveni’s opposition.

Wine has amassed a huge following within the country’s young electorate, where almost 80 percent of the population falls under the age of 30. Wine is aged 38, which is half Museveni’s 76 years.

President Museveni has been the country’s long-time president since seizing power as a guerilla back in 1986 and is widely credited to have stabilized the country following the bloody dictatorships of Milton Obote and Idi Amin.

Museveni, however, has long been accused of intimidating opposition candidates and supporters as well as rigging elections since his party – National Resistance Movement party – introduced them ten years into their reign.

The lead up to elections has been extremely violent to say the least, with 54 killed by police and military officers following protests that erupted back in November 2020 when Wine was arrested by authorities.

The popular singer has mainly relied on Facebook to cover his campaign and press conferences, as most local media outlets are state-owned, much of whom refusing to give Wine a platform.

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