In a recent public letter, some large MNOs made the claim that “[d]igital platforms are profiting from “hyperscaling” business models at little cost while network operators shoulder the required investments in connectivity.” The letter implies that digital platforms have rolled out their platforms at a relatively insignificant cost. It also implies that MNOs are unable to build their own applications to compete against digital platforms because of some unspecified “blockage”.  In fact, nothing stops telcos from investing in other parts of the Internet value chain. Some of these investments, such as mobile money, have been hugely successful, while others have […]

In October this year, the Zambia ICT Authority (ZICTA) released a report assessing the impact of the National Budget on the ICT sector. It’s a fantastic document that should be required reading for any regulator in Africa. The main focus of the report is on the impact of tax policy on the ICT sector. The biggest change in the 2023 budget is the removal of a two-tier corporate tax rate, where ICT companies paid higher taxes than companies in other sectors of the economy. Prior to the 2023 budget, ICT sector companies paid  corporate taxes of 40% on profits over […]

RIS has been working on the status of Community Networks (CNs) in Africa. Our first challenge was simply the lack of data about CNs. Unlike formal telecom operators such as mobile networks like MTN, Airtel or Vodacom, many CNs purposefully operate in a grey legal area. This partly reflects the history of the telecom sector, which was dominated by fixed-line incumbents in the late 20th century and is now dominated by mobile operators. Until recently, regulators have either actively excluded CNs or ignored them. This means that some CNs operate without official licenses and want to keep a low profile.  […]

Today, Dr. Christoph Stork from RIS moderated the ITU Workshop on “Economic and fiscal incentives to accelerate digital transformation of data and applications over telecommunication infrastructure”. Dr. Stork provided an overview of the impact of OTTs on telco revenues and profitability, how to measure progress towards a faster Internet and the impact of taxation on broadband. One of the slides shows how quickly data speeds and latencies are evolving and consumers demand more data-intensive applications like video and augmented reality and artificial intelligence. Mobile broadband download speeds have increased by 150% in just 4 years. Upload speeds are lagging, but […]

This week there was some controversy in Nigeria when the Nigerian Communications Commission (NCC) instructed the telco’s to withdraw a 10% price increase. According to the NCC, the price increase was not fully authorised. The proposed price increase of 10% comes after a proposal from the Association of Licensed Telecom Operators (ALTON) that a 40% price increase was justified. Clearly, the telco’s are preparing the public and the regulators for a price increase. Let’s investigate what the current status of prices and profitability is in Nigeria, especially compared to other countries in the region and across the continent. The data […]

In August, the weekly newsletter was about why there is no common standard for mobile coverage maps and the result was a wide range in accuracy, with operator coverage maps generally unusable. This week is a follow-up and compares one source for mobile coverage maps, Open Cell ID, versus actual coverage. RIS designs and operates Universal Access and Service (UAS) portals for Namibia and Malawi, so we have access to accurate population and geographic coverage maps. The table below compares geographic and population coverage. In Malawi, Open Cell ID geographic coverage misses 45% of the geographic area that is actually […]

In February 2022, the four largest ISPs (or MNOs) in Europe wrote an open letter demanding that Content and Application Providers (CAPs) pay for access to their networks. We’ve covered this debate from a variety of different angles in previous newsletters, starting all the way back in April 2022: MNO EBITDA margins; the connectivity segment’s growth compared to other segments of the value chain; the cause of stagnant MNO revenues; the impact of Sending Party Pays in South Korea; the role of data caps in limiting revenue growth; the cost of capital and return on equity for all segments of […]

Last week’s newsletter looked at growth in the connectivity segment of the value chain globally. This week’s newsletter looks at some specific examples and trends. In terms of global EBITDA margin, the connectivity segment sits at 30%, which is considerably higher than anywhere else along the value chain. The table shows examples from some Asia Pacific (APAC) countries and there is a wide variation. Indonesia and Thailand have incredible EBITDA margins of around 50%. South Korea is generally improving and moving towards the 30% global average. Australia sits at just about the average of 30%, though there are some worrying […]