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Africa Defeats World’s Biggest Mobile Carriers



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  • Africa Defeats World’s Biggest Mobile Carriers

Back when African countries were auctioning off mobile licenses by the boatload to serve the region’s young, tech-savvy population, investing in the continent’s fast-growing economies seemed like a no-brainer. Some of the world’s biggest wireless carriers rushed in.

Now they’re wondering if they made a mistake. Increasing government and regulatory scrutiny, as well as a lack of expansion opportunities in sub-Saharan Africa, are making it harder for operators such as Vodafone Group Plc, Orange SA and Bharti Airtel Ltd. to grow. Their choice: Pull back or double down.

Two companies beating at least a partial retreat are Millicom International Cellular SA, which disposed of its Senegal and Democratic Republic of Congo units, and India’s Airtel, which sold businesses in Burkina Faso and Sierra Leone to Orange earlier this year. Reducing its exposure to Kenya, Vodafone transferred most of its $3.6 billion stake in Nairobi-based Safaricom Ltd. to majority-owned South African unit Vodacom Group Ltd. in May, and may pare further. That leaves Vodafone Ghana as the U.K. company’s sole own-branded African operation.

“At this point it is becoming clear who has a chance of making it in Africa and who does not, and it essentially boils down to scale, as well as government sway,” said Baha Makarem, an analyst at Arqaam Capital. “It’s just a question of who is ready to weather the storm.”

The shift in sentiment comes as governments across sub-Saharan Africa are losing favor with investors. The fall in commodity prices has reduced tax revenue in many countries, and average economic growth slumped to 1.4 percent last year from 3.4 percent in 2015, according to the International Monetary Fund. That’s encouraged lawmakers in countries including Tanzania and Ghana to look to international companies for revenue opportunities—both have ordered foreign wireless carriers to cede shares to local investors.

“The regulatory challenges are top of our mind at all times,” MTN Group Ltd. Chairman Phuthuma Nhleko told shareholders at the annual meeting of Africa’s biggest wireless carrier on May 25. “It’s just part of the environment in which we operate.”

Nhleko has firsthand experience with that. A Nigerian watchdog fined the carrier $5.2 billion in 2015 for missing a deadline to disconnect unregistered subscribers, leading to a slump in the share price that’s yet to turn around. The penalty was reduced to $1 billion after months of negotiations and Nhleko has since overhauled management and corporate governance. Even so, MTN was fined $8.5 million in Rwanda in May for non-compliance with its license obligations. The company hasn’t yet delivered on a promise to list its Nigerian unit in Lagos.

Vodacom, 70 percent owned by Vodafone, has complied with Tanzania’s demand to sell shares on the Dar es Salaam stock exchange. It had to delay the listing when a surge in demand from retail investors slowed the processing of applications from outside the country.

IPOs are the only way to force the wireless carriers to share their profits with local investors in the East African country, Tanzanian President John Magufuli said last month, adding that licenses could be withdrawn if they refuse the order.

“It is not enough to just subject the mobile-phone companies to fines and allow them to continue minting billions of money in profits,” the local Daily News quoted him as saying.

Not everyone is down on Africa, where GSMA Intelligence expects mobile revenue will reach $43 billion in 2020. Orange, France’s market leader, in February called Africa a priority region and has focused most of its investment in French-speaking markets such as Cameroon and Ivory Coast.
That’s partly to offset stagnating growth in Europe and to take advantage of a younger population demanding faster and cheaper data, according to Bruno Mettling, the Paris-based company’s head of operations on the continent. A lack of obsolete infrastructure that would need to be removed or upgraded is also underlying the business case, he said.

Some operators “are withdrawing from Africa in the face of the enormous investments to be made—3G, 4G, but also in the fiber to connect the antennas to each other,” Mettling said. “At Orange, we invest an average of 1 billion euros ($1.1 billion) in Africa each year.”

Areas of expansion for Orange include mobile banking, where Nairobi-based Safaricom blazed a trail with its M-Pesa product in Kenya. Orange Money reported a 74 percent increase in customers, to more than 30 million, in the first quarter, and plans to extend the service into its home market this year. Orange’s francophone markets have so far stopped short of ordering share sales to local investors.

Vodacom, based in Johannesburg, is another considering further expansion following the Safaricom deal. The tougher market and increasing willingness of some rivals to sell may have brought down prices, Chief Executive Officer Shameel Joosub said at the company’s results presentation in May.

“The days of you going in with a new greenfield license are gone,” Joosub said. The price of potential acquisition targets is, however, “becoming more reasonable,” and there “are not that many buyers.”

The first wave of second-generation digital mobile licenses in Africa started in the late 1990s, with Nigeria being one of the last countries to issue its first permit in 2001. While those markets have since been growing—more than half the continent’s population is seen owning a smartphone by 2020—the only country yet to auction licenses is Ethiopia.

“Africa is a market of growth, but also a very difficult environment to operate,” said Dobek Pater, managing director of Pretoria-based Africa Analysis. “Costs of operation are often high, disposable income levels of large segments of the society low, and the regulatory environment not always predictable. Only companies with “increasing economies of scale will succeed.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq,, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Behind Closed Doors: Microsoft’s Bid to Make Bing Apple’s Default Search Engine



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Insiders have disclosed that Microsoft Corp. engaged in discussions with Apple Inc. around 2020 about potentially selling its Bing search engine.

The proposed deal aimed to replace Google as the default search engine on Apple devices, particularly iPhones.

People familiar with the matter, who chose to remain anonymous, disclosed that high-level executives from Microsoft held exploratory talks with Eddy Cue, Apple’s services chief, responsible for the existing search engine partnership with Google.

Despite these discussions, the deal never progressed beyond preliminary stages. This revelation has gained renewed attention in light of the ongoing U.S. Department of Justice antitrust trial against Google, in which Apple and Microsoft are actively involved. The Justice Department is using Apple’s arrangement with Google as evidence of Google’s search market dominance.

Apple’s Eddy Cue defended the collaboration during his trial testimony, asserting that Google was the superior search option, emphasizing the quality of Google’s technology.

Apple’s partnership with Google, initiated in 2002, had grown to become highly lucrative, earning Apple between $4 billion to $7 billion annually by 2020.

This financial aspect, coupled with concerns about Bing’s competitiveness, played pivotal roles in Apple’s ultimate decision not to acquire Bing.

While Bing was briefly used as the default search engine in some Apple features between 2013 and 2017, including Siri and Spotlight, Google ultimately remained the preferred choice. In court, it was revealed that Microsoft had considered a multi-billion-dollar investment in its relationship with Apple in 2016, but this attempt was unsuccessful.

Eddy Cue’s testimony underscored Apple’s belief that Google’s search technology was unmatched, signaling that Apple had no plans to develop its own search tool.

This differs from Apple’s approach in other areas, where it competes directly with Google in mapping software, voice assistants, and operating systems.

In retrospect, Apple’s dalliance with Bing serves as a fascinating chapter in the tech giants’ intricate web of partnerships and rivalries.

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iPhone 15 Pro and Pro Max Owners Complain of Overheating Issues



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Some of the first owners of Apple Inc.’s latest offerings, the iPhone 15 Pro and Pro Max, are feeling the heat – literally.

Reports are pouring in from frustrated customers who claim that their new devices are prone to overheating during usage and charging, casting a shadow over Apple’s flagship product.

Complaints have flooded Apple forums and social media platforms, with users expressing concern over the device becoming uncomfortably warm while gaming, making phone calls, or using FaceTime.

The issue appears to be exacerbated when the phone is plugged in for charging.

Apple’s technical support staff have been inundated with calls on the matter and have been directing customers to an older support article on managing hot or cold iPhones.

This notice suggests that overheating may occur during intensive app use, charging, or initial device setup.

Apple, headquartered in Cupertino, California, has remained tight-lipped regarding these complaints, leaving users speculating about the root cause of the issue.

As the iPhone accounts for a substantial portion of Apple’s revenue, any product flaws are scrutinized intensely. While some problems can be resolved through software updates, others may fade with time. Apple usually subjects its products to rigorous testing to catch potential pitfalls before mass production.

The overheating issue could be related to the iPhone setup process, which can be processor-intensive, particularly when re-downloading apps and data from iCloud.

Users have also suggested that certain background apps, such as Instagram or Uber, might exacerbate the problem.

Videos of users measuring the phone’s temperature with thermometers have surfaced online, with one user reporting, “iPhone 15 Pro Max gets really hot easily.”

However, it’s not a universal problem, as some users have reported no issues or found that using a protective case mitigated the heat.

This development follows recent complaints about the FineWoven material used in iPhone 15 cases, highlighting potential quality concerns with Apple’s latest product offerings.

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TikTok Faces Regulatory Storm in Indonesia as Minister Calls for E-commerce Split



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Teten Masduki, the Indonesian Minister of Cooperatives and Small and Medium Enterprises, has emerged as a vocal critic of the Chinese-owned social media giant TikTok.

Masduki’s relentless complaints about TikTok’s dominance in the Indonesian e-commerce market have set the stage for a seismic regulatory shift that could have far-reaching consequences.

Masduki, a former activist who once took on government corruption, has been disrupting official meetings to raise concerns about TikTok’s impact on local players. This groundswell of criticism has culminated in sweeping regulations that force TikTok to split payments from shopping in Indonesia, a move seen as a significant blow to TikTok’s e-commerce aspirations.

Under these new rules, social media companies in Indonesia are barred from handling direct payments for online purchases, effectively requiring TikTok to either create a separate app for payments or risk being shuttered in Indonesia entirely.

The regulations, stricter than anticipated, have already had a chilling effect on the e-commerce market, benefiting local champions like GoTo and Sea.

While TikTok has pushed back, arguing that the separation of social media and e-commerce hampers innovation, the Indonesian government remains firm in its stance, aiming to protect smaller enterprises and voters as elections loom on the horizon.

This clash underscores the challenges TikTok faces in its pursuit of e-commerce dominance and sets a precedent for other countries in the region. As TikTok’s meteoric rise in regional e-commerce continues, governments are increasingly assessing whether the platform benefits or harms domestic merchants.

For TikTok, the challenge lies in finding a solution that appeases authorities while allowing it to continue its growth. The repercussions of this battle in Indonesia could reverberate throughout Southeast Asia and beyond, shaping the future of social media-driven e-commerce.

In a rapidly evolving digital landscape, Teten Masduki’s bold stance against TikTok may just be the opening salvo in a much larger struggle for control of the e-commerce arena.

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