mobile traffic volumes decline as a result of increased tariffs

QUARTERLY SECTOR STATISTICS REPORT
By the end of the quarter under review (Quarter 2 of 2011/12 i.e. the period from 1st October to 31st December 2011), there were a total of 28.08 million mobile subscriptions in the country up from 26.49 million subscriptions recorded during the previous quarter. This represents an increase of 5.99 per cent during the period. Pre-paid subscriptions grew by 6.03 per cent to record 27.84 million subscriptions while post-paid subscriptions grew by 1.31 per cent to record 236,436 subscriptions during the period. Mobile penetration was recorded as 71.3 per cent during the period up from 67.2 per cent recorded during the previous period.
The main fixed lines (fixed terrestrial lines and fixed wireless) subscriptions recorded a downward trend of 20.24 per cent during the period, from 355,493 fixed lines during the previous period to 283,546 during the quarter under review. This represents a fixed-line tele-density of 0.72 per cent from 0.90 per cent recorded during the previous period.
Total local mobile traffic declined to 6.70 billion minutes from 7.09 billion minutes recorded during the previous period, representing a decrease of 5.58 per cent. This was as a result of increase in tariffs by a key mobile operator that led to the reduction in local mobile traffic.
Similarly, Minutes of Use (MoU) per subscriber per month declined to 79.9 down from 89.3 recorded in the previous period, registering a decrease of 10.53 per cent. In addition, the number of SMS per subscriber per month declined by 38.52 per cent from 17.42 SMS during the previous period to 10.71 SMS during the period under review.
Meanwhile, Internet service continued to rise steadily during the quarter to stand at 6,152,687 Internet subscriptions from 5,422,009 during the previous period, representing a 13.48 per cent increase. Likewise, the estimated number of Internet users rose by 21.55 per cent from 14.30 million users in the previous period to 17.38 million during the period under review.
Broadband1 subscriptions increased to 131,829 from 126,589 recorded during the previous period. This represents an increase of 4.14 per cent. Broadband subscriptions represented 2.14 per cent of the total Internet subscriptions.
1 In Kenya broadband is defined as speeds greater than or equal to 256Kbps in one or both directions.
International connectivity bandwidth increased by 3.15 per cent from 51,319.35 Mbps in the previous period to 52,938 Mbps during the period under review. The total available bandwidth in the country was recorded as 5,261,919Mbps during the period under review. - 7 -

In the postal sector, the total local letters sent declined by 4.75 per cent from 20.57 million letters sent during the previous period to 19.59 million letters sent during the period under review. International incoming letters were recorded as 80,217 from 100,348 recorded during the period under review. Similarly international outgoing letters declined by 17.96 per cent from 2.73 million recorded during the previous period to 2.24 million recorded during the period under review. For more information:
http://www.cck.go.ke/resc/downloads/SECTOR_STATISTICS_REPORT_Q2_2011-12.pdf

Kenya steps up war on money laundering

MONEY LAUNDERING
Central bank of Kenyan has increased its surveillance on money laundering by the establishment of the financial reporting center. The center will be charged with the responsibility of operationalizing the Proceeds of Crime and Anti-Money Laundering Act.
The immediate operationalization of the financial reporting center was approved by the anti-money laundering advisory board last week and will be based at the ministry of finance and central bank offices with officers being seconded from the two institutions on an interim basis. The financial reporting center established under the Proceeds of Crime and Anti-Money Laundering Act 2009 will as priority operationalize the Act meant to prevent the concealment of large profits from drug trafficking and other organised crime. The centre will also analyze reports on suspicious transactions that may be associated with money laundering activities and forward them to appropriate law enforcing agencies for prosecution where fitting. The center will also be expected to come up with anti-money laundering policies in consultation with the board be fitting others in developed countries such as the US Patriot Act and the UK anti-money laundering & counter terrorist finance policy. The operationalization of the financial reporting center comes more than 2 years after parliament passed the Act after several attempts that faced hurdles from MPs who saw it as a move to reintroduce the anti-terrorism Bill to parliament through the back door. Kenya has been a victim of money laundering in the recent past with the warrants of arrest issued last year on former Finance minister Chris Okemo and former Kenya Power MD Samuel Gichuru for alleged involvement in money-laundering in a small island of Jersey. Transparency international is also on record saying that over 700 billion shillings has been stashed abroad by a number of Kenyans in foreign accounts proceeds from corruption, drugs and other criminal activities. And so as the center comes into place it has its work well cut out.

Government to improve efficiency through ICT

The Government is refocusing its formulation of policy on the ICT sector to enable increased internal efficiency the Ministry of Information has said.

Speaking at the Connected 2012 conference Permanent Secretary in the Ministry of Information Dr. Bitange Ndemo noted that the government would save up to $1 billion through effective processes in government ministries such as the judiciary, procurement and the ministry of lands.

He also said that the government will increase the role played by e-government especially in ensuring that the Kenyan citizen can better access information especially as the devolution to county government starts.

"Effective application of e-government will lead to savings of up to $I billion with top of the list savings expected from the Judiciary where 80% of total collections from fines are lost." Information PS Bitange Ndemo Said.

Kenya ICT board Chairperson Catherine Ngahu noted that with the government having been put the necessary infrastructure in place it was time to evaluate whether Kenyans have become more knowledgeable and thereby more competitive in the business environment.

She challenged the private sector to focus their innovations in the industry to creations that will better push the government to implement new policies.

"Technology intended for government must have policy implications." Kenya ICT Board Chairperson, Catherine Ngahu said.

The connected 2012 conference has the underlying theme of ‘Knowledge and Beyond' and has attracted stakeholders in the ICT industry from the region.

EADB invests in regional projects worth Ksh20 billion

Bank seeks to fast-track regional integration by supporting key sectors

EADB, which increased its support for key projects in energy, real estate, transport and agriculture last year, is seeking to scale up development finance, support and advisory services to the East African region. The Bank’s strategy for 2011 to 2015 focuses on projects and programmes to enhance food security, education and skills development, health, trade and infrastructure through direct lending to projects and programme loans to sovereigns. The Bank aims to support the real economy throughout the region, as it has done since inception.
The decision to increase funding to key sectors and projects in the region was reached at the Bank’s 43rd Governing Council meeting attended by finance ministers from the Member States last week.
“The Governing Council adopted the Bank’s annual report for 2011 which shows that the Bank approved investments worth Ksh4.2 billion between July and December 2011 (US$ 50.8 million) spread across the key economic sectors of the East African region. This translates to a total project value of Ksh20.7 billion (US$ 250 million),” EADB Director General Vivienne Yeda Apopo said.
Ms. Yeda said EADB was consolidating its position as the leading development finance institution in East Africa. “As the key development finance institution of the region we will continue to support the development and integration aspirations of the East African Community,” explained Ms. Yeda.
EADB has also announced a positive trend in profitability as well as improvement in asset quality for the third consecutive year. The Bank’s net profit increased by more than 200% from USD 2.2 million in 2010 to USD 6.7 million in 2011. The Bank’s profit in 2009 was USD 1.85 million. The results were approved by the Governing Council in Nairobi last week.
Ms. Yeda added that growing investor interest in Africa is vital for the region’s economic prospects and EADB’s consolidation efforts.
“This renewed interest in Africa, and East Africa in particular, allowed EADB to achieve a record result with an annual business volume in 2011 more than doubling from its 2010 level. We are especially proud to report that we have commenced our sovereign lending portfolio. The nature of a number of projects that we supported in 2011, particularly those relating to infrastructure, have necessitated an increase in the size of loans to individual projects,” said Yeda.
She however said that EADB will still provide tailor-made solutions especially for smaller enterprises for which access to finance remains difficult. The Governing Council underscored its support to the EADB in its efforts to mobilise adequate resources both from within the region and internationally to fund the growth in development interventions as envisaged in the strategic plan.
The Bank will continue to support capital markets through bond issuances which it is proud to have pioneered in the region, as well as intermediate savings from the international markets so as to contribute towards the savings gap in the region.
The Members who attended the 43rd Governing Council Meeting were its Chairman John Rwangombwa, Minister for Finance and Economic Planning, Rwanda; Maria Kiwanuka Minister for Finance, Planning and Economic Development, Uganda and Pereira Ame Silima, Deputy Minister for Finance, Tanzania.
EADB promotes Sustainable Socio-Economic Development in East Africa by Providing Development Finance, Support and Advisory Services. It has supported sustainable Socio- Economic Development in the East African Region for the last 45 years.
Among the products and services EADB provides include term loans, trade finance facilities, short-term working capital facilities, asset leasing facilities, equity investments, acting as a management agency for donor funds, loan guarantees, real estate and property development loans.
The consolidation process of the Bank is elaborated in the EADB’s five-year strategic plan 2011 to 2015. EADB strategic focus for the next three years include support of regional integration efforts; food security; environment and natural resource management; skills development; infrastructural development and resource mobilization for the region.

Submarine cable cut. Accident or Sabotage?

It is now emerging that the slow connection in internet connection for subscribers of companies depending on the TEAMS cable is as a result of a cable cut. A statement sent by Safaricom limited says a major cut has occurred on the TEAMS cable at the coast, cutting a crucial link for the bulk of internet and international voice traffic in the region.

The cut that was precipitated by a ship off the coast of Mombasa resulted to complete loss of traffic last Saturday for a number of subscribers of various companies including Safaricom, Jamii Telecom, Wananchi, Essar, Kenya Data Networks, Access Kenya, Telkom Orange and Bandwidth & Cloud Services as well as the government of Kenya. The cable that is co owned by the government of Kenya through a public private partnership with a number of local companies accounting for 85% shareholding was installed at a cost of 130 million dollars or approximately 10 billion shillings. The coble connects the Kenyan coast to Fujairah off Sri Lankan coast. The cut that occurred some 4.5 kilometers off the Kenyan coast forced many companies to re-route their data through SEACOM and satellite with recovery expected to take hours and repair to take close to three weeks. However there is a feeling of economic sabotage with reports that a ship illegally dropped its anchor at the point where both the Eastern African Submarine Cable System (EASSY) and The East African Marine System cables are situated and dragged them leading to the cut. The undersea cables that are about 650 feet below link East Africa to Middle East and Europe have also affected electronic communications from Djibouti to Djibouti. Questions will also be raised on the frequency of the cuts being that the TEAMS cable is the fourth cable to be severed in the region in the last two weeks. The Teams cable had been rerouting data from three other cables severed 10 days ago in the Red Sea between Djibouti and the Middle East. Even with all ideas sprouting on what could have led to the cut that has affected business in the entire regions the Kenyan parliament is yet to legislate a law on economic sabotage to tackle the numerous cable cuts.

Africa aviation association condemns EU carbon taxes

The African airlines association has condemned EU carbon tax
on airlines joining ranks with countries like Russia, China and India.
According to the association secretary general Elijah Chingosho the
levies were illegal as it goes against the 1944 Chicago convection
which empowers the international civil aviation organization (ICAO) to
regulate the industry. He also fears that EU’s move could spark trade
wars as various blocs impose their charges.
The African aviation association protest is perhaps the single unitary
dissent from Africa as a continent after individual countries South
Africa and Tanzania raised fingers over the move by the European
Union. The Emissions Trading Scheme (ETS) that creates permits for
carbon emissions forces Airlines that exceed their allowances to buy
extra permits, as an incentive to airlines to pollute less. However
the levies that came into effect on January 1st have been condemned by
critics who say the EU has no right to impose taxes on flights to or
from destination outside Europe even after the European court of
Justice ruled that the EU tax on carbon dioxide pollution from
aircraft was legal. many fear that the move could lead to
increased taxes on aircraft as other blocs levy taxes on aircraft to
counter the EU’s move that is expected to increase cost for the sector
by between 1.5 and 2 billion Euros annually. For Africa the
move could be a big blow to the young industry as the aviation sector
internally tries to negotiate with governments to reduce taxes
especially on fuel. Statistics show that only less than 10% of the
continent’s population have used an airplane although the continent.
has the potential to grow at over 7.5% annually over the next 10 years
They were speaking ahead of the first African aviation
suppliers conference to be held in Nairobi next month bringing
together players in the aviation sector.

Bata expands to Ethiopia & Burundi

Shoe maker Bata is eyeing to expand to the region with its target being Ethiopia and Burundi. According to Bata managing director Nasir Rafiq the expansion is estimated to cost 350 million shillings. Bata will however not be eyeing South Sudan at the moment as it awaits various administration and policy measures to take form.

Speaking during the launch of Bata miss world Kenya collection East and central Africa’s largest shoe manufacturer said it will continue to focus its operations in the COMESA region with Kenya remaining as its manufacturing hub and operations center. And after expanding to Rwanda last year the manufacturer is in 2012 eyeing 2 other markets Ethiopia and Burundi to increase sales that stood at 30 million pairs in 2011. But with the infrastructure linking Kenya and Ethiopia in bad state Bata hopes the upgrading works will be through on time.Bata also says it will be expanding to every county with focus on the North rift towns and North eastern. Chief guest at the Launch Vice President Kalonzo Musyoka said the government will continue to provide the right environment for investors especially incentives that will open up the remote parts of the country. Bata currently employs over 2500 employees with the expansion expected to increase jobs especially for locals with the versatility and expertise in the sector. Bata miss world collection encompasses shoe variety for both the average citizen to the stylish executive collection to be worn for offices and other formal functions.