Equatorial Congo Airlines (ECair), which filed for bankruptcy in 2016, has signed a memorandum of understanding with South African company Allegiance ... Capital to restart its operations. Who is this partner? Where will the capital come from? Will the Congolese state’s support be enough?
Since the start of the pandemic, Boomplay, a music streaming app owned by Shenzhen-based mobile phone manufacturer Transsion Holdings, has given away an estimated $1,610,000 of free data to listeners to keep them engaged.
Sub-saharan Africa is home to the world’s most expensive data prices, with Equatorial Guinea closing in at an average $49.67 for 1GB of mobile data. Amid COVID-19, citizens around the world have lost jobs and are more cash crunched than ever. Spending money on streaming is a low priority for many.
Reducing direct data costs to consumers may be the recipe for success in Africa’s music streaming market.
Kenya-born music streaming app Mdundo operates with a similar business model. Mudundo was launched in 2013 with the goal of providing music streaming services across Africa.
Though the app does not directly subsidise data costs, it does allow users to download tracks for free offering the flexibility to connect to open Wifi networks in cafes and restaurants instead of using precious purchased data bundles. China-funded data compression app Opera Mini has recognized Mdundo’s potential, partnering with the app in 2019 and offering users the ability to share downloaded songs for free via Opera Mini’s file sharing feature at no additional data costs.
But as music streaming platforms expand across Africa, and attempt to reduce data costs as they go, they’ll have to contend with the continent’s creatives.
Music streaming platforms are being called out for underpaying artists. In October 2020, US-based Union of Musicians, launched “Justice at Spotify”calling for Spotify to pay artists a minimum $.01 per stream. Currently, artists are paid an average $.00038 a stream.
“Making money from those streaming platforms comes hand in hand with the level of popularity an artist has. You have to have certain numbers on your socials to expect to make real money from the streaming sites. But it’s definitely great for exposure to have African music on international streaming sites” said Bananasoverdose, a popular female Somali rapper featured on Apple Music, Spotify and Boomplay, in an interview.
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The thirst for music from Africa’s artists provides a new opportunity. Hopefully Africa’s independent music artists will leverage their rising global popularity to receive more compensation.
Bananasoverdose believes that the key is “talent, consistency in releasing well-crafted content, and authenticity”.
“That will take any artist as far as the stars. Staying original while using marketing tools wisely will help an artist get opportunities too and of course knowing the right people in the industry and having connections. Music streaming apps are a bonus for exposure but it’s not something I’d relay on if I wasn’t a good artist” she said.
In March, Boomplay struck a deal with Universal Music Group (UMG), extending the global music corporation’s music catalog from 7 to 47 countries in Africa. Interestingly enough, Chinese tech conglomerate, Tencent, owns a majority stake in UMG. Boomplay’s music catalogue now stands at a whopping 50 million tracks, including music from both African and non-African artists.
What’s the Deal With Ethio Telecom?
When Ethiopia opened competitive bids for new telecoms operating licenses last November some might have assumed that China-born telecoms companies would jump at the opportunity. But, since opening the application process for the tender back in 2020, only virtual network operator Snail Mobile and Sharing Mobile have submitted applications.
But China’s telecoms companies will be involved in Ethiopia’s telecoms industry whether the tender is won or not .
In April, Ethio Telecom awarded Shenzhen-based telecommunications equipment and consumer electronics giant, Huawei, the business to expand its 4G service. ZTE, a Chinese partially state-owned tech company, also helped expand 4G service to six major Ethiopian cities this year.
According to Alexander Demissie, founding director of China Africa Advisory, Ethiopia has been working with Chinese telecoms companies for a long time.
“…Chinese players know that they are an advantage vis a vis other new incomers…it’s not all just about the future capability is also what is already existing” said Demissie, in an interview.
Whoever wins the tender will compete directly with Ethio Telecom, and the state owned monopoly has been preparing. They’ve made it clear that whoever wins the bid will have to bring their own equipment with them. But, this will take time to set up. In the meantime they’ll have to rent equipment from Ethio Telecom which Demisse says has been part of the plan.
“The idea is Ethio Telecom did a restructuring last year, where they have also created infrastructure departments. The idea here is that the others should rent the infrastructure from them at the beginning. The two selected licensees will start building their own infrastructure when they come, but it takes time and a lot of investment. So as long as that happens, they need to come to terms with Ethio Telecom” said Demisse.
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Last week’s big news was that South Africa’s MTN and Vodafone have placed bids for the Ethio Telecom tender. In fact, South Africa’s MTN has worked closely with Huawei in the past to expand connectivity in South Africa. They’re also cooperating with China’s Silk Road Fund, a state owned investment fund set up in 2014 with the goal of increasing investment in Belt and Road countries, to participate in the bid for the Ethiopian telecommunications license.
Vodafone, on the other hand, is being supported by the U.S.’s International Development Finance Corporation (IFC), which spent $300 million of African data centers in 2020. But Kenya’s Safaricom, of which the British-owned telecoms company owns a 40% stake, will work with its majority shareholder Vodacom as the lead partner for the bid. Huawei is one of Safaricom’s most important Original Equipment Manufacturers, providing software management for its mobile money service, M-PESA. Safaricom also announced that they’d selected Huawei to roll out its 5G network in March.
The liberalization of Ethiopia’s formerly closed telecoms market is a part of a series of reform plans announced by Ethiopia’s Prime Minister Abiy Ahmed when he took office back in 2018. This process of opening state owned industries to private investment over time is called gradualism. It’s a method of reform that China used to open up its economy in the 90s.
What we’re seeing right now is an interesting competition for the future of Ethiopia’s, potentially, lucrative, telecoms industry by two major global powers. No matter who wins the tender, they’ll be dealing with the difficult task of growing a telecoms industry in a changing market. Though underreported, Africa’s second most populous country has been at war with its Tigray region since 2020.
Smartphones and India’s Second Wave of COVID-19 Infections
In response to a rapid surge in COVID19 cases, China’s Sichuan Airlines has suspended all shipments to India for 15 days, starting on April 19th. Prior to the suspension, the state-owned airline was the primary mode of shipment for Chinese phone brands like Oppo, Vivo, Xiaomi. India is one of the biggest markets for Chinese handsets. Xiaomi, identified by its bright orange logo, was only founded in 2010, but already leads India’s smartphone shipments. Its founder, Lei Jun, also gave us an iconic meme during his 2015 trip to India that made waves on Chinese social media.
Sichuan Airlines’ announcement had ripple effects on India’s economy. Agents and freight forwarders were left without much needed oxygen concentrators from China. And, according to Times of India, Chinese manufacturers and freight forwarders also began jacking up their prices over 20 percent.
China’s handset makers are now scrambling to get shipments going to one of their most important markets. The depreciating rupee was already forcing smartphone manufacturers to increase prices 10-15%, as ET reports. Adding to the sticky situation, the cost of components for smartphones is also on the rise. Logistical difficulties and work stoppages caused by the COVID19 pandemic have also led to a global chip shortage, a component essential to the functionality of smartphones, computers and electric vehicles. Because of this, the cost of smartphones may continue to rise, making it hard for China’s affordable handsets to stay…affordable.
Alexandria Williams is a Nairobi-based journalist from the U.S. who has studied and reported from China for several years. Her writing focuses on technology in China and follows the future of China’s tech giants in Africa. Follow her on Twitter: @alexandriasahai and instagram: lanlanivesinchina.
This article is published in partnership with The China Africa Project
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