of the Telecommunications market
by Press Office
The expectations surrounding SEACOM
and TEAMS continue, but the reality
is starting to hit the market that
significant change is going
to take some time to emerge.
Figures from the Communications
Commission of Kenya (CCK) show that
the total number of internet subscribers
in Kenya, including corporate subscribers
to high capacity data services,
mobile internet subscribers and
broadband and dial up connections,
was over 1.8mn at the end of June 2009.
It was only after that that the
new international connections started
to come online, so it remains to be
seen whether it has had
a marked effect on the number of subscribers.
Price was always the key issue,
and the cost to consumers
of internet services has not
Wholesale data providers, notably
Kenya Data Networks, have reduced
their charges considerably, but there
are a number of factors that still
keep consumer prices high.
There has been some speculation
that service providers have been tied
into signing large long-term contracts
for more data than they currently need
and that this has meant that
the reduction in cost per unit
of bandwidth has not been felt.
BMI suspects that the fact that
other significant overhead costs
apart from the cost of
still remain, and it will only be
as services providers can
take better advantage of
economies of scale that
prices will really start to drop.
On the mobile front, Kenya is still
an exciting market, although
the first half of 2009 has
overall seen disappointing growth,
and this has led BMI
to downgrade our
mobile forecasts a little.
After a very poor first quarter,
growth in mobile subscriptions
did pick up in the second quarter,
but the dip will certainly have
had an effect on growth for
the year as a whole.
We do expect the pick-up in
the second quarter to be
continued into the third and fourth.
On the regulatory side,
Kenya's mobile market is looking
at some considerable
upheaval on the horizon.
The CCK is trying to introduce
tough new price regulations
that will see the operators having
to notify the regulator
in plenty of time when they want
to change a tariff and will put
a stop to long-running promotions.
The new measures were originally
to be put into place before
the end of Q309, but following
a request for more time
from the operators, it looks like
it will take a little longer
for the changes to be put in place.
Report Q1 2010: http://www.companies
Tel: +44 203 086 8600
Sent from Kigali, Rwanda
The central bank of Britain, a country attracting
the attention of investors seeking higher
interest rates on the nation's debt.
Gordon Brown, the British prime minister,
may not view the country's deficit as
a top priority, an analyst says.
Leon Neal/Agence France-Presse — Getty Images
LANDON THOMAS Jr.
LONDON — The bond vigilantes are back.
But this time they are roaming mostly
through Europe rather than
the United States — at least for now.
Their mission: to force governments to cut
budget deficits that have ballooned
in the wake of the financial crisis.
As big investors in the credit markets,
activist bond traders developed
a fearsome reputation in the early 1990s
by pushing up yields on Treasuries
in order to force the government
to tame large deficits.
Their most famous target was
a newly elected president, Bill Clinton,
whom they pressured to
abandon campaign promises of tax cuts.
Today, the bond market posse has
set its sights on Europe — particularly
Britain and Greece — where stagnant
economies and high levels of
government spending have led
to the highest budget deficits in the region.
Although the left-leaning governments
in both countries are struggling
to show investors that they have
a workable plan to reduce
deficits — which now average around
13 percent of gross domestic
product — bond traders are
increasingly demanding higher
interest rates to reflect the rising risks.
Bond traders last week pushed
the spreads between Greek 10-year bonds
and their benchmark German
counterparts — a measure
of investor confidence in
the country — to highs of 250 basis points
after the nation's credit rating
was downgraded, raising concerns
over Greece's ability to service
its enormous debt.
In Britain, where the nation's economy
and finances have fallen so
sharply that investors fear a possible
downgrade of the country's triple-A rating,
bond traders are also taking
a hard line.
Last week, yields on gilts were
pushed to their highest levels
since the depths of the financial crisis,
after the Labour Party issued
a preliminary budget report
that skimped on details
of spending cuts.
"There is a clear drop in confidence
on the part of bond investors,"
said Mark Schofield, a fixed-income
strategist at Citigroup in London.
"I think it is all beginning to unravel."
The power of the bond trader to
influence governments once prompted
James Carville, Mr. Clinton's political
strategist at the time, to say that
he wished to be reincarnated
as one because "you can
Mr. Clinton may not have been
intimidated, but he did heed
the advice of Robert Rubin, who joined
the administration from his post
at the top of Goldman Sachs,
that a policy of budgetary restraint
would keep the bond market happy
and interest rates on
United States government bonds low.
Since then, the vigilantes have been
largely in abeyance: As the global
economy boomed, public sector
deficits were not a concern for investors.
All that changed rapidly with
the onset of the credit crisis last year.
Bond traders surfed the global
liquidity wave, buying up government
debt all over the world in the view that,
just as most big banks were
too big to fail, so were
sovereign economies, no matter how
crushing their fiscal picture.
But Dubai World's recent decision
to delay payment on its debt has
brought the crisis to reality
for complacent bondholders.
They have begun to demand that
governments with large budget gaps
start to pay higher interest rates
on their bonds to reflect
rising sovereign risk — a development
that will lead to higher
borrowing costs in countries
like Britain, Greece, Ireland and Spain.
The United States and Japan also
face unusually high debt levels,
deepened by huge stimulus programs.
For the time being, investors are
still willing to lend to them
at generous rates.
But bondholders are running out
of patience as the finances of
even the wealthiest nations spiral downward.
As bond investors become
more impatient, some European
countries have taken
aggressive fiscal action.
In Ireland, the government this month
presented the most severe
budget in the nation's history,
largely to prove to wary bond investors
that it was serious
about cutting its own deficit.
"There is a greater market focus
now on who the fiscally vulnerable
countries are," said Michael Saunders,
the head of European
economics at Citigroup.
Britain falls into that category, he said,
because the British Labour government,
led by Prime Minister Gordon Brown,
is facing a difficult election battle
and appears more concerned
with pleasing voters than investors.
That could lead to a bond market
rout if gilt holders, a large proportion
of them foreign, come to the conclusion
that cutting the deficit is
not a top priority, he said.
In the euro zone, the European
Central Bank's interest in keeping
inflation low means that it is likely
to maintain a stable euro, leaving
smaller European economies with
no opportunity for a cheaper
currency to help
generate growth from exports.
As a result, governments in Portugal,
Ireland, Greece and Spain have had
to turn to increasingly skeptical bond
markets to raise funds while waiting
for their economies to recover
through the far more painful process
of squeezing wages
and shedding jobs
to restore competitiveness.
A recent report from
Standard Chartered even suggested
that weak euro members like Greece
and Ireland might reconsider
their ties to the union if investors
pulled the plug and stopped
refinancing their countries' debts.
"The idea that currency unions
can't break up is rubbish," said
Tim Congdon, an economist
and professed euro skeptic who
has advised Conservative
governments in Britain.
"The critical issue is whether
governments can repay their debts
in new currencies
or euros once they leave."
If they can pay back bond investors
in new and cheaper currencies,
then it is in the interests of countries
like Greece to go out
on their own, Mr. Congdon said.
But with other countries seeking
the shelter of the euro and leaders
like Angela Merkel of Germany hinting
that the big powers would come
to the rescue of Greece and other
distressed countries if necessary,
most economists argue that
the euro zone is unlikely to crack.
Still, that has not stopped
bond investors from talking up
a new divergence trade
in Europe — the flip side to
the convergence trade earlier
this decade, during which Irish,
Greek and Spanish government bonds
were bought on the theory that
a grand economic harmony
would sweep Europe.
Sent from Kigali, Rwanda
| KT Corp., Korea's top fixed-line operator and |
internet service provider, said Sunday
it has launched wireless Internet
network service in Rwanda,
according to the Yonhap News.
The communications network service for
Internet access, dubbed "WiBro," cost
$7.7 million to build and links major government
agencies in the capital city of Kigali, the KT noted.
KT said it hopes the service, which was
launched last week in the African nation,
will serve as a stepping-stone in
the company's bid to further
tap the African market.
Samsung Electronics Co., and seven other
companies joined the project, said KT,
which won the deal last year.
WiBro, one of the world's major third-generation
wireless Internet standards, is a
homegrown wireless Internet access
technology developed by KT that enables
broadband-like Web connectivity even
when a user is in motion.
The technology competes with
A Massachusetts grand jury has indicted
a 98-year-old woman, accused of strangling
her 100-year-old nursing home roommate,
on a second-degree murder charge.
Prosecutors say Laura Lundquist killed
centenarian Elizabeth Barrow, a resident
of Brandon Woods Nursing Home in Dartmouth,
after the two women had an argument
over a table Lundquist had placed
at the foot of Barrow's bed.
Barrow was found dead September 24 with
a plastic shopping bag tied loosely around her head,
according the Bristol County district
An autopsy indicated Barrow had been strangled.
Barrow complained that the table obstructed
her path to the bathroom, authorities said.
When a nurse's aide moved it, Lundquist
punched the aide and grumbled that
her roommate "might as well have
the whole room," prosecutors said.
District Attorney C. Samuel Sutter said
Barrow repeatedly complained that
Lundquist was making her life "a living hell"
in the weeks leading up to the woman's death, a
nd that Lundquist remarked that
she would outlive her roommate.
A nursing home spokesman said the facility twice
presented Barrow with the chance to change
either rooms or roommates, but
she declined each time.
He compared the pair to "sisters," saying
they took "daily walks together ...
ate lunch together every day,
and were heard at night saying,
'Good night, I love you,' to each other."
Lundquist's attorney, Carl Levin, contends
his client was not involved
in Barrow's death, saying,
"We maintain her innocence."
A superior court judge granted a motion
to send Lundquist to a state hospital
for a competency evaluation.
An arraignment will be held
only if Lundquist is found
competent to stand trial.
Sent from Kigali, Rwanda