Since the start of the pandemic, Boomplay, a music streaming app owned by Shenzhen-based mobile phone maker Transsion Holdings, has distributed about $ 1,610,000 in free data to listeners to keep them engaged.
Sub-Saharan Africa is home to the highest data prices in the world, with Equatorial Guinea closing on average $ 49.67 for 1 GB of mobile data. In the midst of COVID-19, citizens around the world have lost their jobs and are strapped for cash more than ever. Spending money on streaming is not a priority for many.
Reducing direct data costs to consumers may be the recipe for success in the African music streaming market.
Music streaming application born in Kenya Mdundo operates with a similar business model. Mudundo was launched in 2013 with the aim of providing music streaming services across Africa.
While the app does not directly subsidize data costs, it does allow users to download tracks for free, providing the option to connect to open WiFi networks in cafes and restaurants instead of using valuable packets of data purchased. China-funded Opera Mini data compression app recognized Mdundo’s potential, partnering with the app in 2019 and giving users the option to share downloaded songs for free through the file sharing feature. from Opera Mini at no additional data charges.
But as music streaming platforms expand across Africa and try to cut data costs as they go, they will have to face the creatives of the continent.
Music streaming platforms are in demand for underpaid artists. In October 2020, the US-based Union of Musicians launched “Justice at Spotify” calling on Spotify to pay artists a minimum of $ 0.01 per stream. Currently, artists are paid an average of $ 0.0038 per broadcast.
“Making money with these streaming platforms goes hand in hand with the level of popularity of an artist. You need to have certain numbers on your social media to hope to make real money on streaming sites. But it’s really great to have African music on international streaming sites, ”Bananasoverdose, a popular Somali rapper featured on Apple Music, Spotify and Boomplay, said in an interview.
The thirst for music of African artists offers a new opportunity. Hopefully, independent music artists from Africa will take advantage of their growing worldwide popularity to receive more compensation.
Bananasoverdose believes that the key is “talent, consistency in posting well-crafted content and authenticity”.
“It will take any artist to the stars. Staying original while using marketing tools wisely will help an artist also get opportunities and of course get to know the right people in the industry and have connections. Music streaming apps are a bonus for exposure, but it’s not something I would take over if I wasn’t a good artist, ”she said.
In March, Boomplay struck a deal with Universal Music Group (UMG), expanding the global music company’s catalog of music from 7 to 47 countries in Africa. Interestingly, Chinese tech conglomerate Tencent owns a controlling stake in UMG. Boomplay’s music catalog now has 50 million tracks, including music from African and non-African artists.
What’s wrong with Ethio Telecom?
When Ethiopia put out tenders for new telecom operating licenses last November, some might have assumed that Chinese-born telecom companies would jump at the chance. But, since the opening of the application process for the call for tenders in 2020, only the virtual network operators Snail Mobile and Sharing Mobile have submitted applications.
But Chinese telecommunications companies will be involved in Ethiopia’s telecommunications industry whether the tender is won or not.
In April, Ethio Telecom awarded telecommunications equipment and consumer electronics giant Huawei, the company to expand its 4G service. ZTE, a partially state-owned Chinese 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 a long history of working with Chinese telecommunications companies.
“… Chinese players know they are an advantage over other newcomers… it’s not just a question of future capacity, it’s also what’s already there,” Demissie said in an interview.
Whoever wins the tender will be in direct competition with Ethio Telecom, and the state monopoly has been prepared. They made it clear that whoever wins the auction will have to bring their own equipment with them. But, it will take time to set up. In the meantime, they will have to rent equipment from Ethio Telecom, which Demisse said was part of the plan.
“The idea is that Ethio Telecom did a restructuring last year, where they also created infrastructure departments. The idea here is that the others should rent the infrastructure to them at the start. The two selected licensees will start building their own infrastructure as soon as they arrive, but this takes time and a lot of investment. So as long as that happens, they have to come to terms with Ethio Telecom, ”said Demisse.
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The big news last week was that South African companies MTN and Vodafone have submitted bids for Ethio Telecom’s tender. In fact, MTN of South Africa has worked closely with Huawei in the past to expand connectivity in South Africa. They are also cooperating with the Silk Road Fund of China, a public investment fund established in 2014 with the aim of increasing investment in Belt and Road countries, to participate in the bid for the license of Ethiopian telecommunications.
Vodafone, meanwhile, is backed by the United States’ International Development Finance Corporation (IFC), which spent $ 300 million on African data centers in 2020. But Kenya’s Safaricom, of which the British telecommunications company owns a 40% stake, will work with its majority shareholder Vodacom as the main partner of the offer. Huawei is one of Safaricom’s largest original equipment manufacturers, providing software management for its mobile money service, M-PESA. Safaricom also announced that it had selected Huawei to deploy its 5G network in March.
The liberalization of Ethiopia’s formerly closed telecommunications market is part of a series of reform plans announced by Ethiopian Prime Minister Abiy Ahmed when he took office in 2018. This process of opening up state-owned industries to the private investment over time is called gradualism. It is a reform method that China used to open up its economy in the 1990s.
What we are seeing right now is exciting competition for the future of Ethiopia’s potentially lucrative telecommunications industry from two major world powers. No matter who wins the tender, they will be faced with the difficult task of growing a telecommunications industry in a changing market. Although under-reported, Africa’s second most populous country has been at war with its region of Tigray since 2020.
Smartphones and the second wave of COVID-19 infections in India
In response to a rapid increase in COVID19 cases, Chinese airline Sichuan Airlines has suspended all shipments to India for 15 days, effective April 19. Before the suspension, the state-owned airline was the primary shipping method 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 trip to India in 2015 that made waves on Chinese social media.
Sichuan Airlines’ announcement had a ripple effect on the Indian economy. Agents and freight forwarders were left without oxygen concentrators from China. And, according to The Times of India, Chinese manufacturers and freight forwarders have also started to raise prices by more than 20%.
Chinese cellphone makers are now scrambling to get shipments to one of their most important markets. The depreciation of the rupee was already forcing smartphone makers to increase prices by 10-15%, as ET reports. In addition 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 shortage of chips, a critical component in the functioning of smartphones, computers and electric vehicles. For this reason, the cost of smartphones could continue to rise, making it difficult for affordable Chinese phones to stay… affordable.
Alexandria Williams is an American journalist based in Nairobi who studied and reported in China for several years. His writings focus on technology in China and follow the future of Chinese tech giants in Africa. Follow her on Twitter: @alexandriasahai and instagram: lanlanivesinchina.
This article is published in partnership with The China Africa Project