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- Nov 20, 2010
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By Edward Qorro, The Citizen Reporter
Dar es Salaam. Music by young
generation artistes, popularly known as
Bongo Flava, is reportedly minting
millions for a foreign company in a
lucrative ringtones and cellulartunes
business while little, if anything, goes to
the pockets of local copyright holders.
Investigations conducted by The Citizen
have established that the company,
OnMobile, which has headquarters in
Bangalore, India, works in collaboration
with two major mobile service providers,
Vodacom Tanzania and Airtel.
Each callerback tune costs Sh300. Our
source, who asked not to be mentioned,
hinted that from the business, Vodacom
and Airtel get between Sh20 million and
Sh40 million daily, respectively.
Going by the above estimates, the two
companies are earning an annual total of
about Sh22 billion. But the mobile firms
could not confirm this amount.
Officials from both companies, however,
admitted they have working relations
with OnMobile, but they declined to
reveal to The Citizen how much they
generate from the business and how
proceeds are shared.
Information we obtained indicates that
the two mobile phones firms retain
between 75 and 80 per cent of the total
sales, while OnMobile takes the rest.
But the line of distribution does not end
there, as there is another locally
registered and licensed company, Push
Mobile, which, after getting the money,
retains 40 per cent while the artiste gets
seven per cent as the rest goes to
OnMobile.
Asked of the Sh8 billion they reportedly
generate from the business annually,
Vodacoms chief for marketing and
corporate affairs, Ms Mwamvita
Makamba, could neither admit nor deny
it. She, however, maintained that
Vodacom was not privy to the
arrangements between their content
providers (not necessarily OnMobile) and
the musicians.
Much as we would enjoy seeing every
stakeholder get fair returns of their
works, it is really not our business to get
involved with artistes-provider
commercial relationships. The whole
thing is dictated by the market, she told
The Citizen.
For her part, Airtels regulatory and
corporate communications director, Ms
Beatrice Singano, confided to this
reporter that they had an agreement
with OnMobile to provide value added
services (VAS) as it was common practice
with any contract. She, however,
maintained that she was obliged not to
reveal the details to any third party.
Regarding the information that her firm
is raking in about Sh15 billion annually
from the callback tunes business, Ms
Singano was categorical that she would
not share that information for obvious
reasons, saying that it was still important
to understand that value added services
revenue constitutes varied offerings
beyond call back tunes.
We are not in a position to scrutinise
revenue sharing mechanisms between
third parties. We believe that there are
good legal frameworks in Tanzania that
can arbitrate any disputes and ensure
appropriate gaps are closed, said Ms
Singano.
According to our source, in the late
2000, any recording artiste had to strike
a deal with two local companies Push
Mobile or Spice if he or she wanted to
sell their songs as ringback tones, but
the trend has since changed after
OnMobile came on board.
As for now, an artiste has to sign a
contract with Push Mobile which now
has to deal with OnMobile which has a
contract with Vodacom and Airtel in the
ringtone business... but OnMobile does
not have the licence to operate in the
country, maintained the source.
A deal between the foreign company on
the one hand and Airtel and Vodacom on
the other, was struck in 2011, this paper
can reveal.
OnMobile is said to have entered into an
agreement to provide technical service
platforms for contents, including music
from local artistes, to Vodacom Tanzania
and Airtel Tanzania.
This paper has reliably learnt that
Tanzania Communications Regulatory
Authority (TCRA) met with OnMobile
officials on Tuesday last week.
Contacted for comments on what
transpired from the meeting, TCRA
director general, Prof John Nkoma, told
The Citizen that licensing was a process
and it was still ongoing.
For his part, Mr Biswajit Nandi,
OnMobiles senior director for business
development in Africa initially told this
paper that they lodged an application for
an Application Services Licence with
TCRA in November 2011, adding that an
acknowledgement of the same has been
received.
He further explained that OnMobiles
licence application is being studied and
the firm would be updated of any
progress at the TCRA.
The managing director of Push Mobile
Media, who are content providers for
Airtel and Vodacom, Mr Freddie Manento,
referred this reporter to the two
companies, saying that they were in a
better position to know the status of
OnMobile.
Ms Makamba admitted they had
arrangements with OnMobile to provide
them with technical service platforms for
contents that are ordinarily provided by
other entities that are duly licensed for
the purpose.
OnMobile have recently requested to be
aggregators of contents, the service
which they provide to other Vodafone
entities and we would be happy to let
them perform it for us, but they are yet
to provide us with a proof of their TCRA
licence to that effect, she said.
Ms Makamba, however, noted that her
office understood that there was still
lack of clarity with regard to the level of
telecoms licensing required by entities,
which provide contents through mobile
operators.
But we have had our standard of
requiring an aggregator to possess at
least an application services licence...
hence our stance of requiring them to
acquire it before we enter into that
aggregation relationship, she said,
adding:
They do not need sector licence to
provide us with technical service
platform. In fact, with content provision
you only need sector licence if you are to
deal directly with customers. If they only
supply to operators who will provide to
customers they would not need a sector
licence. In short, so far we havent
engaged them for services that require
sector licence.
Reached for comment, deputy minister
for Science and Technology January
Makamba maintained that TCRA ought to
explain why OnMobile was operating
without a licence.
We wrote to TCRA on Friday to establish
the operations of the company and from
there we will be able to issue the
government stance, added the minister
Dar es Salaam. Music by young
generation artistes, popularly known as
Bongo Flava, is reportedly minting
millions for a foreign company in a
lucrative ringtones and cellulartunes
business while little, if anything, goes to
the pockets of local copyright holders.
Investigations conducted by The Citizen
have established that the company,
OnMobile, which has headquarters in
Bangalore, India, works in collaboration
with two major mobile service providers,
Vodacom Tanzania and Airtel.
Each callerback tune costs Sh300. Our
source, who asked not to be mentioned,
hinted that from the business, Vodacom
and Airtel get between Sh20 million and
Sh40 million daily, respectively.
Going by the above estimates, the two
companies are earning an annual total of
about Sh22 billion. But the mobile firms
could not confirm this amount.
Officials from both companies, however,
admitted they have working relations
with OnMobile, but they declined to
reveal to The Citizen how much they
generate from the business and how
proceeds are shared.
Information we obtained indicates that
the two mobile phones firms retain
between 75 and 80 per cent of the total
sales, while OnMobile takes the rest.
But the line of distribution does not end
there, as there is another locally
registered and licensed company, Push
Mobile, which, after getting the money,
retains 40 per cent while the artiste gets
seven per cent as the rest goes to
OnMobile.
Asked of the Sh8 billion they reportedly
generate from the business annually,
Vodacoms chief for marketing and
corporate affairs, Ms Mwamvita
Makamba, could neither admit nor deny
it. She, however, maintained that
Vodacom was not privy to the
arrangements between their content
providers (not necessarily OnMobile) and
the musicians.
Much as we would enjoy seeing every
stakeholder get fair returns of their
works, it is really not our business to get
involved with artistes-provider
commercial relationships. The whole
thing is dictated by the market, she told
The Citizen.
For her part, Airtels regulatory and
corporate communications director, Ms
Beatrice Singano, confided to this
reporter that they had an agreement
with OnMobile to provide value added
services (VAS) as it was common practice
with any contract. She, however,
maintained that she was obliged not to
reveal the details to any third party.
Regarding the information that her firm
is raking in about Sh15 billion annually
from the callback tunes business, Ms
Singano was categorical that she would
not share that information for obvious
reasons, saying that it was still important
to understand that value added services
revenue constitutes varied offerings
beyond call back tunes.
We are not in a position to scrutinise
revenue sharing mechanisms between
third parties. We believe that there are
good legal frameworks in Tanzania that
can arbitrate any disputes and ensure
appropriate gaps are closed, said Ms
Singano.
According to our source, in the late
2000, any recording artiste had to strike
a deal with two local companies Push
Mobile or Spice if he or she wanted to
sell their songs as ringback tones, but
the trend has since changed after
OnMobile came on board.
As for now, an artiste has to sign a
contract with Push Mobile which now
has to deal with OnMobile which has a
contract with Vodacom and Airtel in the
ringtone business... but OnMobile does
not have the licence to operate in the
country, maintained the source.
A deal between the foreign company on
the one hand and Airtel and Vodacom on
the other, was struck in 2011, this paper
can reveal.
OnMobile is said to have entered into an
agreement to provide technical service
platforms for contents, including music
from local artistes, to Vodacom Tanzania
and Airtel Tanzania.
This paper has reliably learnt that
Tanzania Communications Regulatory
Authority (TCRA) met with OnMobile
officials on Tuesday last week.
Contacted for comments on what
transpired from the meeting, TCRA
director general, Prof John Nkoma, told
The Citizen that licensing was a process
and it was still ongoing.
For his part, Mr Biswajit Nandi,
OnMobiles senior director for business
development in Africa initially told this
paper that they lodged an application for
an Application Services Licence with
TCRA in November 2011, adding that an
acknowledgement of the same has been
received.
He further explained that OnMobiles
licence application is being studied and
the firm would be updated of any
progress at the TCRA.
The managing director of Push Mobile
Media, who are content providers for
Airtel and Vodacom, Mr Freddie Manento,
referred this reporter to the two
companies, saying that they were in a
better position to know the status of
OnMobile.
Ms Makamba admitted they had
arrangements with OnMobile to provide
them with technical service platforms for
contents that are ordinarily provided by
other entities that are duly licensed for
the purpose.
OnMobile have recently requested to be
aggregators of contents, the service
which they provide to other Vodafone
entities and we would be happy to let
them perform it for us, but they are yet
to provide us with a proof of their TCRA
licence to that effect, she said.
Ms Makamba, however, noted that her
office understood that there was still
lack of clarity with regard to the level of
telecoms licensing required by entities,
which provide contents through mobile
operators.
But we have had our standard of
requiring an aggregator to possess at
least an application services licence...
hence our stance of requiring them to
acquire it before we enter into that
aggregation relationship, she said,
adding:
They do not need sector licence to
provide us with technical service
platform. In fact, with content provision
you only need sector licence if you are to
deal directly with customers. If they only
supply to operators who will provide to
customers they would not need a sector
licence. In short, so far we havent
engaged them for services that require
sector licence.
Reached for comment, deputy minister
for Science and Technology January
Makamba maintained that TCRA ought to
explain why OnMobile was operating
without a licence.
We wrote to TCRA on Friday to establish
the operations of the company and from
there we will be able to issue the
government stance, added the minister
