Bullish Thoughts: You will be killed, made into mincemeat and packaged as dog food!

The 0913 people…
 
Does that sound familiar? Does anyone remember the Nissan NP300 single cab trucks that were branded the 0913 people?
 

Those were the days! Bullish Thoughts remembers buying his 0913 line for $65 when sanity was returning to the mobile sim cards market.
 

It was quite interesting to see an article in the Herald of 19 July 2012 indicating that some Econet sim cards had seen prices skyrocketing to $20 at a time where Telecel is saying $1 for 2 sim cards.
 

Bullish Thoughts got thinking…Econet is surely doing something right in the telecoms sector to warrant a black market premium of +800% on its sim cards.
 

There is no doubt that despite the relatively high prices, Econet Wireless still offers the best internet and voice connectivity deal for the mobile user.
 

Still on Econet Wireless, it was quite interesting to read the Econet Wireless CE update to Parliament. Not that he said anything new… its stuff we all knew…that Net*One refused to share its base station towers when it still boasted of bringing “the world in your pocket”. What happened in between is history suffice to say Econet Wireless had eureka moment and got “inspired to change your world” and Net*One is now crying foul.
 

There is a lesson to be learnt from this by all would be entrepreneurs and business managers. Do you really understand what gives you competitive advantage? Isn’t there a competing business that will leap frog your business by just a slight different value proposition?


Are you sure that you have got your business model right to the extent that you will not be left claiming that you have “the widest coverage” when all mobile phone users including my grandpa in Bhegedhe know who is the boss on coverage?

 
Apply your mind and introspect your business model and value proposition. Do you have a unique advantage or you will be history once another player lands in your space?

 
Recently Econet Wireless announced a slash of the 4G Mobile WiMax service prices and a return of the Mobile WiMax dongle that hasn’t been on the shelve since a while ago.

 
The slash is quite significant and outright makes redundant the need for a 3G dongle. For US$45 dollars you can purchase a ZTE TU25 Mobile WiMax dongle and be charged just US2.5c per megabyte for Internet.

 
To understand just how big the price slash is, consider that the same dongle used to cost a staggering $175 just two years ago and the price per megabyte was 15 cents just weeks ago.


 
Was/ Is price your competitive advantage? If so, you are probably history!

 
One last issue on value proposition is that never make a mistake when you introduce a competing product! Do you remember the EcoCash advert/ by-line:-
 

“No new sim card, no bank account, works across all networks”.
 

You get the idea, don’t you? Competition will “kill you, make you mincemeat and be package as dog food”!

 
 
The mid term fiscal review...

 
Bullish Thoughts can only say “YAWN!!!!!!!!!”
 

Shop at OK where everyone is a…

Bullish Thoughts: If you screw, be honorable and leave the organization!

Barclays Chairman Marcus Agius  is gone, CEO Bob Diamond is gone and newly appointed chief operating officer Jerry del Missier is set to follow his chief executive Bob Diamond. Del Missier has for years been a key lieutenant of Diamond, helping him build up the Barclays Capital investment bank

Not only is Diamond going home, he is going to “face tough questions from British lawmakers”  on Wednesday, the day after he quit as Barclays chief executive and a bank rate-rigging scandal claimed a third top-level scalp.

They rigged LIBOR rates, yes, that LIBOR that you read about in introductory Corporate Finance textbooks in first year university life…the famous London Interbank Offered Rate.

But they are going not before they cost shareholders $456m cash!

Just how many CEs own up locally when things go haywire? Some even after being pushed out even go about beating up others and demanding the ownership of their institutions. Never mind the screwed fellow shareholders and depositors!

And no one even questions them for the abuse of depositor funds and regulatory cash!

Stone Age is where we are living!

Shop at OK where everyone is a…

Bullish Thoughts is both a shareholder and customer of the OK Zimbabwe business. As a shareholders he cares about high dividend yields (certainly ones that are above the current measily <5%), healthy operating margins, tax efficiencies and extremely low shrinkage as well as high sales per store.

As a customer he cares more about variety of merchandise, reasonable mix of hard and soft lines, good store location (convenience), ambience and of course ridiculously low prices…yes, Bullish Thoughts say it again, “ridiculously low prices”.

So the question now is: “Is Bullish Thoughts happy either as a shareholder or as a customer?”

Definitely not!

Firstly, as a shareholder, these fires that now seem to be in the habit of burning the organisation’s outlets and warehouses is a cause for concern.

Do you remember the fire in Rusape a few years back, then Masvingo? Then Kwekwe? Then Harare? Then…?

Sounds more like a manufacturing entity being run by the Indians where the moment is becomes certain that inefficiencies have built up within the system due to obsolete equipment, you remove all the pictures of your great grandfather who founded the shop in the 1930s and any memorabilia. You then set up the entire place alight and insurance will take care of the rest and you are back in business.

Bullish Thoughts is just saying, eeehh, these fires eeehh will screw the shareholders one day! A financial fire that is!

How about as a customer? Bullish Thoughts feels hard done too! The ZAR has been markedly weakening as the Eurozone crisis (particularly the PIGS region) threatened to take the emerging markets down with it. Oil price is back under $100/b. Service stations have taken down the price of petrol from $1.51/l to an average of $1.39/l.

While everything has been down, down, down, OK Zimbabwe’s prices have been “up, up & more up”! More like “Morgan is More!”

Juices  (Cape) coming out of South Africa which used to cost $1.90-$1.95 per litre are now $2.45/l. Mazowe is up! Red Bull is almost $3 @$2.99. Eggs are up! It’s as if the Irvines & Crest chickens are laying golden eggs!

Sugar is up as well beyond $2.20/2kg. Even the wise waters seem to have increased in price.

As a customer, this is daylight misappropriation the country’s funds. No wonder why every sane person thinks that inflation numbers are massaged because if products that account for >35% of the CPI basket rise >25%, where is the dilution then coming from!

Bullish Thoughts can only say; “Shop at OK where everyone is a …”! Well, you can do the rest and fill it out depending whether you are a shareholder, debtor, creditor or customer!

At least, there is a choice for where to shop but very much limited in terms of where to invest (both private and public entities).

The share price established a resistance around 11.5c on the back of “significant demand” by the Botswana listed broking firm. Bullish Thoughts thinks the counter is worth an investor’s money only when the price is below 10c.

But you gotta be patient because the stock has suddenly become illiquid on the buy side!

Investors tired of the Zim story?

RenCap materially exited the ZSE disposing huge quantum of shares accumulated in 2009/ 2010.

The fund manager had been heavily invested in the Top 10 stocks by market cap. They did of course buy some of these shares cheaply! Delta @40c, Econet around 90c, etc so either way they also made their money despite the turmoil that has been the stock market for the past two years!

Foreigners are exiting the local market.

The promised elections have not come to pass, the indigenization drive has stooped so low to even private schools!

Average agricultural season, high cost and unreliable electricity amongst many woes bedevil the country.

The investors have been around for 3 years which can be classified as a medium term hrizon and still no ching ching.

Perhaps there is now a reallocation of the dollars to other emerging markets which are less risky and offer better returns anywhere!

Meet Sekalala, the Makerere University student Billionaire

Bullish Thoughts was inspired by the Ugandan African!

The Makerere University student epitomises how we African can ride the technology wave and develop applications that can generate koads of ching ching for the development of our nations.

Below is the story of Sekalala…

At just 22 years, Abdu Sekalala’s appearance is that of an ordinary student, but looks can be deceptive. The young man, is no ordinary student, while his colleagues await to celebrate sitting their last exam, he is already thinking about his next big challenge, how to improve his first innovation, a computer application. While others worry about where to find a job and earn their first salary, Sekalala is keenly watching the number of downloads of his application in one column while he calculates the financial return the hits make in the other.

Sekalala is a student of at Makerere University’s School of Computing and Informatics Technology (CIT) who has so far developed at least nine internationally recognized mobile phone applications that are not only building his career as an innovator but minting millions for him.

Sekalala got his break when Nokia, an international mobile phone company organized a special training session to help software developers hone their skills. The training in April and May last year presented a major break for the young man, whose application has crossed quarter a million hits so far.

While Sekalala’s success has excited his colleagues and trainers at Makerere, the challenge is where he will manage to control the excitement and keep focused. Sekalala says this is exactly what he is gunning for.

Software development has lately become an a global hit to make dollar millionaires and billionaires with the likes of Mark Zuckerberg founder of the social networking site Facebook, which he founded with colleagues while a student at Havard in 2004. Mr Zuckerberg is only 27 and is worth US$17bn (one and a half times bigger than the entire Ugandan budget for last year).

Finding success

Sekalala’s most successful application is the Wordbook which has already gone commercial and is making for him a Euro per down load or Shs3,200. Wordbook is a dictionary application with word of the day capability fully packed with definitions, examples and a selection of related words.

Speaking to Jobs and Career, Sekalala said his current success was guided by a clear focus and paying attention and making the best of the training opportunity when it presented itself.

“I paid attention throughout the sessions because I didn’t want to miss any information that I would [later] need. When we were asked to develop our own, I put my best and luckily my applications have been adopted by Nokia,” Ssekalala told Jobs and Career.

The applications are available on the Nokia Ovi Store with one of them, the Uganda Theme is a free download which has attracted over 300, 000 downloads making it the third most downloaded application.

The Nokia Ovi Store, is the firm’s application store. The greatest number of the downloads was registered in the Asian countries of India and Thailand.

Advice to young people

There is nothing impossible once you are determined to achieve your goals. He encourages young people to utilize all chances available while still in school.

The College’s training was aimed at improving the student’s mobile application development techniques to enable the public use Ugandan products world over and improve the visibility of the local software developers in the country.

His other applications

101 Romantic SMS, WhirlSports, nLightFlashlight and Tutu translate are free but have adverts provided by an Indian-based firm Vserv. Ssekalala is paid for the different brands that advertise through his applications.

He has already achieved his one million target downloads for his mobile applications and is set to earn $1million (about Shs2.5billion) before he turns 23.

“I make at least $100 (Shs250,000) a day from one application. I don’t have to look for a job after I finish school. In fact I make money while am seated in class learning and make more money than my lecturers,” Ssekalala boasted.

Michael Niyitegeka, a computer and information technology lecturer at the university said it is one of the university’s strategy to partner with government and the private sector to familiarize the students with employers so that they get to know what is needed before they are there.

Ssekalala already owns two companies; Gogetta which employs eight people and Foo Technology with seven employees. The companies focus on mobile and website development.

“Ever since I was a kid, I always wanted to do something with computers and my biggest motivation has always been a desire to innovate and leave a mark that says I was once here,” he said

Bullish Thoughts  has been inspired!

He hopes you have been too. If you didn’t know, Uganda is ruled by the famous (for whatever reason) Yoweri Museveni and is part of the East African Community and is now officially an oil producing nation.

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