Samsung facing growing threats despite record profits

Samsung facing growing threats despite record profits

Samsung

Sprawling South Korean conglomerate Samsung Electronics has recovered from a humiliating recall fiasco and the arrest of its de facto leader with remarkable speed, analysts said, after the tech giant stunned investors with record-breaking profits.

But the world’s top smartphone maker, one of the huge family-run chaebols which dominate the South Korean economy, will be confronted by tougher challenges in the future as Chinese rivals take aim at its semiconductor business and questions emerge over the firm’s leadership.

Samsung took observers by surprise this week when it posted a forecast-beating 14.1 trillion won (US$12.6 billion) in operating profits in the second quarter — a 73 percent jump from the previous year — putting it on course to better rival Apple for the first time.

Consensus forecasts of Apple’s operating profits, due to report this week, are estimated at around $10.6 billion.

Samsung said huge sales of its new Galaxy S8 smartphone and demand for its memory chips were behind the jump in the April-June period and predicted another blockbuster report for the current quarter to September.

The firm has been battling to overcome an embarrassing recall last year of its flagship Galaxy Note 7 smartphone over exploding batteries, which cost it billions of dollars and dealt a severe blow to its reputation.

“I would argue Samsung turned that corner pretty quickly, at least from a financial point of view,” said Jan Dawson, chief analyst at Jackdaw Research.

Dawson noted the 28 percent increase in sales in Samsung’s mobile division, contrasting it to the 15 percent drop the firm saw during the third quarter of last year when the recall crisis was at its peak.

‘Ready to be picked’

The biggest driver of the rapid recovery was Samsung’s semiconductor business, which raked in 8.03 trillion won in operating profit in the second quarter, up 204 percent from the previous year. Samsung provides chips to other companies including Apple.

Geoffrey Cain, author of an upcoming book on the Samsung empire, said the firm was simply riding the wave of “huge investments in strategic industries like chipsets and OLED panels” it made years ago.

“Samsung has plantations of fruit ready to be picked, even if a few like its Note 7 went rotten,” Cain told AFP.

Rising global demand for semiconductors has pushed prices high to Samsung’s benefit, said Chung Sun-Sup, an expert who runs the website Chaebol.com that tracks the corporate assets and practices of South Korean conglomerates.

“The company will enjoy the global semiconductor boom over the next few years,” Chung said.

But the bigger challenge for Samsung is what happens after the harvest, as the firm faces questions over its “untested” leader and the growing threat from Chinese rivals.

The firm’s de facto leader Lee Jae-Yong is in custody after a February indictment over a nationwide bribery scandal that toppled then-president Park Geun-Hye.

The leadership vacuum will not affect day-to-day operations of the Samsung empire, Chung said, largely due to the company’s dispersed management structure.

But with a handful of its key executives battling allegations of bribery, Samsung’s ability to take major decisions on long-term business investment will be compromised.

‘Untested’

Lee is accused of bribing Park and her secret confidante with millions of dollars to seek government favours to smooth his succession to the Samsung empire. He has denied any wrongdoing.

A court ruling on Lee’s case is expected before August 27, when his arrest warrant expires.

But even if Lee returns to work, Cain says the Samsung heir “remains untested on the market”.

“Few people outside Samsung truly know what he’s capable of, because his succession has always been guaranteed,” he said.

Lee has effectively been at the helm of the group since his father suffered a heart attack in 2014.

But Samsung’s success riding on its semiconductor business will face increasing headwinds, analysts warn, as it faces rapidly emerging Chinese rivals spending billions of dollars to dominate the global chip market.

“The Chinese chipset makers are studying, mimicking and playing catch-up in the realm of semiconductors,” Cain said, comparing the practice to what South Korea had done to Japan previously, and how Japan caught up with the United States in the 1950s and 1960s.

To become the next Samsung is the ultimate dream of these Chinese chipset makers, Cain told AFP, adding: “It’s entirely feasible, and Samsung should be terrified.”

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Watch out Messi, here come the footballers at RoboCup

Watch out Messi, here come the footballers at RoboCup

Robots fight for the ball during their football match in the standard platform league tournament at the RoboCup 2017 in Nagoya, Aichi prefecture on July 30, 2017. In the four-day RoboCup 2017, about 3,000 researchers and engineering students showed off their latest technologies, with robot footballers competing in eight leagues. Kazuhiro NOGI / AFP

With steely focus, player number 3 scored a stunning opening goal in the first few minutes of the high-stakes football match between a dominant Bordeaux and their plucky Chinese opponents.

But as the crowds cheered, the pint-sized player, known as Arya, showed none of the customary swagger of triumphant strikers. In fact, robot number 3 and its teammates showed no emotion at all as they continued to exterminate their rivals’ hopes of victory at RoboCup 2017 in Japan.

The game, which Bordeaux won 4-0, was one of the gripping final matches in a four-day event that saw about 3,000 researchers and engineering students from 40 countries displaying the prowess of their latest robotic inventions on the football pitch.

Ranging in design from humanoids with human faces to more skeletal contraptions, the robots were programmed to be self-directed and played strategically without being given instructions.

The robots “see” using a camera installed in their heads, while installed with artificial intelligence (AI) to recognise the spacing and objects in the sight.

The annual championship, which was held in the central Japanese city of Nagoya, started 20 years ago when a computer beat the top human player in chess, “a big event which prompted computer engineers to set the next goal”, said Itsuki Noda, the president of the RoboCup Federation.

“Unlike chess, football players have to read constantly changing situations and choose the best movements while competing against rivals,” he said.

“Also, football requires very good teamwork, which was a completely unresearched area for computer engineers. To solve the riddle, we chose soccer for the robots’ next challenge.”

Technologies have since advanced so that robots can make autonomous judgements and cooperate with others, said Noda, also the principal research manager at Japan’s National Institute of Advanced Industrial Science and Technology.

That ability to play as a team was the “winning factor” in Bordeaux University’s triumph, according to associate professor Olivier Ly, who acted as coach and positioned his team’s players.

“We developed lots of features on the team play… The robots play together, try to do some passes,” he said. The Chinese team deployed highly mobile robots that, unafflicted by injury concerns, were quick to bounce back to their feet after falling over.

But it was not enough to match the French team. As the match ended and the humans celebrated, the lifeless robot players were quietly packed away into suitcases.

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Facebook’s mobile video ads boost sales growth above projections

Facebook’s mobile video ads boost sales growth above projections

Mark Zuckerberg

Facebook Inc.’s investors are salivating over the revenue potential for the company’s chat businesses, Messenger and WhatsApp, after Chief Executive Officer Mark Zuckerberg said he’d like to move “a little faster” to make money from them.

The company has warned that sales growth, fueled primarily by mobile advertising, will slow because it can’t keep loading ads into users’ news feeds on its main social network. Both of Facebook’s chat apps have more than 1 billion users, though neither contributes significant revenue yet. After the company’s earnings report Wednesday, Wall Street decided these apps are the answer to the growth challenge, and Zuckerberg’s comments sent the shares up as much as 4.7 percent in extended trading.

Executives spent the bulk of their earnings call with investors fielding questions about the potential for Messenger and WhatsApp. Zuckerberg tempted them further, saying Facebook “should be able to do better” at building a business than popular Asian messaging apps. It was left to Chief Operating Officer Sheryl Sandberg and Chief Financial Officer David Wehner to quickly remind everyone that the app businesses were still in experimental phases.

Sensing he might have inflated expectations just a bit too much, Zuckerberg reframed his remarks.

“So there have been a number of questions about Messenger,” he said. “It’s a longer term thing. I actually think in over the next couple of years or few years, the much bigger driver of the business and determinant of how we do is going to be video, not Messenger.”

Earlier, Facebook reported second-quarter sales that beat analysts’ estimates, climbing 45 percent to $9.3 billion. Mobile advertising generated 87 percent of total ad revenue, an increase from 84 percent in the same period a year earlier. Net income rose to $3.9 billion, or $1.32 a share, from $2.3 billion, or 78 cents.

Facebook’s social network, now with 2.01 billion monthly active users, is steadily driving sales at a faster pace than at other technology giants. That consistency funds the company’s efforts in chat applications and virtual reality. To keep up growth, Facebook has been heavily investing in video.

The sales growth is “really based on increased engagement” on Facebook and Instagram, Sandberg said in an interview.

“Facebook and Google are taking virtually all the growth in digital advertising — they’re the easiest place to spend your money,” said Brian Wieser, an analyst at Pivotal Research Group.

Facebook shares closed Wednesday at $165.61 in New York, just off the company’s record high of $166 on Monday. The stock has increased 44 percent this year.

TV Initiative
While Facebook’s video advertising business has helped propel sales for the last few quarters, the company is getting into content, too. Facebook has funded TV-like shows and short video series for a new product set to come out in mid-August, people familiar with the matter have said. The effort will help the company gain a share of the $70 billion television advertising market. It will also kickstart Facebook’s role as a video platform for episodic viewing, not just the viral videos that already are common, Sandberg said.

With the frequency of ads on the social network holding steady to avoid turning off users, Facebook is relying on Instagram, the photo-sharing application, for more ad inventory. Now with more than 700 million users, Instagram has a mature advertising business, built off of Facebook’s, and has been competing with newly public Snap Inc., the maker of Snapchat, for young audiences.

Facebook acquired WhatsApp for $22 billion, and spun off Messenger from its main application. WhatsApp now has 1 billion users a day, the company said. Before Wednesday, Zuckerberg hadn’t expressed any urgency about making money from those applications. Both are attempting to generate sales from users’ direct relationships with businesses. Oculus, the company’s virtual reality division, has been working to make the technology popular among consumer audiences, but hasn’t yet seen widespread adoption.

The new initiatives helped boost Facebook’s costs 33 percent to $4.9 billion in the quarter. The company also increased its workforce 43 percent to 20,658 as of June 30.

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Apple removes some VPN apps in China

Apple removes some VPN apps in China

Apple Inc. has removed some virtual private network applications from its stores in China, a move that could block users ability to bypass a local web firewall and access overseas sites.

“We have been required to remove some VPN apps in China that do not meet the new regulations,” Carolyn Wu, Apple’s China spokeswoman told Bloomberg in an emailed response, referring to rules issued by the Ministry of Industry and Information Technology earlier this year that asks all developers offering VPNs to obtain a government license.

VPNs are popular in China as they help users get around the Great Firewall, a system used by China to control Internet access. The removal is the latest sign of China’s tightening measures to block individuals’ access to virtual private networks, following shutdowns of several popular VPN services. Policy makers have prioritized stability ahead of a twice-a-decade leadership reshuffle due in the fall.

Wu said the VPN apps remain available in all other markets where Apple does business.

China’s MIIT didn’t immediately respond to a Bloomberg’s fax seeking comment on the issue out of business hours.

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Behind Uber’s messy CEO search is a divided boardroom

Behind Uber’s messy CEO search is a divided boardroom

PHOTO: Eric Piermont/AFP/Getty Images

Things over at Uber Technologies Inc. remain insane. First, I reported Tuesday that Hewlett Packard Enterprise Co.’s Meg Whitman was a candidate for Uber’s vacant chief executive officer job. Then Thursday afternoon, I said General Electric Co.’s Jeffrey Immelt was also on the shortlist. By Thursday night, Whitman wrote on Twitter that she wouldn’t be Uber’s next CEO. “We have a lot of work still to do at HPE and I am not going anywhere,” she wrote.

Whitman’s tweetstorm was a disappointment to some people over at Uber. She put out her statement just as Uber’s board was starting its quarterly meeting. The company hopes to lock in a CEO by early September. The big question is whether the board can get on the same page. Getting a majority of the eight-person group to support a single candidate is looking to be difficult.

Even after the venture capital firm Benchmark helped orchestrate the ouster of former CEO Travis Kalanick, a feud has persisted. The situation does not seem sustainable. Swapping out Benchmark’s board seat with another partner—Bill Gurley for Matt Cohler—did not resolve the tension. The new CEO may need to push one side out of the company for his or her own sanity. Kalanick does not seem at peace with his own resignation. He wants to find a road back to Uber beyond just his board seat. Some of Kalanick’s strongest critics have argued to me that Kalanick would prefer a weak CEO just to increase his chance of making a comeback.

There’s also the looming question of whether SoftBank Group Corp. will cut a giant check for Uber shares. That deal, as Bloomberg first reported, could be a mix of primary and secondary investment. The SoftBank investment is being talked about like it could be the deal to end all deals. The investment could coincide with or precipitate a truce with Ola in India or Grab in Southeast Asia—together, the companies have raised billions from SoftBank. At the same time, the Japanese investment firm could buy shares from some of Uber’s unhappy early investors. Would Benchmark hand over its board seat to SoftBank’s Masayoshi Son if it could sell a sizeable sum of its stake? If founder-friendly Masa got a board seat, would he vote with Kalanick?

These are the questions people close to Uber are asking.

With Whitman’s decision to take herself out of contention, I don’t think that simply clears the way for Immelt. There are other candidates in the mix. We just don’t know who they are yet. Whitman seemed like a plausible option who had at least some serious supporters on Uber’s board.

At this point, after months of scandals, I think a lot of Uber employees are just ready for a live, human CEO to guide them out of the wilderness. The question is whether the board will be able to agree on one.

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Google To Grant SA and Nigerian Startups $2.5 Million

Google To Grant SA and Nigerian Startups $2.5 Million

Google have commited to provide Africa with $20 million in NPO funding.

Google reaffirmed its commitment to their non-profit arm, Google.org, on Thursday by announcing that the company will provide nonprofit organisations with up to $50 million in funding. Out of this $50 million, $20 million has been set aside for African nonprofits to try and better prepare people for the coming shift in the nature of work which is likely to be brought about by new technological innovations.

The company also announced that initial grants of $2.5 million will be given to the nonprofit arms of African startups Gidi Mobile and Siyavula. The two startups have been identified to provide free access to learning for 400,000 low-income students in Nigeria and South Africa.

Nigerian startup Gidimo, which was created by mobile technology enterprise Gidi Mobile Ltd, is Africa’s first mobile learning and personal advancement platform. The startup is on a mission to inspire and enable Africans to achieve their personal advancement goals.

Siyavula on the other hand is a startup that enables educators to create, share, and adapt freely accessible and openly-licensed Open Education Resources (OERs) which are aligned to the South African school Mathematics and Science curricula. What makes this startup different to others is that unlike the vast majority of material which is under a traditional, restrictive copyright license, Siyavula material can be adapted to ensure cultural relevance or refreshed without incurring costs. In addition to the online, printable resources, Siyavula publishes a range of free Mathematics and Science textbooks.

“Our charitable arm, Google.org, is committing $20 million over the next five years to nonprofits that are working to improve lives across Africa.” said Sundar Pichai, chief executive officer of Google, whilst speaking at a Google event in Lagos.

“We’re giving $2.5 million in initial grants to the nonprofit arms of African startups Gidi Mobile and Siyavula to provide free access to learning for 400,000 low-income students in South Africa and Nigeria. The grantees will also develop new digital learning materials that will be free for anyone to use.

“We also want to invite nonprofits from across the continent to share their ideas for how they could impact their community and beyond. So we’re launching a Google.org Impact Challenge in Africa in 2018 to award $5 million in grants”, he said.

Pichai concluded by emphasising that any eligible nonprofit in Africa can apply, and anyone will be able to help select the best ideas by voting online.

Staff Writer

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TSA: Why government needs to advance fintech agenda

Before the implementation of the Treasury Single Account policy (TSA) of the Federal Government in 2015, it was common practice for some commercial banks to use government funds in their coffers to purchase government debt instruments. By ‘ploughing back’ these funds into the short end of the government debt market, these banks made ‘quick profit’ at the expense of government.
Back then, it was impossible to say with absolute certainty what government was worth in terms of its deposits with the commercial banks. This was because even some federal universities had as many as 120 known bank accounts, while other accounts, with heavy balances, were kept under wraps. By mid-2015, it was estimated that Ministries, Departments and Agencies (MDAs) operated as many as 17,000 bank accounts scattered across commercial banks. This complicated shadowy maze fuelled corruption, cost government N4billion monthly in account management fees, and resulted in unremitted funds, which often went unaccounted for.
 
With the implementation of TSA, the myriad of accounts was collapsed into one account, domiciled with the Central Bank of Nigeria. In the last 22 months of the implementation of the policy, it has not only engendered greater transparency but government is better able to keep tabs on its income, thanks to the ingenuity of SystemSpecs’ Remita which is responsible for synchronising the funds into the single account. As of March 2017, the TSA had more than proved its mettle as it had efficiently handled government transactions to the tune of N7trillion.
But the implementation of TSA, which is also practised by countries like Sweden, Brazil, France, and the United Kingdom, has done more than boost accountability and transparency. It has also engendered ease of payment for government-related transactions, improved financial inclusion and drawn attention to the place of indigenous platforms in managing large-scale complex transactions.
In more developed climes, successes such as the one recorded by the TSA would most likely have inspired the authorities to make fintech start-ups play bigger roles in the financial services space either as entities distinct from or in collaboration with banks. For instance, in its latest innovative move, the Bank of England is giving fintech start-ups direct access to the UK’s Real-Time Gross Settlements systems (RTGS), the British equivalent of TSA.
According to Bank of England Governor Mark Carney, this is being done to stimulate competition and innovation in payment services. The British apex bank expects that the first non-bank or payment service provider will have access, subject to legislation making its way through parliament and coming into force, by 2018.
With the new development, tech companies will no longer have to go through selected banks and other providers for a settlement account with the Bank of England which allows them to transfer money between different institutions on behalf of customers. As a precondition for participation, however, fintech companies have to demonstrate compliance with an established risk management framework. This is the way to go even in Nigeria as this would further support financial stability through greater diversity and risk-reducing payment technologies. But what do we have instead? At present no one person in government is exactly a poster child for the TSA, except maybe the President and Vice President. Small wonder, then, that we have been witnessing pockets of defaults regarding remittances into the account by some government agencies since the president took ill.
Meanwhile, a World Bank paper suggests that the TSA “has become the international good practice to include as many government-controlled trust funds and Extra-budgetary Fund within the TSA as legally possible.
“The main argument is that the government is—or should be—considered to have the highest creditworthiness in the country, and that an alternative place to hold trust fund assets is thus sub-optimal. Indeed, many countries have laws which insist that certain trust assets can only be invested in government obligations.”
But there are cases in Nigeria where funds are still not remitted to TSA as and when due. Recently, a Federal High court in Lagos granted an interim order for seven commercial banks to remit the sum of $793million, allegedly hidden with them in violation of the TSA policy. The action of the agencies and banks directly undermines the success of the policy, even though some of the banks have made attempts to clear their names.
The Federal Government needs to push ahead with the TSA policy against all odds and enforce compliance amongst defaulting parastatals/private sector entities such as the NPA, commercial banks, NHIS, etc that have declined to remit funds in their custody. This is because if left unaddressed, these pockets of non-compliance could soon become a tsunami and ultimately undermine and destroy the policy completely.
Strong deterrents including appropriate sanction, through fines, suspensions and other measures should be applied on erring companies or government agencies that totally or partially flout TSA directives.
The bold and decisive implementation of the TSA policy is one of the major achievements of the Buhari led federal government. Even when pessimists feared that the policy would adversely affect the banking system, those fears have been proved wrong so far as the policy has resulted in massive savings for government.
There have been attempts to underscore the key gains of TSA for economic growth but the administration has to better communicate them to the Nigerian people. Certainly, TSA frees up more funds for developmental projects. However, World Bank literature suggests that there are eight other major gains from a well implemented TSA policy.
 
A well implemented TSA policy, according to the World Bank, ultimately improves appropriation control, reduces bank fees and transaction costs, improves operational control during budget execution, enables efficient cash management, facilitates efficient payment mechanisms, improves bank reconciliation and quality of fiscal data, lowers liquidity reserve needs and allows complete and timely information on government cash resources.
Most of these have been achieved through the Nigerian experience. And because of this success it behoves the government not only to strengthen the policy but also to see to it that other African countries adopt it. Because that is the logical thing to do to improve transparency on the African continent.
Ejiofor is a public affairs analyst based in Benin City

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ezTalks Meetings: Robust Video Conferencing & Web Conferencing

ezTalks Meetings: Robust Video Conferencing & Web Conferencing

ezTalks Technology Co., Ltd launched ezTalks Meetings a video conferencing software integrated with HD video conferencing.

Popular online video conferencing providers, ezTalks Technology Co., Ltd enables users to connect with individuals anytime anywhere. The company is dedicated to providing one-stop video conferencing solutions to make businesses of any size communicate and collaborate in a more productive and effective way.

ezTalks Technology Co., Ltd launched a video conferencing software that is integrated with HD video conferencing, screen sharing, remote control along with other robust features. The platform is applied extensively by all industries for online video meetings, presentations and webinars, etc. In the following, we will have a full review of ezTalks Meetings, exploring its key features and main advantages.

There are several robust features that come with this software, making it powerful and easy to use for you.

Key Features of ezTalks Meetings

1. Quick Access to Meeting

It is really easy to join a meeting using this amazing software. In fact, whenever an invitation is sent the customers to join the conference, they simply need to enter the meeting number along with their names and within just one minute they will be able to enter ezTalks Meetings.

2. Fantastic HD Video and Audio Quality

We are all aware of the fact that audio and video quality plays an essential role for any online conference and fortunately both of these are satisfied by ezTalks Meetings. As a matter of fact, 1920 * 1080p HD resolution is offered by the application, which provides awesome audio and video transmissions. However, it also offers other resolutions for you to choose one that will satisfy your requirements depending on your bandwidth.

3. Useful Screen Sharing

This is yet another feature that makes this software really outstanding by enhancing its productivity. You might want to present PowerPoint, PDF and Word files to your colleagues after working out a proposal draft, in order to get their ideas on finalizing them. All you will need is to start the incredible ezTalks Meetings, and then present your ideas to your co-workers and discuss with them. Also, you can find more screen sharing software for easy collaboration recommended by ezTalks.

4. Record the Conferences

ezTalks Meetings is capable of recording the whole meetings for you to check the details afterwards. After the conference is completed, you just need to click the “Stop” button and the video is going to be saved to your computer automatically. Following this, you can always send the video to the other participants whenever you feel like.

Although we do not have any idea regarding the maximum recorded time permitted, in case the meeting is quite long it will be saved automatically to different files. Therefore, ezTalks Meetings eliminates any reason to worry about the recording time.

5. Schedule Meetings

This amazing software makes it possible to organize a meeting beforehand and send an invitation to the participants. This will help to make sure that everybody has some sort of idea regarding the meeting beforehand. The organizer can also confirm those who are going to be the participants in the video conference.

When you click on “Schedule”, an email with the information regarding the meeting will be sent out to the participants. They will be able to understand everything regarding the conference by going through that email. You might select the participants from your “Contact” list or just enter any new email address directly.

6. Text Live Chat

Although it might appear that a video conferencing software will only require speaking face to face, sometimes text live chat is also required. It might happen that you need to send out several URLs or even text somebody in the conference privately without causing any disturbance to others. In that case, you need to text publicly or even privately to the participants.

7. Control Meeting Settings

Being the host of the conference, you have got the right to control it, lock it, mute anybody or even kick somebody out. Moreover, you can also use another person as a presenter when you require him to share the screen or the files from his end. All these features help to make ezTalks Meetings immensely popular at present.

Why ezTalks Meetings?
As a professional video conferencing solutions provider, ezTalks has made its software outstanding, ezTalks Meetings is one of them and it has increasingly gained popularity among business of all sizes. The software offers HD video conferencing plus unlimited meetings to remote colleagues, customers and suppliers. Irrespective of your devices, it is possible to connect to a video or audio conference call from a Mac, PC, Android or iOS gadget. Apart from these, there are still some other unique advantages of using ezTalks Meetings.

First, this breathtaking web conferencing software offers a free service with up to 100 participants, which makes it the first SaaS free service with such a large number of attendees in the market.

Second, since the service is absolutely free, you do not need to shell out any cash to try it out. In case you would like to have some more participants, there is the Premium plan available for you. This plan comes with different options for you to select, which is scalable to the growth of your business.

Last but not the least, ezTalks Meetings offers so many powerful features as we analysed above, but it has a relatively lower price. Besides its free service, the Premium plan is only starting at $12.99, with more robust video conferencing features than the Free plan. In this way, ezTalks Meetings is highly cost-effective, which is beneficial to enterprises, especially for startups or small businesses.

The review can be concluded by mentioning that ezTalks Meetings is undoubtedly one of the most effective and easy-to-use video conferencing applications on the market. This particular software will allow you to start or join a conference quickly and conveniently. Businesses of any level will absolutely enjoy a smoother communication and improved collaboration and by using ezTalks Meetings. If you are looking for any web conferencing tool, don’t think twice and go for ezTalks Meetings which will surely not disappoint you.

Staff Writer

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Yoco CEO, Katlego Maphai talks about empowering SME growth

Yoco CEO, Katlego Maphai talks about empowering SME growth

Yoco, CEO, Katlego Maphai.

South African fintech startup, Yoco has, in just over two years managed to offer a large number of businesses access to card payment facilities and their trading history online.

Yoco was founded by four friends, Katlego Maphai, Carl Wazen, Bradley Wattrus and Lungisa Matshoba who share a passion for technology and helping small business owners.

The company’s aim is to expand access to card payments to all types of SMEs, regardless of size, industry and even location. They offer mobile card readers that can be used to accept payments both at the store and on the go, with an application process that takes a few minutes online.

Yoco CEO and Co-Founder, Katlego Maphai says that in order for the SME sector to grow, financial institutions need to match the needs of small businesses, and it cannot remain business as usual because the very criteria set by financial institutions to manage risk when providing these services, are sometimes hindrances to access for small businesses.

IT News Africa interviewed Maphai to find out more about the growth of small businesses and how that could impact the economy.

1. With the growth of mobile penetration in Africa, how can small business owners leverage digital payment solutions?
Small business owners can do a number of things that will help them grow through electronic or digital payments. The advantages of digital payments are many. To give an example, payments solutions for SMEs aren’t just about the money, and should no longer be seen as a standalone aspect of a business. Payment solutions can help entrepreneurs mine marketing data, enhance customer satisfaction, help with forecasting and cut down on admin and costs.

Electronic payment solutions can also help small business owners to better manage their cash flows. Being in control of your cash flow as a small business owner ultimately gives you more control over your business. Not only can you pay your staff and suppliers on time, but you can make better decisions a lot faster and with more confidence.

2. How does accepting card payments or not accepting card payments affect SMEs?
Getting a card machine can often seem like a daunting task, especially for small and new businesses. Many entrepreneurs question if it’s worth their while, but once businesses start using them the benefits become clear.

Being able to process card payments can be the difference between success and failure for a business. Today’s customers prefer to pay by card and therefore don’t always carry cash. There are a few reasons for this, 1) it’s safer, 2) they can better track their finances, 3) cards are usually linked to loyalty programs, and 4) cards are convenient because one doesn’t need to queue at ATMs.

Also, customers usually spend more at your business when they’re paying with a card, which means you sell more. A study by Dun & Bradstreet found that customers spend 12 – 18% more when paying by credit card than when paying with cash. This is because paying by card means easier access to capital on the spot, which means it’s easier to spend money.

3. With so much success in South Africa, Is Yoco looking to expand further into Africa?
We believe that enabling card payments is transformative and we want to do that for African SMEs. Yoco operates in Cape Town and Johannesburg and we are planning to expand into the rest of Africa.

4. SMEs have the potential to contribute vastly to the economy, how is not being able to accept payments affecting this?
SMEs contribute close to 50% to GDP and drive around 60% of employment. However, due to their small size, fragmented nature and general unpredictability, they remain overlooked by large financial institutions because it hasn’t been economically viable to reach them from a cost and risk standpoint. The difficulty in accessing financial services for SMEs is a real impediment of growth for the sector.

Access to financial services for these businesses usually means survival or collapse of these businesses. A healthy SME sector is considered the cornerstone for reducing unemployment, increasing productivity in the economy and catalysing innovation.

The challenging economic environment in South Africa creates an opportunity for SMEs to play a vital role in resuscitating the country’s economy. SMEs are the future of commerce in South Africa and across the continent, and if not supported, we might not realise the South Africa we want to see in the future: a South Africa free of poverty and unemployment.

5. How has being listed as one of 250 most promising fintech organisations by Insight impacted Yoco?
We are grateful, and encouraged to work even harder for being recognised as one of the top 250 most promising fintech companies in the world, by global research company CB Insights. We were one of only five African fintech companies that made it onto this prestigious list, that means we are doing something right.

Fundisiwe Maseko

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Telkom introduces Unlimited Data and Voice

Telkom introduces Unlimited Data and Voice

Telkom today announced an overhaul of its fixed line product offering with the launch of Unlimited Home Internet and voice plans. (Image source: File)

Telkom today announced an overhaul of its fixed line offering with the launch of Unlimited Home Internet and voice plans.

For the first time, fixed line consumers are now able to choose their internet speeds and get uncapped data and unlimited anytime Telkom voice calls for free. This includes calls to over 6 million Telkom fixed and mobile numbers, and discounted calls to the top 30 international destinations.

In addition, consumers will also receive at least 1GB of mobile data per month, to stay connected while on the move.

Telkom has been taking a stand against the high cost of broadband for some time now with ground-breaking packages such as FreeMe and FreeMe Family mobile offerings and now Unlimited Home for fixed-line customers.

“South Africans want more affordable data and that’s what we are giving them. We are reducing the cost to communicate and making the internet more accessible,” said Telkom Consumer CEO Attila Vitai.

“Our FreeMe and FreeMe Family products gave South Africans the freedom they needed to communicate conveniently and cost-effectively. Unlimited Home extends our commitment to affordability to our fixed line customers too. We are at the forefront of reducing communication costs and Telkom has taken another big step to making the internet more accessible,” he said.

From 31 August, existing uncapped customers will automatically be upgraded to the new Unlimited Home Plans at higher speeds. Customers will be upgraded from 2Mbps to 4Mbps and from 4Mbps to 8Mbps or 10Mbps respectively. Customers will enjoy double the broadband speed and experience much higher fair use policy values with minimal price increases compared to current packages. Significant price reductions have been applied to the 20, 40 and 100Mbps Unlimited Home Plans.

The Unlimited Home plans entry level speeds will now be 4Mbps going up to 100Mbps on fibre. The service offers uncapped data, with the industry’s most generous fair use policy yet announced. The policy will apply only after at least 360GB have been downloaded on the 4Mbps service and 6000GB on the 100Mbps service. Data downloaded between 12 midnight and 7am does not count towards the fair usage policy, which further increases the value.

The packages, which are competitively priced by global standards, will open new unlimited gaming, streaming and downloading opportunities for South Africans for a standard monthly cost.

Staff Writer

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