👨🏿‍🚀TechCabal Daily – Vodacom’s lies

CRYPTO MARKET: HOW MANY SOUTH AFRICANS OWN CRYPTO?

Bitcoin	$21,611	– 0.28%
Ether	$1,700	+ 1.26%
BNB	$302	+ 1.33%
Solana	$35.65	– 0.78%
Cardano	$0.47	+ 1.24%
Name of the coin Price of the coin 24-hour percentage change		Source: CoinMarketCap

* Data as of 23:00 PM WAT, August 25, 2022.

At least four million. 

That’s what the Finder’s Cryptocurrency Adoption Index recent report says. Of these four million, 18–34-year-olds make up about 45% of the country’s crypto owners. 

The US-based financial comparison platform also states that South African men are 1.9 times more likely to own crypto, with a 65% holding, compared to 35% for women. The most owned cryptocurrency in the country is bitcoin, with 52% of the crypto owners holding it, which is more than the global average of 37%.

The crypto ownership rate in South Africa is 10%, which is lower than the global average of 15%, and roughly 5% of those surveyed in the country say they own bitcoin (BTC), with 2% saying they own ethereum, 2% dogecoin, and another 1% cardano.

Zoom out: South Africa might be at the centre of some of the world’s biggest crypto scams, but the country is definitely taking steps to provide an enabling environment for crypto. It’s devising a regulatory framework for cryptocurrencies, and the South African Reserve Bank recently urged banks to strengthen ties with crypto assets service providers.

QUICK FIRE 🔥 WITH JOHN ETOKHANA

John is a digital product designer, currently working on Web3-related products at Composable Finance.

John has over four years’ experience in product design and a background in graphic design creating relevant solutions and solving problems. His aim is to use his knowledge of digital design, technology, and strategy to provide value in a clear, accessible, effective, and delightful manner.

Explain your job to a five-year-old

You know how we have to tell grandpa his phone is upside down on video calls? It’s my job to make sure its easier for him to know that on his own.

What’s something you wish you knew earlier in your career/life?

Time is your best friend. Whatever is going on, good or bad, will pass. So stay in the moment, stay consistent, and you’ll be good.

Is product design a career you decided to go into? Or did you stumble onto it? What else would you do, if you could?

It’s kind of a bit of both actually. 

I was into graphic design for a few years prior. I had started learning out of interest in 2018 and did a few things, but there wasn’t a process to it until a work opportunity came in 2019, and I had to figure it out on the job.

So it was a decision that I didn’t execute until I stumbled on an opportunity. 

If I didn’t do design, I would probably be a network engineer. I studied electrical/electronics engineering, so I kind of resonated most with that field. In another life or multiverse, I’d have probably done music as well.

As a product designer, what’s one misconception people have about your job?

There’s a lot, but I think the one that gives me the ick the most is people think it’s easy. If I had ₦10,000 for every time I heard the phrase “Is it not just design?”, I’d probably be a millionaire. 

Is there a difference between product design, and UI/UX design? 

The major difference is in the word product itself.

Product designers are expected to see design full circle, starting with the customer-facing angle; they are also more aware of business priorities than UI/UX designers. Generally, product designers are the ones who captain the entire design process as well, sort of like a design project manager.

What’s the one mistake startups make when they’re building a new product? 

I think it mostly boils down to not doing enough or no research at all. 

As a startup, you’re expected to move quick and fail fast. But if startups are not learning and researching the reason they failed, they’ll probably end up building products best suited just for family and friends.

Everyone says design is subjective, but are there objective ways to judge designs? What makes a good design or a bad one?

Design, in principle, is subjective, but in reality, good design is objective. 

I read somewhere that the Starship rocket that SpaceX launched was initially meant to have a round top. Elon Musk said he told his team to make the starship more pointy because of a scene from the movie The Dictator; he was asked if pointiness gives Starship an aerodynamic edge. He said, “It’s arguably slightly worse, but it looks cooler.”

The story illustrates someone altering a design based on a subjective feeling, but the new design didn’t change the core function/problem the rocket was intended to do. And that’s good design in itself; one or more designers trying to solve a specific problem relating to the use/user. 

What’s one thing entry-level product designers should know?

You have got to put in the time and not just play around in Figma. 

Read! Expand your mind. Your biggest asset is your brain and ability to solve problems first before your beautiful UI design.

What (singular) achievement are you most proud of?

My work at Korapay definitely stands out, especially the checkout. Building the foundations for it, reiterating and seeing those iterations gradually improves people’s experiences and improve the business itself.

What’s something you love doing that you’re terrible at? And something you really do not like doing that you’re great at?

I love riding bicycles but I suck at it, maybe because I haven’t given it enough time. Because of recency bias, I’d say I’m great at throwing good parties.

VODACOM SHARED INFLATED NUMBERS WITH INVESTORS

In its 2020 annual report, Vodacom told investors that its mobile gaming platform, PlayInc, had grown to 883,000 subscribers.

What the mobile network provider omitted from the report is that a large number of paying customers were fraudulently subscribed to the service.

The backstory

According to MyBroadBand, an independent industry investigation involving hundreds of thousands of SIM cards blew the lid on mass-scale airtime theft from Vodacom customers.

It showed that fraudulent wireless application service providers (WASP) used a gateway developed by Vodacom to subscribe users to services without their permission.

Large amounts of money were stolen from Vodacom subscribers, but curiously the mobile operator downplayed the fraud and said its subscribers were protected against rogue wireless application service providers (WASPs).

Why did Vodacom stay quiet?

The fraudulent subscriptions involved many of Vodacom’s own content and entertainment services, which bolstered the revenue and subscriptions of its content services.

Information supplied to MyBroadband showed how Vodacom clients were subscribed to a slew of services without their permission.

According to a person familiar with the matter, Vodacom executives were aware of what was happening and even endorsed it.

It was only after numerous media reports from MyBroadband that the mobile operator decided to act.

The Vodacom PlayInc link

A good example of fraudulent subscriptions that inflated subscriber and revenue figures is Vodacom’s gaming platform, PlayInc.

Vodacom first mentioned PlayInc in its 2019 annual report, saying it made good progress in most of its chosen verticals in digital consumer services, including gaming (PlayInc).

A year later, Vodacom reported that it delivered 9.4% growth in content-related revenue, thanks to the “solid growth of Video Play, MyMuze, PlayInc, and sports”.

What surprised many people is that PlayInc had 883,000 subscribers. To sign up nearly a million subscribers shortly after launch sounded like a miraculous feat.

However, an investigation revealed that PlayInc and Vodacom Games featured prominently among fraudulent subscriptions during the period.

Zoom out: This won’t be the first time Vodacom has knowingly provided wrong information to investors. The mobile network is also accused of providing false information to shareholders about its Video Play streaming service which got discontinued last month.

CELL C RESCUE PLAN PUSHED BACK, AGAIN

South African mobile network provider Cell C’s recapitalisation rescue plan by majority shareholder Blue Label Telecoms has been pushed back again.

In its latest update on the transaction’s development, Blue Label said the binding long-form agreements for the recapitalisation of Cell C were expected to be completed in their entirety “shortly”.

“It is anticipated that the recapitalisation process, the completion of which has endured for longer than initially anticipated, is expected to close by mid-September 2022,” the company said.

Cell C’s bad debts

According to MyBroadband, the rescue transaction has suffered numerous delays since Cell C first revealed it was struggling to repay debtors and would recapitalise its balance sheet as part of a broader turnaround strategy.

In June 2021, sources close to the company first told Bloomberg it was “close” to completing a recapitalisation deal.

After several delays, the company finally managed to get the transaction approved by shareholders in early July 2022.

Initially, Blue Label said the transaction would be finalised in late July, but this was delayed to the end of August.

The transaction aims to restructure Cell C’s debt of roughly R7.3 billion.

Of this amount, $184,002,000 (R3.1 billion) is First Priority Senior Secured Notes that Cell C issued and was publicly listed.

The mobile network operator reported a loss of R2.4 billion ($143 million) between June 1, 2021 and May 31, 2022, according to Blue Label Telecoms annual results released on Thursday.

A case of a bad investment by Blue Label?

Blue Label’s wholly-owned subsidiary, The Prepaid Company, acquired a 45% stake in Cell C on August 2, 2017 for R5.5 billion ($328 million).

The acquisition formed part of a recapitalisation deal to rescue the company from its crippling debt.

Although Blue Label co-CEOs Brett and Mark Levy were optimistic about Cell C’s potential and expected a turnaround in its financial and operational performance, its problems continued.

Zoom out: Blue Label impaired its investment in Cell C to nil in May 2019 and no longer recognises the loss it makes in its overall financial results.

TC INSIGHTS: FUNDING TRACKER

This week, Egyptian ArabyAds, raised $30 million in a pre-Series B round from AfricInvest, a pan-African investment platform that manages multiple alternative asset classes such as private equity, venture capital, and private credit.

Here are the other deals this week:

• Cameroonian Taaply, a digital business card solution aimed at cutting down on carbon emissions in Africa, raised an initial funding round worth $500,000 from unnamed Investors.

• SubsBase, a subscription and revenue management platform, raised $2.4 million in seed funding led by Middle East and Africa-focused venture capital firm Global Ventures. Other participating investors are HALA Ventures, P1 Ventures, Plus Venture Capital (+VC), Plug and Play, Ingressive Capital, Camel Ventures, and existing investors Falak Startups and Arzan Venture Capital.

• Egypt-based edtech, OBM, raised an undisclosed six-digit amount from EdVentures in a second round of funding.

That’s it for this week!

Follow us on Twitter, Instagram, and LinkedIn for more funding announcements.

EVENT: THE FUTURE OF WORK

Around the world, rapid digitisation is impacting how, when and where people work. Today, people have increased access to tools that enhance their productivity and improve business output.

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• Femi Longe – Programme Director, Qala
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IN OTHER NEWS FROM TECHCABAL

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Pick n Pay becomes the first sub-Saharan African retailer to complete an all-in migration to AWS.

Here are the five NFT marketplaces you should know about. 

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