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, Vodacom’s 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, Airtel’s 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, OnMobile’s 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 OnMobile’s 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 haven’t 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.
Via The Citizen
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