Africa’s top mobile phone seller Transsion lists in Chinese IPO

Chinese mobile-phone and device maker Transsion has listed in an IPO on Shanghai’s STAR Market, a Transsion spokesperson confirmed to TechCrunch. 

Headquartered in Shenzhen, Transsion is a top-seller of smartphones in Africa under its Tecno brand. The company has also started to support venture funding of African startups.

Transsion issued 80 million A-shares at an opening price of 35.15 yuan (≈ $5.00) to raise 2.8 billion yuan (or ≈ $394 million).

A-shares are the common shares issued by mainland Chinese companies and are normally available for purchases only by mainland citizens. 

Transsion’s IPO prospectus is downloadable (in Chinese) and its STAR Market listing application available on the Shanghai Stock Exchange’s website.

STAR is the Shanghai Stock Exchange’s new Nasdaq-style board for tech stocks that went live in July with some 25 companies going public.

Transsion plans to spend 1.6 billion yuan (or $227 million) of its STAR Market raise on building more phone assembly hubs and around 430 million yuan ($62 million) on research and development, including a mobile phone R&D center in Shanghai, a company spokesperson said.

To support its African sales network, Transsion maintains a manufacturing facility in Ethiopia.  The company recently announced plans to build an industrial park and R&D facility in India for manufacture of phones to Africa.

The IPO comes after Transsion announced its intent to go public and filed its first docs with the Shanghai Stock Exchange in April.

Listing on STAR Market puts Transsion on China’s new exchange — seen as an extension of Beijing’s ambition to become a hub for tech startups to raise public capital. Chinese regulators lowered profitability requirements for the STAR Market, which means pre-profit ventures can list.

China Star Market Opening July 2019 1

Transsion’s IPO comes when the company is actually in the black. The firm generated 22.6 billion yuan ($3.29 billion) in revenue in 2018, up from 20 billion yuan a year earlier. Net profit for the year slid to 654 million yuan, down from 677 million yuan in 2017, according to the firm’s prospectus.

Transsion sold 124 million phones globally in 2018, per company data. In Africa, Transsion holds 54% of the feature phone market — through its brands Tecno, Infinix and Itel — and in smartphone sales is second to Samsung and before Huawei, according to International Data Corporation stats.

Transsion has R&D centers in Nigeria and Kenya and its sales network in Africa includes retail shops in Nigeria, Kenya, Tanzania, Ethiopia and Egypt. The company also attracted attention for being one of the first known device makers to optimize its camera phones for African complexions.

On a 2019 research trip to Addis Ababa, TechCrunch learned the top entry-level Tecno smartphone was the W3, which lists for 3,600 Ethiopian Birr, or roughly $125.

In Africa, Transsion’s ability to build market share and find a sweet spot with consumers on price and features gives it prominence in the continent’s booming tech scene.

Africa already has strong mobile-phone penetration, but continues to undergo a conversion from basic USSD phones, to feature phones, to smartphones.

Smartphone adoption on the continent is low, at 34%, but expected to grow to 67% by 2025, according to GSMA.

This, added to an improving internet profile, is key to Africa’s tech scene. In top markets for VC and startup origination — such as Nigeria, Kenya, and South Africa — thousands of ventures are building business models around mobile-based products and digital applications.

If Transsion’s IPO enables higher smartphone conversion on the continent, that could enable more startups and startup opportunities — from fintech to VOD apps.

Another interesting facet to Transsion’s IPO is its potential to create greater influence from China in African tech, in particular as the Shenzhen company moves more definitely toward venture investing.

In August, Transsion funded Future Hub teamed up with Kenya’s Wapi Capital to source and fund early-stage African fintech startups.

China’s engagement with African startups has been light compared to China’s deal-making on infrastructure and commodities — further boosted in recent years as Beijing pushes its Belt and Road plan.

Transsion’s IPO is the second event this year — after Chinese owned Opera’s venture spending in Nigeria — to reflect greater Chinese influence and investment in the continent’s digital scene.

So in coming years, China could be less known for building roads and bridges in Africa and more for selling smartphones and providing VC for African startups.

T-Mobile customers report outage, can’t make calls or send text messages

T-Mobile customers across the U.S. say they can’t make calls or send text messages following an apparent outage — although mobile data appears to be unaffected.

We tested with a T-Mobile phone in the office. Both calls to and from the T-Mobile phone failed. When we tried to send a text message, it said the message could not be sent. The outage began around 3pm PT (6pm ET).

Users took to social media to complain about the outage. It’s not clear how many customers are affected, but users across the U.S. have said they are affected.

A spokesperson for T-Mobile did not immediately comment, but a T-Mobile support account said the cell giant has “engaged our engineers and are working on a resolution.”

T-Mobile is the third largest cell carrier after Verizon (which owns TechCrunch) and AT&T. The company had its proposed $26.5 billion merger with Sprint approved by the Federal Communications Commission, despite a stream of state attorneys general lining up to block the deal.

Africa’s top mobile phone seller Transsion to list in Chinese IPO

Chinese mobile-phone and device maker Transsion will list in an IPO on Shanghai’s STAR Market,  Transsion confirmed to TechCrunch. 

The company—which has a robust Africa sales network—could raise up to 3 billion yuan (or $426 million).

“The company’s listing-related work is running smoothly. The registration application and issuance process is still underway, with the specific timetable yet to be confirmed by the CSRC and Shanghai Stock Exchange,” a spokesperson for Transsion’s Office of the Secretary to the Chairman told TechCrunch via email.

Transsion’s IPO prospectus was downloadable (in Chinese) and its STAR Market listing application available on the Shanghai Stock Exchange’s website.

STAR is the Shanghai Stock Exchange’s new Nasdaq-style board for tech stocks that also went live in July with some 25 companies going public. 

Headquartered in Shenzhen—where African e-commerce unicorn Jumia also has a logistics supply-chain facility—Transsion is a top-seller of smartphones in Africa under its Tecno brand.

The company has a manufacturing facility in Ethiopia and recently expanded its presence in India.

Transsion plans to spend the bulk of its STAR Market raise (1.6 billion yuan or $227 million) on building more phone assembly hubs and around 430 million yuan ($62 million) on research and development,  including a mobile phone R&D center in Shanghai—a company spokesperson said. 

Transsion recently announced a larger commitment to capturing market share in India, including building an industrial park in the country for manufacture of phones to Africa.

The IPO comes after Transsion announced its intent to go public and filed its first docs with the Shanghai Stock Exchange in April. 

Listing on the STAR Market will put Transsion on the freshly minted exchange seen as an extension of Beijing’s ambition to become a hub for high-potential tech startups to raise public capital. Chinese regulators lowered profitability requirements, for the exchange, which means pre-profit ventures can list.

Transsion’s IPO process comes when the company is actually in the black. The firm generated 22.6 billion yuan ($3.29 billion) in revenue in 2018, up from 20 billion yuan from a year earlier. Net profit for the year slid to 654 million yuan, down from 677 million yuan in 2017, according to the firm’s prospectus.

Transsion sold 124 million phones globally in 2018, per company data. In Africa, Transsion holds 54% of the feature phone market—through its brands Tecno, Infinix, and Itel—and in smartphone sales is second to Samsung and before Huawei, according to International Data Corporation stats.

Transsion has R&D centers in Nigeria and Kenya and its sales network in Africa includes retail shops in Nigeria, Kenya, Tanzania, Ethiopia and Egypt. The company also attracted attention for being one of the first known device makers to optimize its camera phones for African complexions.

On a recent research trip to Addis Ababa, TechCrunch learned the top entry-level Tecno smartphone was the W3, which lists for 3600 Ethiopian Birr, or roughly $125.

In Africa, Transsion’s ability to build market share and find a sweet spot with consumers on price and features gives it prominence in the continent’s booming tech scene.

Africa already has strong mobile-phone penetration, but continues to undergo a conversion from basic USSD phones, to feature phones, to smartphones.

Smartphone adoption on the continent is low, at 34 percent, but expected to grow to 67 percent by 2025, according to GSMA.

This, added to an improving internet profile, is key to Africa’s tech scene. In top markets for VC and startup origination—such as Nigeria, Kenya, and South Africa—thousands of ventures are building business models around mobile-based products and digital applications.

If Transsion’s IPO enables higher smartphone conversion on the continent that could enable more startups and startup opportunities—from fintech to VOD apps.

Another interesting facet to Transsion’s IPO is its potential to create greater influence from China in African tech, in particular if the Shenzhen company moves strongly toward venture investing.

Comparatively, China’s engagement with African startups has been light compared to China’s deal-making on infrastructure and commodities—further boosted in recent years as Beijing pushes its Belt and Road plan.

Transsion’s IPO move is the second recent event—after Chinese owned Opera’s big venture spending in Nigeria—to reflect greater Chinese influence and investment in the continent’s digital scene.

So in coming years, China could be less known for building roads, bridges, and buildings in Africa and more for selling smartphones and providing VC for African startups.

A closer look at China’s smartphone market

In February 2013, China surpassed the United States to become the world’s largest smartphone market. More than half a decade on, it still proves an elusive target for international sellers. A glance at reports from the past several shows reveals the top spots dominated by homegrown names: Huawei, Vivo, Oppo, Xiaomi.

Combined, the big four made up roughly 84 percent of the nearly 100 million smartphones shipped last quarter, per new numbers from Canalys. Even international giants like Apple and Samsung have trouble cracking double-digit market share. Of the two, Apple has generally done better, with around six percent of the market — around six times Samsung’s share.

But Apple’s struggles have been very visible nonetheless, as the company has invested a good deal of its own future success into the China market. At the beginning of the year, the company took the rare action of lowering its guidance for Q1, citing China as the primary driver.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Tim Cook said in a letter to shareholders at the time. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

When it came time to report, things were disappointing as expected. The company’s revenue in the area dropped nearly $5 billion, year over year. On the tail of two rough quarters, things picked up a bit for Apple in the country. This week, Tim Cook noted “great improvement” in Greater China.

China’s Vivo is eyeing smartphone users in Africa and Middle East

Africa’s mobile phone industry has in recent times been dominated by Transsion, a Shenzhen-based company that is little known outside the African continent and is gearing up for an initial public offering in China. Now, its Chinese peer Vivo is following its shadow to this burgeoning part of the world with low-cost offerings.

Vivo, the world’s fifth-largest smartphone maker, announced this week that it’s bringing its budget-friendly Y series smartphones into Nigeria, Kenya and Egypt while the line of products is already available in Morocco.

It’s obvious that Vivo wants in on an expanding market as its home country China experiences softening smartphone sales. Despite a global slowdown, Africa posted annual growth in smartphone shipments last year for the first time since 2015 thanks in part to the abundance of entry-level products, according to market research firm IDC.

Affordability is the key driver for any smartphone brands that want to grab a slice of the African market. That’s what vaulted Transsion into a top dog on the continent where it sells feature phones for less than $20. Vivo’s Y series smartphones, which are priced as little as $170, are vying for a place with Transsion, Samsung and Huawei that have respective unit shares of 34.3%, 22.6%, and 9.9% in Africa last year.

The Middle East is also part of Vivo’s latest expansion plan despite the region’s recent slump in smartphone volumes. The Y series, which comes in several models sporting features like the 89% screen-to-body ratio or the artificial intelligence-powered triple camera, is currently for sale in the United Arab Emirates and will launch in Saudi Arabia and Bahrain in the coming months.

Vivo’s new international push came months after its sister company Oppo, also owned by BBK, made a similar move into the Middle East and Africa by opening a new regional hub in Dubai.

“Since our first entry into international markets in 2014, we have been dedicated to understanding the needs of consumers through in-depth research in an effort to bring innovative products and services to meet changing lifestyle needs,” said Vivo’s senior vice president Spark Ni in a statement.

“The Middle East and Africa markets are important to us, and we will tailor our approach with consumers’ needs in mind. The launch of Y series is just the beginning. We look forward to bringing our other widely popular products beyond Y series to consumers in the Middle East and Africa very soon,” the executive added.

How to protect your cell phone number and why you should care

Getty Images

Assuming you have your strong passwords in place and your two-factor authentication set up, you think your accounts are now safe? Think again. There’s much more to be done.

You might think your Social Security or bank account numbers are the most sensitive digits in your life. Nowadays, hackers can do far more damage with little effort using just your cell phone number. But unlike your Social Security number, you’re far less likely to keep your cell phone number a secret — otherwise nobody can contact you!

Whether you’re an AT&T, Verizon, Sprint or T-Mobile customer, every cell phone number can be a target for hackers. And it takes remarkably little effort to wreak havoc to your online life.

Why you need to protect your phone number

Your cell phone number is a single point of failure.

Think about it. You use your cell phone number all the time. You use it when you sign up to sites and services, and sometimes you’ll use it to log into an app or a game on your phone. Your phone number can be used to reset your account if you forget your password. And, you use it for two-factor authentication to securely login to your accounts.

If someone steals your phone number, they become you — for all intents and purposes. With your phone number, a hacker can start hijacking your accounts one by one by having a password reset sent to your phone. They can trick automated systems — like your bank — into thinking they’re you when you call customer service. And worse, they can use your hijacked number to break into your work email and documents — potentially exposing your employer up to data theft.

Just think of every site and service that has your phone number. That’s why you need to protect your phone number.

How do hackers steal cell phone numbers?

It’s easier than you might think. Phone numbers can be found anywhere – thanks in part to so many data breaches.

Often, hackers will find the cell phone number of their target floating around the internet (or from a phone bill in the garbage), and call up their carrier impersonating the customer. With a few simple questions answered — often little more than where a person lives or their date of birth, they ask the customer service representative to “port out” the phone number to a different carrier or a SIM card.

That’s it. As soon as the “port out” completes, the phone number activates on an attacker’s SIM card, and the hacker can send and receive messages and make calls as if they were the person they just hacked.

In most cases, the only sign that it happened is if the victim suddenly loses cell service for no apparent reason.

From there, it’s as simple as initiating password resets on accounts associated with that phone number. Facebook, Gmail, Twitter — and more. A hacker can use your hijacked phone number to steal all of your cryptocurrency, take over your vanity Instagram username or maliciously delete all of your data.

You can read what happened to TechCrunch’s own John Biggs when his phone number was hijacked.

In the worst cases, it can be difficult or impossible to get your phone number back — let alone the accounts that get broken into. Your best bet is to make sure it never happens in the first place.

What you can do to protect your phone number

Just like you can apply two-factor authentication to your online accounts, you can add a secondary security code to your cell phone account, too.

You can either call up customer services or do it online. (Many feel more reassured by calling up and talking to someone.) You can ask customer service, for example, to set a secondary password on your account to ensure that only you — the account holder — can make any changes to the account or port out your number.

Every carrier handles secondary security codes differently. You may be limited in your password, passcode or passphrase, but try to make it more than four to six digits. And make sure you keep a backup of the code!

For the major carriers:

If your carrier isn’t listed, you might want to check if they employ a similar secondary security code to your account to prevent any abuse. And if they don’t, maybe you should port out your cell phone number to a carrier that does.

Check out our full Cybersecurity 101 guides here.

How to protect your cell phone number and why you should care

Getty Images

Assuming you have your strong passwords in place and your two-factor authentication set up, you think your accounts are now safe? Think again. There’s much more to be done.

You might think your Social Security or bank account numbers are the most sensitive digits in your life. Nowadays, hackers can do far more damage with little effort using just your cell phone number. But unlike your Social Security number, you’re far less likely to keep your cell phone number a secret — otherwise nobody can contact you!

Whether you’re an AT&T, Verizon, Sprint or T-Mobile customer, every cell phone number can be a target for hackers. And it takes remarkably little effort to wreak havoc to your online life.

Why you need to protect your phone number

Your cell phone number is a single point of failure.

Think about it. You use your cell phone number all the time. You use it when you sign up to sites and services, and sometimes you’ll use it to log into an app or a game on your phone. Your phone number can be used to reset your account if you forget your password. And, you use it for two-factor authentication to securely login to your accounts.

If someone steals your phone number, they become you — for all intents and purposes. With your phone number, a hacker can start hijacking your accounts one by one by having a password reset sent to your phone. They can trick automated systems — like your bank — into thinking they’re you when you call customer service. And worse, they can use your hijacked number to break into your work email and documents — potentially exposing your employer up to data theft.

Just think of every site and service that has your phone number. That’s why you need to protect your phone number.

How do hackers steal cell phone numbers?

It’s easier than you might think. Phone numbers can be found anywhere – thanks in part to so many data breaches.

Often, hackers will find the cell phone number of their target floating around the internet (or from a phone bill in the garbage), and call up their carrier impersonating the customer. With a few simple questions answered — often little more than where a person lives or their date of birth, they ask the customer service representative to “port out” the phone number to a different carrier or a SIM card.

That’s it. As soon as the “port out” completes, the phone number activates on an attacker’s SIM card, and the hacker can send and receive messages and make calls as if they were the person they just hacked.

In most cases, the only sign that it happened is if the victim suddenly loses cell service for no apparent reason.

From there, it’s as simple as initiating password resets on accounts associated with that phone number. Facebook, Gmail, Twitter — and more. A hacker can use your hijacked phone number to steal all of your cryptocurrency, take over your vanity Instagram username or maliciously delete all of your data.

You can read what happened to TechCrunch’s own John Biggs when his phone number was hijacked.

In the worst cases, it can be difficult or impossible to get your phone number back — let alone the accounts that get broken into. Your best bet is to make sure it never happens in the first place.

What you can do to protect your phone number

Just like you can apply two-factor authentication to your online accounts, you can add a secondary security code to your cell phone account, too.

You can either call up customer services or do it online. (Many feel more reassured by calling up and talking to someone.) You can ask customer service, for example, to set a secondary password on your account to ensure that only you — the account holder — can make any changes to the account or port out your number.

Every carrier handles secondary security codes differently. You may be limited in your password, passcode or passphrase, but try to make it more than four to six digits. And make sure you keep a backup of the code!

For the major carriers:

If your carrier isn’t listed, you might want to check if they employ a similar secondary security code to your account to prevent any abuse. And if they don’t, maybe you should port out your cell phone number to a carrier that does.

Check out our full Cybersecurity 101 guides here.

Weak passwords let a hacker access internal Sprint staff portal

It’s not been a great week for cell carriers. EE was hit with two security bugs and T-Mobile admitted a data breach. Now, Sprint is the latest phone giant to admit a security lapse, TechCrunch has learned.

Using two sets of weak, easy-to-guess usernames and passwords, a security researcher accessed an internal Sprint staff portal. Because the portal’s log-in page didn’t use two-factor authentication, the researcher — who did not want to be named — navigated to pages that could have allowed access customer account data.

Sprint is the fourth largest US cell network with 55 million customers.

TechCrunch passed on details and screenshots of the issue to Sprint, which confirmed the findings in an email.

“After looking into this, we do not believe customer information can be obtained without successful authentication to the site,” said a Sprint spokesperson.

“Based on the information and screenshots provided, legitimate credentials were utilized to access the site. Regardless, the security of our customers is a top priority, and our team is working diligently to research this issue and immediately changed the passwords associated with these accounts,” the spokesperson said.

We’re not disclosing the passwords, but suffice to say they were not difficult to guess.

The first set of credentials let the researcher into a prepaid Sprint employee portal that gave staff access to Sprint customer data — as well as Boost Mobile and Virgin Mobile, which are Sprint subsidiaries. The researcher used another set of credentials to gain access to a part of the website, which he said gave him access to a portal for customer account data.

A screenshot shared with TechCrunch showed that anyone with access to this portal allowed the user to conduct a device swap, change plans and add-ons, replenish a customer’s account, check activation status and view customer account information.

A screenshot showing an internal customer portal.

All a user would need is a customer’s mobile phone number and a four-digit PIN number, which could be bypassed by cycling through every possible combination.

The researcher said there were no limits on the number of PIN attempts.

Account PIN numbers are highly sensitive as they can be used to transfer ownership from one person to another. That gives hackers an easier route to carry out a “SIM swapping” attack, which target and hijack cell phone numbers. Hackers use a mix of techniques — such as calling up customer service and impersonating a customer, all the way to recruiting telecom employees to hijack SIM cards from the inside. In hijacking phone numbers, hackers can break into online accounts to steal vanity Instagram usernames, and intercept codes for two-factor authentication to steal the contents of cryptocurrency wallets.

SIM swapping is becoming a big, albeit illegal business. An investigation by Motherboard revealed that hundreds of people across the US have had their cellphone number stolen over the past few years. TechCrunch’s John Biggs was one such victim.

But the authorities are catching up to the growing threat of SIM swapping. Three SIM swappers have been arrested in the past few weeks alone.

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