A new technique can detect newer 4G ‘stingray’ cell phone snooping

Security researchers say they have developed a new technique to detect modern cell-site simulators.

Cell site simulators, known as “stingrays,” impersonate cell towers and can capture information about any phone in its range — including in some cases calls, messages and data. Police secretly deploy stingrays hundreds of times a year across the United States, often capturing the data on innocent bystanders in the process.

Little is known about stingrays, because they are deliberately shrouded in secrecy. Developed by Harris Corp. and sold exclusively to police and law enforcement, stingrays are covered under strict nondisclosure agreements that prevent police from discussing how the technology works. But what we do know is that stingrays exploit flaws in the way that cell phones connect to 2G cell networks.

Most of those flaws are fixed in the newer, faster and more secure 4G networks, though not all. Newer cell site simulators, called “Hailstorm” devices, take advantage of similar flaws in 4G that let police snoop on newer phones and devices.

Some phone apps claim they can detect stingrays and other cell site simulators, but most produce wrong results.

But now researchers at the Electronic Frontier Foundation have discovered a new technique that can detect Hailstorm devices.

Enter the EFF’s latest project, dubbed “Crocodile Hunter” — named after Australian nature conservationist Steve Irwin who was killed by a stingray’s barb in 2006 — helps detect cell site simulators and decodes nearby 4G signals to determine if a cell tower is legitimate or not.

Every time your phone connects to the 4G network, it runs through a checklist — known as a handshake — to make sure that the phone is allowed to connect to the network. It does this by exchanging a series of unencrypted messages with the cell tower, including unique details about the user’s phone — such as its IMSI number and its approximate location. These messages, known as the master information block (MIB) and the system information block (SIB), are broadcast by the cell tower to help the phone connect to the network.

“This is where the heart of all of the vulnerabilities lie in 4G,” said Cooper Quintin, a senior staff technologist at the EFF, who headed the research.

Quintin and fellow researcher Yomna Nasser, who authored the EFF’s technical paper on how cell site simulators work, found that collecting and decoding the MIB and SIB messages over the air can identify potentially illegitimate cell towers.

This became the foundation of the Crocodile Hunter project.

A rare public photo of a stingray, manufactured by Harris Corp. Image Credits: U.S. Patent and Trademark Office

Crocodile Hunter is open-source, allowing anyone to run it, but it requires a stack of both hardware and software to work. Once up and running, Crocodile Hunter scans for 4G cellular signals, begins decoding the tower data, and uses trilateration to visualize the towers on a map.

But the system does require some thought and human input to find anomalies that could identify a real cell site simulator. Those anomalies can look like cell towers appearing out of nowhere, towers that appear to move or don’t match known mappings of existing towers, or are broadcasting MIB and SIB messages that don’t seem to make sense.

That’s why verification is important, Quintin said, and stingray-detecting apps don’t do this.

“Just because we find an anomaly, doesn’t mean we found the cell site simulator. We actually need to go verify,” he said.

In one test, Quintin traced a suspicious-looking cell tower to a truck outside a conference center in San Francisco. It turned out to be a legitimate mobile cell tower, contracted to expand the cell capacity for a tech conference inside. “Cells on wheels are pretty common,” said Quintin. “But they have some interesting similarities to cell site simulators, namely in that they are a portable cell that isn’t usually there and suddenly it is, and then leaves.”

In another test carried out earlier this year at the ShmooCon security conference in Washington, D.C. where cell site simulators have been found before, Quintin found two suspicious cell towers using Crocodile Hunter: One tower that was broadcasting a mobile network identifier associated with a Bermuda cell network and another tower that didn’t appear to be associated with a cell network at all. Neither made much sense, given Washington, D.C. is nowhere near Bermuda.

Quintin said that the project was aimed at helping to detect cell site simulators, but conceded that police will continue to use cell site simulators for as long as the cell networks are vulnerable to their use, an effort that could take years to fix.

Instead, Quintin said that the phone makers could do more at the device level to prevent attacks by allowing users to switch off access to legacy 2G networks, effectively allowing users to opt-out of legacy stingray attacks. Meanwhile, cell networks and industry groups should work to fix the vulnerabilities that Hailstorm devices exploit.

“None of these solutions are going to be foolproof,” said Quintin. “But we’re not even doing the bare minimum yet.”


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A new technique can detect newer 4G ‘stingray’ cell phone snooping

Security researchers say they have developed a new technique to detect modern cell-site simulators.

Cell site simulators, known as “stingrays,” impersonate cell towers and can capture information about any phone in its range — including in some cases calls, messages and data. Police secretly deploy stingrays hundreds of times a year across the United States, often capturing the data on innocent bystanders in the process.

Little is known about stingrays, because they are deliberately shrouded in secrecy. Developed by Harris Corp. and sold exclusively to police and law enforcement, stingrays are covered under strict nondisclosure agreements that prevent police from discussing how the technology works. But what we do know is that stingrays exploit flaws in the way that cell phones connect to 2G cell networks.

Most of those flaws are fixed in the newer, faster and more secure 4G networks, though not all. Newer cell site simulators, called “Hailstorm” devices, take advantage of similar flaws in 4G that let police snoop on newer phones and devices.

Some phone apps claim they can detect stingrays and other cell site simulators, but most produce wrong results.

But now researchers at the Electronic Frontier Foundation have discovered a new technique that can detect Hailstorm devices.

Enter the EFF’s latest project, dubbed “Crocodile Hunter” — named after Australian nature conservationist Steve Irwin who was killed by a stingray’s barb in 2006 — helps detect cell site simulators and decodes nearby 4G signals to determine if a cell tower is legitimate or not.

Every time your phone connects to the 4G network, it runs through a checklist — known as a handshake — to make sure that the phone is allowed to connect to the network. It does this by exchanging a series of unencrypted messages with the cell tower, including unique details about the user’s phone — such as its IMSI number and its approximate location. These messages, known as the master information block (MIB) and the system information block (SIB), are broadcast by the cell tower to help the phone connect to the network.

“This is where the heart of all of the vulnerabilities lie in 4G,” said Cooper Quintin, a senior staff technologist at the EFF, who headed the research.

Quintin and fellow researcher Yomna Nasser, who authored the EFF’s technical paper on how cell site simulators work, found that collecting and decoding the MIB and SIB messages over the air can identify potentially illegitimate cell towers.

This became the foundation of the Crocodile Hunter project.

A rare public photo of a stingray, manufactured by Harris Corp. Image Credits: U.S. Patent and Trademark Office

Crocodile Hunter is open-source, allowing anyone to run it, but it requires a stack of both hardware and software to work. Once up and running, Crocodile Hunter scans for 4G cellular signals, begins decoding the tower data, and uses trilateration to visualize the towers on a map.

But the system does require some thought and human input to find anomalies that could identify a real cell site simulator. Those anomalies can look like cell towers appearing out of nowhere, towers that appear to move or don’t match known mappings of existing towers, or are broadcasting MIB and SIB messages that don’t seem to make sense.

That’s why verification is important, Quintin said, and stingray-detecting apps don’t do this.

“Just because we find an anomaly, doesn’t mean we found the cell site simulator. We actually need to go verify,” he said.

In one test, Quintin traced a suspicious-looking cell tower to a truck outside a conference center in San Francisco. It turned out to be a legitimate mobile cell tower, contracted to expand the cell capacity for a tech conference inside. “Cells on wheels are pretty common,” said Quintin. “But they have some interesting similarities to cell site simulators, namely in that they are a portable cell that isn’t usually there and suddenly it is, and then leaves.”

In another test carried out earlier this year at the ShmooCon security conference in Washington, D.C. where cell site simulators have been found before, Quintin found two suspicious cell towers using Crocodile Hunter: One tower that was broadcasting a mobile network identifier associated with a Bermuda cell network and another tower that didn’t appear to be associated with a cell network at all. Neither made much sense, given Washington, D.C. is nowhere near Bermuda.

Quintin said that the project was aimed at helping to detect cell site simulators, but conceded that police will continue to use cell site simulators for as long as the cell networks are vulnerable to their use, an effort that could take years to fix.

Instead, Quintin said that the phone makers could do more at the device level to prevent attacks by allowing users to switch off access to legacy 2G networks, effectively allowing users to opt-out of legacy stingray attacks. Meanwhile, cell networks and industry groups should work to fix the vulnerabilities that Hailstorm devices exploit.

“None of these solutions are going to be foolproof,” said Quintin. “But we’re not even doing the bare minimum yet.”


Send tips securely over Signal and WhatsApp to +1 646-755-8849 or send an encrypted email to: [email protected]

T-Mobile hit by phone calling, text message outage

T-Mobile appears to be having problems.

Customers are reporting that they can’t make or receive phone calls, although data appears to be unaffected. Some customers say that text messaging is also affected.

DownDetector, which collects outage reports from users, indicates that a major outage is underway. It’s not clear how widespread the issue is, but at the time of writing T-Mobile was trending across the United States on Twitter.

The outage appears to have started around 10am PT (1pm ET) on Monday.

DownDetector reporting outages across the U.S.

In our own tests in New York and Seattle, we found that making calls from a T-Mobile phone would fail almost immediately after placing the call. We also found that the cell service on our phones were intermittent, with bars occasionally dropping to zero or losing access to high-speed data.

In April, Sprint and T-Mobile completed its merger, valued at $26 billion, making the combined cell network the third largest carrier in the United States behind AT&T and Verizon.

A spokesperson for T-Mobile also did not immediately comment on the outage.

Other networks may also be experiencing downtime, per customer reports. But so far Verizon (which owns TechCrunch) and Sprint have not responded to a request for comment. An AT&T spokesperson said that the network is operating normally.

Widespread cell networks are rare but do happen. In 2017, CenturyLink had a network failure that affected all major U.S. carriers and 911 emergency services that rely on the fiber network to route calls. In some U.S. counties, officials sent out emergency alerts to cell phone users to warn that 911 services had been disrupted.

Updated to note that carrier-dependent text messaging also appears to be affected.

Africa Roundup: Africa’s tech ecosystem responds to COVID-19

In March, the virus gripping the world — COVID-19 — started to spread in Africa. In short order, actors across the continent’s tech ecosystem began to step up to stem the spread.

Early in March Africa’s coronavirus cases by country were in the single digits, but by mid-month those numbers had spiked leading the World Health Organization to sound an alarm.

“About 10 days ago we had 5 countries affected, now we’ve got 30,” WHO Regional Director Dr Matshidiso Moeti said at a press conference on March 19. “It’s has been an extremely rapid…evolution.” 

By the World Health Organization’s stats Tuesday there were 3671 COVID-19 cases in Sub-Saharan Africa and 87 confirmed deaths related to the virus — up from 463 cases and 8 deaths on March 18.

As the COVID-19 began to grow in major economies, governments and startups in Africa started measures to shift a greater volume of transactions toward digital payments and away from cash — which the World Health Organization flagged as a conduit for the spread of the coronavirus.

Africa’s leader in digital payment adoption — Kenya — turned to mobile-money as a public-health tool.

At the urging of the Central Bank and President Uhuru Kenyatta, the country’s largest telecom, Safaricom, implemented a fee-waiver on East Africa’s leading mobile-money product, M-Pesa, to reduce the physical exchange of currency.

The company announced that all person-to-person (P2P) transactions under 1,000 Kenyan Schillings (≈ $10) would be free for three months.

Kenya has one of the highest rates of digital finance adoption in the world — largely due to the dominance of M-Pesa  in the country — with 32 million of its 53 million population subscribed to mobile-money accounts, according to Kenya’s Communications Authority.

On March 20, Ghana’s central bank directed mobile money providers to waive fees on transactions of GH₵100 (≈ $18), with restrictions on transactions to withdraw cash from mobile-wallets.

Ghana’s monetary body also eased KYC requirements on mobile-money, allowing citizens to use existing mobile phone registrations to open accounts with the major digital payment providers, according to a March 18 Bank of Ghana release.

Growth in COVID-19 cases in Nigeria, Africa’s most populous nation of 200 million, prompted one of the country’s largest digital payments startups to act.

Lagos based venture Paga made fee adjustments, allowing merchants to accept payments from Paga customers for free — a measure “aimed to help slow the spread of the coronavirus by reducing cash handling in Nigeria,” according to a company release.

In March, Africa’s largest innovation incubator, CcHub, announced funding and engineering support to tech projects aimed at curbing COVID-19 and its social and economic impact.

The Lagos and Nairobi based organization posted an open application on its website to provide $5,000 to $100,000 funding blocks to companies with COVID-19 related projects.

CcHub’s CEO Bosun Tijani expressed concern for Africa’s ability to combat a coronavirus outbreak. “Quite a number of African countries, if they get to the level of Italy or the UK, I don’t think the system… is resilient enough to provide support to something like that,” Tijani said.

Cape Town based crowdsolving startup Zindi — that uses AI and machine learning to tackle complex problems — opened a challenge to the 12,000 registered engineers on its platform.

The competition, sponsored by AI4D, tasks scientists to create models that can use data to predict the global spread of COVID-19 over the next three months. The challenge is open until April 19, solutions will be evaluated against future numbers and the winner will receive $5,000.

Zindi will also sponsor a hackathon in April to find solutions to coronavirus related problems.

Image Credits: Sam Masikini via Zindi

On the digital retail front, Pan-African e-commerce company Jumia announced measures it would take on its network to curb the spread of COVID-19.

The Nigeria headquartered operation — with online goods and services verticals in 11 African countries — said it would donate certified face masks to health ministries in Kenya, Ivory Coast, Morocco, Nigeria and Uganda, drawing on its supply networks outside Africa.

The company has also offered African governments use of of its last-mile delivery network for distribution of supplies to healthcare facilities and workers.

Jumia is reviewing additional assets it can offer the public sector. “If governments find it helpful we’re willing to do it,” CEO Sacha Poignonnec told TechCrunch.

More Africa-related stories @TechCrunch

African tech around the ‘net

African turns to mobile payments as a tool to curb COVID-19

Africa is using digital finance as a means to stem the spread of COVID-19.

Governments and startups on the continent are implementing measures to shift a greater volume of payment transactions toward mobile money and away from cash — which the World Health Organization flagged as a conduit for the spread of the coronavirus.

It’s an option facilitated by the boom in fintech that’s occurred in Africa over the last decade. By several estimates, the continent is home to the largest share of the world’s unbanked population and has a sizable number of underbanked consumers and SMEs.

But because of that, fintech — and startups focused on financial inclusion — now receive the majority of VC funding annually in Africa, according to recent data.

As COVID-19 cases began to grow in the continent’s major economies last week, the continent’s leader in digital payment adoption — Kenya — turned to mobile-money as a public-health tool.

The country’s largest teleco, Safaricom, implemented a fee-waiver on East Africa’s leading mobile-money product, M-Pesa, to reduce the physical exchange of currency in response to COVID-19.

Image Credits: Flickr

The company announced that all person-to-person (P2P) transactions under 1,000 Kenyan Schillings (≈ $10) would be free for three months.

The move came after Safaricom met with the country’s Central Bank and per a directive from Kenya’s President Uhuru Kenyatta “to explore ways of deepening mobile-money usage to reduce risk of spreading the virus through physical handling of cash,” according to a release provided to TechCrunch from Safaricom.

Kenya has one of the highest rates of mobile-money adoption in the world, largely due to the dominance of M-Pesa in the country, which stands as Africa’s 6th largest economy. Across Kenya’s population of 53 million, M-Pesa has 20.5 million customers and a network of 176,000 agents.

M-PESA Sector Stats 4Q 2019 per Kenya’s Communications Authority

With all major providers in Kenya there are 32 million subscribers, which means roughly 60% of the country’s population has access to mobile-money.

Ghana is also using digital finance as a monetary policy lever to reduce the spread of COVID-19

On March 20, the West African country’s central bank directed mobile money providers to waive fees on transactions of GH₵100 (≈ $18), with restrictions on transactions to withdraw cash from mobile-wallets.

Ghana’s monetary body also eased KYC requirements on mobile-money, allowing citizens to use existing mobile phone registrations to open accounts with the major digital payment providers, according to a March 18 Bank of Ghana release.

The trajectory of the coronavirus in Africa is prompting more countries and tech companies to include mobile finance as part of a broader response. The continent’s COVID-19 cases by country were in the single digits until recently, but those numbers spiked last week leading the World Health Organization to sound an alarm.

“About 10 days ago we had 5 countries affected, now we’ve got 30,” WHO Regional Director Dr Matshidiso Moeti said at a press conference Thursday. “It’s has been an extremely rapid…evolution.” 

Source; World Health Organization

By the World Health Organization’s stats Monday there were 1321 COVID-19 cases in Sub-Saharan Africa and 34 confirmed deaths related to the virus — up from 463 cases and 10 deaths last Wednesday.

The country with 40% of the region’s cases is South Africa, which declared a national disaster last week, banned public gatherings and announced travel restrictions on the U.S.

Unlike Ghana and Kenya, the government in Africa’s second largest economy hasn’t issued directives toward mobile payments, but the situation with COVID-19 is pushing fintech startups to act, according to Yoco CEO Katlego Maphai.

The Series B stage venture develops and sells digital payment hardware and services for small businesses on a network of 80,000 clients that processes roughly $500 million annually.

Image Credits: Jake Bright

With the growth in coronavirus cases in South Africa, Yoco has issued a directive to clients to encourage customers to use the contactless payment option on its point of sale machines. The startup has also accelerated its development of a remote payment product, that would enable transfers on its client network via a weblink.

“This is an opportunity to start driving contactless adoption,” Maphai told TechCrunch on a call from Cape Town.

In Nigeria — home to Africa’s largest economy and population of 200 million — the growth of COVID-19 cases has shifted the country toward electronic payments and prompted one of the country’s largest digital payments startups to act.

Lagos based venture Paga made fee adjustments, allowing merchants to accept payments from Paga customers for free — a measure “aimed to help slow the spread of the coronavirus by reducing cash handling in Nigeria,” according to a company release.

Parts of Lagos — which is connected to Nigeria’s largest commercial hub of Lagos State — have begun to require digital payments in response to COVID-19, according to Paga’s CEO Tayo Oviosu .

“We’re seeing some stores that are saying they are not accepting cash anymore,” he told TechCrunch on a call from Lagos.

Cash only Nigeria Paga

Image Credits: Paga

Paga already offers free P2P transfers on its multi-channel network of 24,840 agents and 14 million customers. The startup, that recently expanded to Mexico and partnered with Visa, will also allow free transfers up to roughly 5000 Naira (≈ $15) from customer accounts to bank accounts, to encourage more digital payments use in Nigeria.

Paga’s CEO believes the current COVID-19 crisis will encourage more digital finance adoption in Nigeria, which has shown a cash-is-king reluctance by parts of the population to use mobile payments.

“I think it will help move the needle, but it won’t be the final straw that breaks the camel’s back,” he said.

Time and research will determine if efforts of African governments and tech companies to encourage digital payments over physical currency yield results in halting the spread of COVID-19 on the continent.

It is a unique case-study of mobile finance in Africa being employed to impact human behavior during a public health emergency.

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.