MTN eyes 49% NetOne stake (South Africa, Zimbabwe)
State-owned mobile operator NetOne’s MD Reward Kangai has revealed that the company is in talks with South Africa’s MTN and other African mobile firms about selling a 49% stake.
NetOne is the smallest mobile operator by subscriber numbers in Zimbabwe, lagging behind Econet Wireless and Telecel, a local unit of Egypt’s Orascom Telecom.
Reward Kangai valued NetOne at between $500 million and $800 million. He did not disclose the other African operators. The company expects an agreement during the second quarter of the year. It is expected that NetOne’s subscriber base will increase to 2.5 million this year from 1.6 million in 2010.
He added that the company was hindered by the country’s telecommunications laws from selling more than 49% of its shares to a strategic investor.
Zimbabwe has a low mobile penetration rate, which makes it attractive to large mobile operators seeking to expand their footprint on the African continent.
He also stated that NetOne’s turnover would double to $200 million in 2011 boosted by an increase in subscribers and a recovering economy. It (low mobile penetration) presents an opportunity for the company to grow, which also presents business opportunity for the strategic partner.
Econet’s network expansion started by Ericsson (Zimbabwe)
www.WirelessFederation.com/news: A new phase of a network expansion project has been started by Swedish technology provider Ericsson for Econet Wireless Zimbabwe to allow the cellco to increase its capacity to approximately five million users by August 2010. The new network will also ensure that central Harare has full 3G coverage by the end of this month.
This network expansion is a part of a three-year frame agreement that was signed last year as per which Econet made Ericsson responsible for expansion of the core and access 2G and 3G networks as well as business support system delivery.
Transport and transmission technologies and services have been proved by Ericsson such as system integration and business consultancy.
Zain’s takeover of V- Mobile challenged by Econet (Nigeria)
www.WirelessFederation.com/news: The Chief Justice of the Nigerian Federal High Court has appointed of the final member of an international tribunal to review the sale of V-Mobile Nigeria to Middle East headquartered mobile phone operator Zain, this week. The appointment has been done despite opposition by founding shareholder Econet Wireless which claimed that its pre-emption rights were breached when the sale was concluded.
In a statement issued by Econet, it had been notified of the appointment of the panel and that the tribunal was intending to commence hearings as early as the end of this month. Econet has also claimed that its pre-emption rights in respect of shares had been breached when Econet’s predominantly Nigerian partners decided to sell their shares in V-Mobile to Zain in 2006.
As a member of the consortium of the investors, Econet wireless launched Nigeria’s first GSM mobile network operation in 2001 and it has grown into country’s second largest operator, with about 20 million customers.
Econet attempt to prevent the sale of the shares to Zain through the UK courts failed as the judge ruled that the UK was not the appropriate place for such legal proceedings as the matter was more closely connected with Nigeria. After the decision, Econet has commenced ongoing legal proceedings in the Nigerian courts.
The arbitration proceedings which generally take approximately 18 months to conclude will be undertaken by the tribunal using the rules of the United Nations Commission on International Trade Law, known as UNCITRAL. London Court of International Arbitration (LCIA) tribunal in a yet further arbitration concerning the disputed sale has ruled that Zain was under an obligation, if it involved itself in the Econet transaction, to act in good faith so as to ensure the minimum conflict with Econet possible.
Nigerian proceedings recently included the decision and will be a key document in Econet’s claim in the Nigerian courts going forward.
Ecoweb launches WiMAX wireless broadband network (Zimbabwe)
www.WirelessFederation.com/news: Testing and optimization of a WiMAX wireless broadband network has been successfully completed by Zimbabwe’s largest mobile operator Econet Wireless, ISP Ecoweb. The network spans more than 100 base stations in the country’s main business centers.
According to firm’s general manager, Isaac Chaza, the WiMAX network is capable of carrying IP-based mobile, nomadic and fixed voice, video and data services, whilst the technology is also suitable for use as backhaul for Econet’s mobile network, and is aimed at meeting ‘enormous’ demand for data services.
Providing a high speed mobile internet access platform for businesses, public sector clients and consumers using laptop/netbook PCs and smartphones is the main aim behind the deployment of WiMAX across the country. Investment of USD300 million will be made by Econet to expand its voice and data services.
Econet subscribers’ base grows by 233% (Zimbabwe)
www.WirelessFederation.com/news: The mobile subscriber base of Econet Wireless Zimbabwe has been claimed to be increased by 233%, from 1.2 million to four million in the twelve months ended March 31, 2010. The result of the financial year to the end of February 2010 has also been announced by the GSM operator.
Econet recorded annual revenues of USD362.8 million, up from USD88 million in the previous year, posted EBITDA of USD179.3 million up from USD27 million a year before, operating profit of USD158.2 million and net profit attributable to shareholders of USD114.6 million.
CAPEX was USD160 million, up from USD124 million the year before and a CAPEX of USD300 million has been announced for the current financial year ending February 2011. Two new switching centers have been commissioned by Econet in the twelve months to end-February 2010. Two switches are now operating in Harare and one in Bulawayo.
Zain- Bharti deal might be reversed due to Econet (Nigeria)
www.WirelessFederation.com/news: With an aim to resolve Zain’s Nigerian unit ownership situation, Econet Wireless International has expressed its intentions to get Zain’s deal with Indian firm Bharti Airtel reversed.
According to Goldman Sachs analyst Hugh McCaffrey, Econet management intends to reverse the transaction and exercise its right of first refusal on the 65% stake in the Nigerian asset, however, an issue that may potentially affect the closure of the transaction is the ownership dispute from minority shareholders of the Nigerian unit.
The ownership dispute might lead to the surrender of ownership rights in the Nigerian asset by Indian telco, Bharti Airtel. Econet has already announced that Zain’s Nigerian assets should not be counted for sale until the shareholding is resolved.
Goldman Sachs has also cited that Econet management would also likely claim damages against Zain and if successful, in a worst-case scenario, Bharti would have to relinquish ownership rights over the Nigerian assets and perhaps renegotiate the amount it paid to Zain to acquire its African assets.
MTN, NetOne deal under clouds (Africa)
www.WirelessFederation.com/news: Danger seems to be looming on the planned acquisition of a 49% stake in Zimbabwean cellco NetOne by South African telco MTN. The deal seems to be collapsing after it has been revealed that some members of the government are opposed to its privatization. Growing discomfort over the sale has also been witnessed by the government.
According to Finance Minister Tendai Biti, the government believes that NetOne’s poor performance is a management issue the mobile network business was ‘like printing money,’ and that there was no reason for NetOne to be in its current state when rival cellco Econet Wireless Zimbabwe was ‘making USD65 million every month.
Although, NetOne was the first telecom operator to be launched in the country it is still the smallest wireless network operator by subscribers. At the end of 2009 the company claimed approximately 10% of the country’s wireless subscriber market.
Zain’s legal dispute with Nigerian assets might delay Bharti deal
www.WirelessFederation.com/news: The pending legal dispute over the ownership of Zain on its Nigerian assets might lead to the delay in the selling of the African assets by the company to Indian telco, Bharti Airtel. Econet Wireless Holdings and Zain have been undergoing a long dispute and the former has claimed a right of first refusal when a collection of shareholders sold their stakes to Zain in 2006.
5% of Vee Mobile which trades as Zain Nigeria is still owned by Econet and since the sale of the network first suggested back in 2003, it has been fighting attempts to bypass its claimed rights to buy out shareholders. In 2003 itself, due to Econet’s pressure, South Africa’s Vodacom retreat its decision to buy a controlling stake in the company.
After that, Delta State and First Bank along with various shareholders sold their stakes to Celtel Wireless which is now a Zain subsidiary, in September 2005 and since then the sale has been in dispute ever.
Liquid Telecom plans new southern African fibre network
www.WirelessFederation.com/news: A plan to build an international and national fibre-optic transmission network has been revealed by Liquid Telecom, a majority-owned subsidiary of Zimbabwean cellco Econet Wireless. The company’s aim include building its own links to international submarine fibre-optic cables and a 7,500km domestic fibre networks linking all major cities.
Besides, the Liquid telecom also aims to build fibre networks in Harare and Bulawayo; and proposed metro networks in two other southern African countries. Huawei Technologies of China is building the network infrastructure.
According to Liquid’s CEO Nic Rudnick, most of the traffic on the network would be Econet’s initially, but that third-party traffic could account for the majority in due course.
Africa: Multinational Mobile Operators Increase Stake in Continent
Jonah Iboma examines the increasing penetration of Africa by global players and its impact on competition Mobile telephony sector in Africa has increasingly witnessed acquisitions. This had led to the emergence of multinational and pan-regional players dominating the sector and increasing their ability to compete in the market with other global players.
The latest is the purchase of controlling stake in Vmobile Nigeria by Celtel International and MTN’s acquisition of Investcom International, a telecoms group with operations in six African countries besides its coverage in the Middle East.
Also, Vodacom has operations in five countries- Mozambique, Madagascar, South Africa Tanzania and Lesotho. Though the number of countries it operates in may seem small compared to Celtel and MTN, Vodacom has not hidden its intention to find an entry into the Nigerian market after the failed acquisition bid for the then Econet Wireless Nigeria.
Obviously, the operations of these firms on the African continent have concentrated market share in the hands of a few players. With its entry into Nigeria, Celtel now has presence in 14 African countries, besides Sudan where it is called MTC. MTN also has presence in 21 African countries.
In terms of subscriber base, Celtel’s acquisition of Vmobile has increased its subscriber base from about 10m to well over 15m. These three firms – Celtel, Vodacom and MTN – with their combined subscriber number of about 72m users-account for over 55 per cent of Africa’s 125m mobile phone subscribers.
The Chief Executive Officer, of Celtel, Mr. Marten Pieters, in August gave indication of a continuation of its acquisition spree, saying during a tour of its operations in Tanzania that it would seek entry into more African countries soon. And with MTN maintaining its lead on the continent, one should certainly see further competition from both Vodacom and Celtel in the coming months and years. A major point of competition for these three operators is the Nigerian market as it has proven to be the preferred bride that each of them has sought how to either enter, or consolidate its position. With Celtel having joined MTN in Nigeria, Vodacom remains the biggest loser in this aspect as its failure to enter Nigeria has made it lose ground to MTN.
But while there is fear that the current situation could lead to lack of competition, these big players are actually beginning to use their might as a marketing tool. For instance, Celtel, according to Pieters, is considering establishing what he called, the One Network concept whereby any of its subscribers can use the same phone line across all its operations in Africa. This means that roaming would be available almost free of charge for its pre-paid subscribers.
The firm has done this in East Africa where Uganda, Kenya and Tanzania have all been connected in the One Network arrangement.
Pieters said, “We are operating in these countries under the same brand-Celtel because we are working to build a real Pan-African mobile network. That means that we are also building a Pan-African brand and we have put a lot of energy in that, in the last two to three years.” MTN Nigeria has also introduced a billing arrangement that allows its subscribers to pay rates considerably less that others whenever calls are made to its network across the continent and in the Middle East.
The Chief Executive Officer, of MTN Nigeria, Mr. Ahmad Farroukh, said the firm was also introducing a service whereby calls within any of the countries it is operating in, will attract lower charges compared to other networks.
Besides, there is a rash of valued added services that these operators are introducing to their subscribers. For instance, Vodacom and MTN were the first firms to introduce 3G services in South Africa. Similarly, in Nigeria both Celtel and MTN have also completed tests for 3G roll outs.
With current developments, it appears that more competition is still ahead in the days to come. Currently, the dominance of these multinational operators has not impacted negatively on the growth of individual operators on the continent.
The phenomenon appears to be global, as more multinationals have appeared in the mobile sector establishing dominance in the industry. Even Celtel’s presence in Africa has changed from it being a dominant player to being part of a bigger firm as it had been bought by MTC of Kuwait.
Source- http://allafrica.com
