MTN Buys Two More African Operators

South Africa's MTN Group says that it is to buy two GSM networks in Cote d'Ivoire and Zambia. The MTN Group has entered into an agreement to acquire a 51% stake in Loteny Telecom, trading under the name Telecel Cote d'Ivoire. Telecel Cote d'Ivoire is one of two operators in Cote d'Ivoire. The operation has in excess of 800,000 subscribers and an estimated market share of 46%. The transaction is subject to minor conditions, however, regulatory approval has been obtained.

The MTN Group has also entered into an agreement to acquire Telecel Zambia, which is one of three network operators in Zambia. The acquisition of Telecel Zambia, which currently has an estimated market share of 21%, is subject to regulatory and competition approval from the relevant authorities in Zambia.

These acquisitions will further entrench the MTN Group's footprint in West/Central Africa and Southern Africa, where it already has operations in Nigeria and Cameroon and South Africa and Swaziland respectively. Successful conclusion of both agreements would increase the MTN Group's operations to eight, including MTN Rwanda and MTN Uganda and grow the total subscriber base to over 16 million.

Cote d'Ivoire is one of the first African countries to liberalise the telecommunications sector with the privatisation of the state-owned Cote d'Ivoire Telecom and the introduction of three competitors in the GSM market. The third GSM operator, Comstar, was a minor competitor which suspended operations in October 2003.

The country has recorded one of the highest growth rates for GSM services in Africa over the last five years and growth potential still remains high, given the current mobile penetration rate of approximately 11%.

It is estimated that the current population of Cote d'Ivoire (17.3 million) will grow by approximately 2.2% per annum. The total mobile market at the end of 2004 was 1.8 million subscribers (based on 90 days access). The penetration level is expected to grow to 12% in 2005 (2.2 million subscribers), 18% by 2010 and 20% in 2015.

Telecel Cote d'Ivoire performed relatively well in 2004, maintaining its market share through innovative products and services. Telecel Cote d'Ivoire was the first mobile operator in Cote d'Ivoire to introduce pre-paid cards in 1998. The operation continues to develop unique products, focusing on value-added services.

Telecel Zambia launched its services in June 1997 operating a CDMA network until 1999 when it migrated to GSM. It is currently the second largest network operator.

The Zambian mobile market is currently estimated at over 360,000 subscribers with a penetration rate of approximately 3% based on a population of nearly 11 million. Growth in the market, fuelled mainly by the recently increased competition amongst the mobile operators, is expected and coverage is concentrated in the urban areas. The regulator is seeking further expansion for rural telephony and Telecel Zambia has already responded, introducing 400 community payphone lines.

Telecel Zambia's coverage spans from the Southern Province covering the towns of Chirundu, Lusaka Province through Central Province covering Kabwe and Kapiri Mposho District and all the way to the Copperbelt."

Posted to the site on 23rd June 2005