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South African Mobile Services Provider Buys Ugandan Retail Chain
South Africa based mobile services company, Celcom Group has announced that it has acquired a 50.5 percent interest in the business of Nile Com for about R9.4 million (US$1.3 million). Nile Com is an exclusive MTN dealer in Uganda, and is currently owned by the chairman of MTN Uganda. Specifically, Nile Com operates seven MTN branded retail outlets selling mobile telecoms products and controls 1,200 sub-dealers.
Celcom says that the Nile Com business is complementary to its business in South Africa and the acquisition presents Celcom Group with the opportunity to secure a significant distribution footprint in Uganda. Uganda is expected to present significant growth opportunities in the next few years as at present there is only very limited mobile telephone penetration within the population and a limited service offering (primarily voice and SMS on a "pre-paid" rather than contract basis).
Mr Charles Mbire, MTN Uganda's Chairman will remain as Celcom Group's strategic partner in the business, with the remaining shareholding held via family investments.
Celcom CEO, Stefano Brachini says: "Our key focus for the year remains consolidating and strengthening our existing operations. However, the Nilecom transaction represents an important opportunity to establish the right partnerships at the right time to exploit the emerging cellphone markets in Africa and so help secure future growth."
"The transaction will not only establish a retail footprint and subscriber base opportunities for Celcom Group in Uganda, but also open opportunity for cross-selling into the Ugandan market of products and services from our other group companies such as Celcom, VPS and Triple Play."
Figures from the Mobile World report that Uganda ended last September with 3.9 million mobile phone subscribers, which represents a population penetration level of just 13.3%. MTN is the largest operator in the country with nearly 54% of the market.
Posted to the site on 29th January 2008