South African Networks Eye Orange Uganda Sale
Published on: 12th Mar 2014
By: Ian Mansfield
South Africa's Vodacom and MTN are both in a race to put in bids to buy Orange's Ugandan operations now that they are nominally up for sale.
Orange recently indicated that it might sell both its Kenyan and Ugandan networks, or reduce its stake if another local investor can be found.
Orange originally entered the Uganda market in 2008 through a partnership with Hits Telecom, in which it bought a 53 percent stake, which has since been lifted to 95 percent.
MTN already has a network in the country, so a purchase would see some necessary market consolidation, although as Orange Uganda is a tiny network by customer base, the impact on market share would be negligible. The main gain for MTN would be spectrum and network assets.
Meanwhile, a sale to Vodacom could see a strong new competitor enter the market, if Vodacom was willing to pump in the necessary investment.
The recently merged Bharti/Warid network has a 38% market share, compared to MTN's 43%. Uganda Telecom has a 16% market share -- with the remaining four networks holding a fraction of a percent each.
Uganda Telecom is seen at the most likely company to fall next -- if only due to its struggling financial situation. The company is being sued by a number of firms over unpaid invoices.