Vodacom Picks Up Mozambique GSM License

The South Africa based Vodacom has confirmed that it has won a GSM license in Mozambique. Vodacom currently operates in South Africa, Lesotho, Tanzania and the Democratic Republic of the Congo. Vodacom Mozambique is that country's second GSM licensee, with mCel being the incumbent operator. Vodacom International will have the majority stake in Vodacom Mozambique with local partners Emotel, a consortium of local businesspeople, public figures and the war veterans association. Existing operator mCel is 74%-owned by the Government of Mozambique and 26%-owned by German company Detecon.

"As is the case with most African countries, the vast majority of the population is very poor. However, there is a wealthy segment of the population prepared to pay for cellular services in US dollars and large enough in size for our investment to be very worthwhile," said Andrew Mthembu, Deputy CEO of Vodacom Group (Pty) Ltd and MD of Vodacom International Holdings (Pty) Ltd.

Vodacom is forecasting a total market of some one million customers after ten years of operations and expects to win a market share of at least 50%. Vodacom's coverage in Mozambique will include all major cities and provincial capitals, many other smaller towns as well as some road coverage.

The regulator in Mozambique, INCM, issued invitations to tender in March 2002. Twelve companies expressed an interest and purchased tender documents. Four companies eventually submitted their bids to the regulator. The companies were Vodacom International, Econet International, MSI (operating under the Celtel brand) and Telecom Africa Corporation. The two stages to the bidding process included a technical evaluation and a requirement to field financial offers for a license fee. Vodacom won the license after making it through the technical evaluation and after offering US$15 million for the license. Vodacom and the regulator will now enter into negotiations on 12 June 2002 to finalise the license conditions.

Reports over the weekend though suggest that the company is having problems collecting its license in Zambia thanks to the intransigence of the three incumbent networks not releasing the necessary blocks of GSM900 spectrum. Bloomberg had cited a spokesperson for Zambia's telecoms regulator as expecting a fresh legal challenge from the incumbents in an effort to have Vodacom's license invalidated.'"

Posted to the site on 17th June 2002