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Drumbeat of change pulses across African telecom lines
SA telecommunications companies are moving towards becoming major players in Africa, writes THABO KOBOKOANE
SA TELECOMMUNICATIONS companies are poised to play a major role in this sector in Africa as the privatisation and deregulation process which started in the early 1990's gains pace across the continent. But the march is unlikely to be easy as some of the major international telecommunications companies have their nets cast at investment opportunities in one of the fastest-growing sectors in Africa. The International Telecommunication Union reckons that increasing teledensity (the number of telephone lines per 100 population) in sub-Saharan Africa to one line per 100 would cost in the region of $28-billion. African nations were, therefore, turning to the private sector for the investment capital needed. According to the ITU, the sector has outperformed overall economic growth, increasing its share of the GDP to 2% in 1993, although this declined to 1.7% in 1994 due to the devaluation of the CFA franc. Senegal, which is on course to liberalise its cellular industry with the start of a second network, announced last week it was holding negotiations with an unnamed SA company to acquire a 5% stake in telecommunications company Sonatel. This follows the completion of the sale of 17% of the company to the public, an offer which realised $54-million. Cheikh Tidiane Mbaye, general manager of Sonatel, told Reuters: "We are in talks with a South African partner to whom we will give between 3% and 5%." Mbaye added that Sonatel was looking to take a stake in the capital of the prospective partner as part of the operation. Last July, one third of Sonatel shares were sold to France Cables Radio, a subsidiary of France Telecom, for $106-million, and a further 10% was allocated to Sonatel staff. The sale of the 5% will leave the Senegalese state with a stake of around 34%. Sonatel shares are due to be listed on the Bourse Regionale des Valeurs Mobilieres, the Abidjan-based regional bourse, expected to start operations in February. The news comes at a time when a consortium led by cellular network provider has been awarded the second network operator licence for Uganda worth about $100-million annually. The consortium, in which MTN holds 50% - and includes Swedish-based Telia Overseas AB (30%), Investco Uganda (10%) and Rwandan-based Tristar Investments SARL (10%) - bid $5.6-million against its nearest competitors Utelnet, an affiliate of Portugal Telecommunications International, which bid $5.1-million. The MTN-Uganda consortium is expected to roll out 60 000 land lines in addition to 200 000 cellular lines. The deal is the first outside SA for MTN, but many more are set to follow. It is a frontrunner for an operating licence in Rwanda and is in final negotiations for licences in Kenya and Burundi. Vodacom, which holds the cellular licence in tiny Lesotho, recently lost out in its bid for a licence in Botswana. Together with its partner Botswana Telecommunications Corporation, Vodacom was edged out by Mascom (a partnership involving Portuguese Telecomms, TS Masiwa Holdings of Zimbabwe and a Botswana-owned company) and Vista (a consortium involving France Telecom and Five Botswana companies. Joan Joffe, group executive of corporate affairs, says Vodacom will continue seeking viable business opportunities in southern Africa. "It can be a small market, but it has to be profitable," she maintains. The state-controlled Telkom is also on the lookout for opportunities in sub-Saharan Africa that will contribute towards the development of the sector on the continent. Michael Grabbs, senior executive, international business division, said the company would look for opportunities that were "financially viable, would create additional shareholder value and lead to sustainable cross border economic activity". Its entry level could be through a number of options, including acquiring equity stakes in privatised entities or taking an active operating role.
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