South African cellphone providers are looking back on a bright year, having left a large footprint on the African continent as cellphones become the communication tool of choice for millions from Cape Town to Cairo.
MTN and Vodacom, the country’s largest two mobile operators, have acquired or are finalising offers estimated at more than $500-million in Africa this year, placing them at the top of the market.
”It’s been a very good year for South Africa’s mobile operators,” said Reg Rumney, director of the Johannesburg-based economic think tank BusinessMap.
”The reason why they’ve done so well is because they are probably better adaptable to conditions on the continent, which is a high-risk, high-reward market,” he said.
Cellphones are today the communication tool of choice in Africa, having overtaken fixed-line phones in 2001, according to the International Telecommunication Union.
Forty-three of Africa’s 53 countries have more mobile than fixed-line subscribers and 70% of all African telephone users are cellphone subscribers.
Set up in 1994 with the end of apartheid in South Africa, the MTN Group now operates in nine African countries and boasts 20,6-million subscribers continent-wide.
The company has made a number of successful acquisitions this year.
MTN announced last week it had bought Libertis Telecom, one of two cellular operators in Congo-Brazzaville, for $102,5-million, snatching up about 190 000 new subscribers.
Its largest acquisition this year was a majority stake in Côte d’Ivoire’s Loteny Telecom, trading as Telecel Côte d’Ivoire, for $208-million.
In Botswana, a $128-million deal ensured a 44% indirect stake in Mascom Wireless, while it also bought up Telecel Zambia for $47-million.
Beyond Africa, MTN in October announced it had bought a 49% stake in the IranCell consortium to provide cellphone service to 16-million users over the next 15 years. The deal is worth about $360-million.
”MTN will continue to pursue value-enhancing opportunities in the Middle East and North and sub-Saharan Africa,” said MTN Group executive director Santie Botha.
”The identification of opportunities has remained a key priority for the MTN Group,” she said.
Vodacom
Vodacom made its last investment outside of South Africa in 2003 in Mozambique and the company said it used the year to concentrate on its operation within the country.
In February, it bought Tiscali South Africa’s cellular subscriber base for $40,1-million, while it has made an offer for a majority stake in Cointel VASA for R122,2-million.
Both companies described the lack of infrastructure in Africa, with poor roads and haphazard electricity supply, as the biggest challenges for expansion.
Botha said MTN has ”overcome a number of obstacles such as lack of infrastructure, intermittent power supply and the demand for services”, including in Nigeria where it has invested nearly $900-million in infrastructure in 2004.
MTN says it has invested more than R24-billion in total in infrastructure development on the African continent.
”Yes, it is difficult to set up a cellphone network,” said a Vodacom spokesperson who declined to be named. ”But we will continue to invest in the continent because the cellphone industry underpins the key to unlocking Africa’s untapped economic potential.” — Sapa-AFP