MTN Group May Begin Operating Mobile-Phone Network in Congo

By Franz Wild

Sept. 19 (Bloomberg) -- MTN Group Ltd., Africa's largest mobile-phone company, may begin operating in the Democratic Republic of Congo by buying a closely held company, a regulator said.

The Johannesburg-based company would follow Kuwait's Hits Telecom Holding Co., which is set to become the central African country's sixth cell-phone operator, said Christian Katende, vice president of the Post and Telecommunications Regulation Authority of Congo. The authority also may stop issuing wireless licenses after MTN has started operations, he said.

``We are sure MTN is interested in the Congolese market,'' Katende said yesterday in an interview in the capital, Kinshasa. MTN spokeswoman Pearl Majola couldn't comment when contacted by phone and didn't immediately respond to e-mailed questions.

Congo's mobile-phone industry, in which Vodafone Plc unit Vodacom Group Ltd. and Zain jointly control about 85 percent of the market, generates a third of annual government revenue. While the central African nation has 7 million subscribers, many people use multiple networks to reduce costs, suggesting that the mobile penetration rate is probably lower than the 11 percent estimated by the regulator.

MTN may begin operations in Congo by acquiring Supercell Sprl, a closely held company with a national mobile-phone license that operates a network in the eastern North Kivu province, Katende said.

``It's not clear whether they'll take Supercell, or come on their own,'' he said.

Supercell Talks

Alexis Makabuza, a shareholder of Goma-based Supercell, said the company had held talks with an unidentified investor.

``There has been an approach,'' he said, without providing further details.

Congo's fixed-line phone infrastructure collapsed after decades of economic mismanagement by former dictator Mobutu Sese Seko and two civil wars between 1996 and 2003 in which 4 million people died.

The state-owned Office Congolais des Postes et Telecommunications plans to restart operations as the country prepares to connect to the West Africa Festoon System, a submarine fibre-optic cable connecting countries from Nigeria to South Africa to an international network, in early 2010.

The company will benefit from a $31 million investment under a $9 billion deal with China in which mineral rights were exchanged for rebuilding of Congo's infrastructure. Congo has a third of the world's cobalt, used to make rechargeable batteries, and 4 percent of all copper.

Congo's regulator plans to stop issuing mobile-phone licenses before the market saturates itself, Katende said.

``For the moment we're letting the market auto-manage itself,'' he said. ``At some point we'll stop issuing licenses. Even six licenses is a lot.''

Jean-Louis Kayitenkore
Procurement Consultant
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East Africa
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