Zimbabwe's NetOne in talks with MTN
11 March 2011 @ 18:10
Zimbabwe's state-owned, oldest mobile operator, NetOne, has entered into talks with South Africa's MTN regarding the sale of a 49 per cent stake in the company. Despite its incumbent status, NetOne is Zimbabwe's smallest operator, trailing larger telcos Econet Wireless and Egypt's Orascom Telecom with its subscriber base of just over 1.5 million.
MD Reward Kangai told Reuters on Wednesday that the talks were taking place, but MTN has so far declined to comment. According to Kangai, MTN is just one "among others" interested in buying a stake in a company that Kangai values at $500-800m.
Despite its political and economic woes, Zimbabwe's comparatively low mobile penetration rate makes it an attractive prospect for operators looking to expand their footprint on the African continent. Kangai has said that Zimbabwe's telecommunications laws limit sales of shares to 49 per cent but that projected earnings of $200m in 2011 and an anticipated increase in subscribers should still make the telco and attractive prospect for strategic investors.
Following more than a decade of economic chaos, the formation in 2008 of a unity government between President Robert Mugabe and opposition leader Morgan Tsvangirai has edged the country towards the beginnings of a recovery.According to Kangai, low mobile penetration in the country "presents an opportunity for the company to grow, which also presents a business opportunity for the strategic partner."
East Africa Com takes place April 5-6 in Kenya. Speakers include John Barorot, CTO, Safaricom
Tags: Econet wireless, MTN, NetOne Zimbabwe, Orascom Telecom
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