FT Takes Over Managent of ETC

The management of Ethiopian state-owned fixed line incumbent Ethiopian Telecommunications Corporation (ETC) has been officially transferred to European giant France Telecom (FT), AllAfrica.com reports. It is understood that a deal between the French company and existing management at ETC was signed last week.

Under the terms of the agreement FT will take control of the telco on behalf of the Ethiopian government for a three-year period, and it will be paid an annual management fee, while there reportedly also remains a possibility of revenue sharing from enhanced services, although this has not been confirmed. It has, however, been claimed that the deal has yet to be sent to the Council of Ministers for approval.

FT, which faced competition from South Africa’s MTN Group and Indian state-owned telco Bharat Sanchar Nigam Ltd (BSNL) for the ETC management contract, will now be tasked with implementing the government’s ambitious plans to expand telecom services nationwide. The state has said that it wants basic telecom services made available within a radius of five kilometres to 100% of the population by the end of 2010

The government has set aside USD2 billion over a two-year period to expand the infrastructure, aiming to boost the number of Points of Presence (PoP) it has from 1,900 at end-2006 to 17,000 by end-2010. ETC is also aiming to increase fixed line subscribers to four million and mobile customers to 8.5 million by that date.

Three Remain for Telcos Zamtel Bid

Of the four companies left in the running to acquire a stake in Zambian fixed line incumbent Zambia Telecommunications Company (Zamtel) only three have submitted final binding bids, with Indian state-owned telco Bharat Sanchar Nigam Ltd (BSNL) dropping out of the process after conducting due diligence.

According to Reuters, the withdrawal of BSNL leaves Libya’s LAP Green Networks, Unitel of Angola and Russian telecoms investment firm Altimo chasing the up to 75% stake that the Zambian government plans to offer in the operator.

Commenting on the development, Henry Sakala, the privatisation manager at the Zambia Development Agency (ZDA), said: ‘These bids will be subjected to an evaluation by the ZDA and after the evaluation they will be presented to the ZDA board who are going to make a decision as to which ones to shortlist for negotiations.’ In addition Sakala noted that the ZDA board would appoint an independent team to undertake the negotiations with the successful bidder(s).

Zambia Plans To Transfer Fibre Lines From Zesco to Zamtel

AllAfrica.com reports that the Zambian government is planning to put a number of fibre pairs currently controlled by state-owned power company Zesco in to the hands of Zambia Telecommunications Company (Zamtel). It is understood that the move is part of the state’s plans to make the telco more attractive to potential buyers, as the privatisation process of the operator moves forward.

Under the proposals the government will transfer seven of twelve fibre pairs that Zesco has; of the remaining five, two are used by Zesco to manage its power network, one is used by South Africa-based MTN, which owns a mobile operator in Zambia, while the last two are not currently in use.

Local ISPs have voiced their concerns about the proposals however, with one unnamed market operator stating: ‘All the ISPs don't want this to happen. We have a good relationship with Zesco and we put a lot of capacity through their link. If it happens, I'll have to lay fibre routes and that's not my business. We're looking at VoIP offerings because the current prices of international calling are still USD1.10-USD1.50 a minute.’

At present Chinese vendor Huawei is in the process of rolling out a fibre backbone for Zamtel, but it remains incomplete and by comparison to Zesco’s existing infrastructure is significantly less expansive. Zesco’s fibre network spans the economically active central part of the country from Lumwana and Solwezi in the north to Sesheke in the south.

The Zambian government first announced plans to divest a portion of its stake in Zamtel in December 2008. In September 2009 it revealed it would sell 75% of the struggling operator, and one year after initially unveiling its intention to sell, the Zambia Development Agency (ZDA), which is handling the process, announced the shortlist of bidders: India's Bharat Sanchar Nigam Ltd, Unitel of Angola and Libya's LAP Green Networks. Russia’s Altimo was subsequently added to the list, despite submitting its bid after deadline.

'French Firm' To Run Ethiopian telecom

Local news sources report that an unnamed French company is set to take over management of Ethiopian state-owned incumbent Ethiopian Telecommunication Corporation (ETC) having beaten off bids from South African and Indian competition. Having attracted the interest of a number of foreign companies on announcing that it was seeking a partner on a revenue-sharing basis, Capital Ethiopia claims that only three companies made it through to the final stage of the selection process; South Africa’s MTN, state-owned Indian telco Bharat Sanchar Nigam Ltd (BSNL) and the unnamed French company.

While the selection process has been concluded ETC CEO Amare Amsalu is quoted as saying: ‘I am out of the [Addis Ababa] and it is difficult to give releases without referring to documents.’ Additionally, it is understood that, while the winning bidders has been picked, further negotiations are still required, providing further reason for the lack of information being released regarding the deal.

What is known is that the firm selected to take over management of the telco will be responsible for introducing new schemes to reform how ETC conducts its core operations, from service provision to infrastructure maintenance. According to previous comments by Diriba Kuma, Transport and Communications Minister, the winning international firm will also be expected to boost ETC’s revenues.

At present ETC is undertaking a large-scale expansion scheme of all its networks and services, with improvements expected to include the rollout of a fibre-optic network. Previously Chinese vendor ZTE had been selected by ETC to assist with the construction of a new national infrastructure in three phases; currently ZTE is working on the third phase which covers expansion to rural and remote regions, and was started in October 2008, and is due for completion in the near future.

Commenting on the introduction of the ETC’s new management partner Minister Diriba noted: ‘The transformation process the new company is to lead will kick off as soon as the ongoing expansion with ZTE is completed.’

Four Listed For Zamtel Acquistion

Four bidders have been shortlisted to take a 75% stake in the state-owned telco, Zamtel. The bidders who shall proceed to the next round are India's BSNL, Libya's LAP Greencom, Unitel /Angola Cables of Angola and Russia's Altimo Holdings/VimpelCom.

The ZDA Board at meeting held on January 11, 2009 approved the recommended shortlist after detailed analysis conducted by an Evaluation Committee.

Commenting on the shortlist at a press briefing to announce the successful bidders, Mr. Muhabi Lungu, Acting Director General of the ZDA said he was happy with all four participants who have gone through to the next stage of the process. "The bids submitted were compelling, and set the stage for an exciting next phase," he added.

The four bidders will now be invited to participate in the next round of bidding, which is expected to begin during the week commencing 18 January, 2010. At the begining of this phase shortlisted bidders will be given details of the requirements and timing for the next phase of the process. Details of the bids will not be disclosed at this stage as doing so would prejudice future phases of the privatisation process.

BSNL Puts Zain Purchase On hold

Bharat Sanchar Nigam Ltd (BSNL) has put its plan to be a part of the consortium looking to buy a stake in Kuwait's Mobile Telecommunications Co, on hold. The decision was taken as the information sorted by Vavasi Group has still not been received.

Vavasi Group which is not yet listed in India had tied up with Al-Bukhary group of Malaysia to buy a 46% stake in Zain.  It was trying to add state-owned Indian telecommunications firm like BSNL and Mahanagar Telephone Nigam Ltd., to the consortium. By joining the consortium, BSNL and MTNL seek to widen its horizon beyond India.

Earlier, Gurudas Kamat, India's junior telecom minister had said that both MTNL and BSNL are not very serious about joining the consortium.

The state owned telecom companies are facing stiff competition from private sector companies. According to BSNL Chairman Kuldeep Goyal, BSNL's revenue is going to be severely hit by the latest tariff war in the current financial year.

The company is planning to add 20 million working lines to its present 50 million on the global system for mobile communication platform, over the next six months. Besides, it is also planning to spend INR140 billion in the current fiscal year to expand its mobile services.

"Econet Case Will Not Derail Zain Africa Deal"

Kuwait's Zain Group is not concerned that a lawsuit filed by South Africa's Econet Wireless pertaining to the company's 2006 purchase of Nigerian operator Vee Networks (now Zain Nigeria) will derail plans to sell a 46% stake in the group to Indian investors, Bloomberg reports, citing Kuwaiti daily Al-Rai. 'The lawsuit is old and dates back to before 2006,' Zain CEO Saad al- Barrak told the newspaper, before adding that Econet had lost similar lawsuits filed against Zain in British courts over the last four years.

Econet claims that its right of first refusal over the stake was breached when Zain bought out the Nigerian cellco in May 2006, and has said it will continue to pursue arbitration proceedings. Econet has also applied for interim measures to prevent Zain from selling, transferring, disposing of, dealing with or otherwise encumbering the disputed stake until the matter is resolved.

The blocking could disrupt plans by the Al-Kharafi group, which holds an indirect 10.8% stake in Zain, and its National Investments Company to sell a total 46% stake in Zain Group valued at USD13.7 billion to a consortium of Indian and Malaysian investors, including BSNL, MTNL and Vavasi Telegence.