Orascom Reports Losses of US$170 Million

Egypt’s Orascom Telecom has posted a net loss of USD169.53 million in the last three months of 2010 on the back of both the depreciation of the local currency against the US dollar and increased pressure in foreign markets.

The company noted that as its primary accounts are held in Egyptian pounds the appreciation of the US dollar against the local currency had ‘had a significant effect on the mark to market value of the US dollar denominated debt at Orascom Telecom Holding of approximately USD3.5 billion.’ 


For the twelve months ended 31 December 2010 Orascom posted a net profit of USD781.45 million, more than double the USD378.63 million reported for 2009, which the company attributed predominantly to gains recognised as a result of its revised agreements with France Telecom regarding the ownership of Egyptian cellco MobiNil.

In terms of turnover, in 4Q 2010 Orascom reported revenues of USD980 million, while full-year revenues totalled USD3.825 billion, up 2% year-on-year; Orascom noted that it was not including results from Orascom Telecom Tunisia, which the company agreed to sell in January 2011.


All of the group’s subsidiaries reported revenue growth bar Algerian operator Djezzy, which Orascom noted had endured ‘the persistence of an adverse operating environment.’ Earnings before interest, tax, depreciation and amortisation (EBITDA) in 4Q10 stood at USD402.24 million, while in FY2010 it was USD1.584 billion, up 4% y-o-y. 

At end-December 2010 Orascom’s consolidated subscriber base was 101.683 million, with its Pakistani unit, Mobilink, accounting for the largest number of those, some 31.794 million, up 3.2% against end-2009. MobiNil reported a wireless subscriber base of 30.225 million at the end of the year, up almost 20% against end-2009, while the largest percentage increase was reported at Telecel Globe – which comprises the group’s operations in Namibia, Zimbabwe, the Central African Republic and Burundi – where customer numbers increased by 77.8% to 3.242 million.


Bangladeshi unit Banglalink meanwhile reported a subscriber base of 19.3327 million at 31 December 2010, up almost 40% compared to the same date a year earlier, which Orascom said was the result of aggressive acquisition and strong customer retention strategies.

Commenting on the results Khaled Bichara, Orascom’s Group CEO, said: ‘The year 2010 has proven to be a year of significant milestones aiding the growth of Orascom Telecom Holding on an operational and strategic level.’

Potraz to Disconnect 30% of SIMs Over Non-Registration

The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) has completed compiling a register of all mobile phone users in the country, state-run newspaper The Herald writes. 


The confidential database was completed following the regulator’s order last year for all cellular network users to register their personal details or be disconnected in the interests of curbing criminal activity. 


The registration deadline was 28 February 2011. The report says that by that date, state-owned cellco NetOne had registered 90% of its subscribers, whilst rival Telecel Zimbabwe had registered 80%, but market leader Econet Wireless only 60%.


With Econet controlling over 60% of the wireless market, the reported figures give a combined average of around 70% registration, indicating that around 30% of the country’s approximately nine million activated mobile SIM cards will now be disconnected, leaving a market of an estimated 6.3 million subscribers, or roughly 54% of the population.

Orascom Reduces Telecel Stake to Comply With Zim Law

Bloomberg reports that Egyptian cellular group Orascom Telecom Holdings has confirmed that it is in talks with the Zimbabwean government on reducing its stake in GSM operator Telecel Zimbabwe from 60% to 49% to comply with an indigenisation law requiring locals to own majority stakes in foreign companies. 


The firm’s statement was published in the state-backed Zimbabwean newspaper The Herald.

Telecel Says NetOne Is Not Sharing Towers

Orascom-backed mobile operator Telecel Zimbabwe’s CEO Aimable Mpore has accused state-owned rival NetOne of refusing to share cellular tower infrastructure, according to a report in Zimbabwean newspaper The Herald.

In the course of responding to questions on Telecel’s ownership structure from the Parliamentary Portfolio Committee on Media, Information and Communication Technology, Mpore disclosed that Telecel has had no problems sharing infrastructure with the country’s largest cellco Econet or incumbent PSTN operator TelOne, but claimed that NetOne has dismantled Telecel's equipment ‘because the facilities belong to them.’

Mpore called for state enforcement of site-sharing principles.

Econet Cuts Ineternational Rates by 50%

Econet Wireless Zimbabwe has cut its international call rates by up to 50%, meaning users can phone destinations including the UK and South Africa for as little as USD0.004 per second (USD0.24 per minute). Aiming to boost previously flagging international voice revenues, Econet stressed that mobile calls from Zimbabwe to South Africa are now cheaper than the reverse. Zimbabwe’s three cellcos – Econet, Telecel and NetOne – recently introduced a universal per-second billing system for all mobile calls.



Separately, an Econet spokesperson announced that the South African mobile virtual network operator (MVNO) owned by the Econet Wireless Group (EWG) has sold more than 500,000 SIM cards in the last twelve months to Zimbabweans living in South Africa, piggybacking on Cell C's network under the 'Call Home' banner. The spokesperson predicted that Econet Wireless South Africa’s SIM card sales would exceed one million ‘within a few months’. EWG recently set up a similar MVNO service in the UK targetting people calling African countries.

Econet to Introduce Per Second Billing

Econet Wireless Zimbabwe, the country’s largest mobile operator, will launch comprehensive per-second billing for all national and international calls, for all its pre- and post-paid users next month, its CEO Douglas Mboweni has announced. The GSM provider, which currently offers per-second billing on certain services, said the move applies for corporate and residential subscribers, at peak or off-peak times, and on calls to any mobile or fixed network. ‘The cost of making calls will be cheaper, so traffic volumes will increase. We had to first clear issues of capacity before [fully implementing] per second billing,’ Mboweni said, explaining the fact that the firm had delayed the implementation after announcing the move around a year ago. Zimbabwe's three mobile operators – Econet, Telecel and NetOne – were given until September to implement per-second billing by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ); NetOne was reportedly the first network to charge customers per-second but to date has not announced a comprehensive service covering cross-network calls; Telecel is also yet to confirm it will comply with the new billing system. The three cellcos are also facing a 31 August deadline set by POTRAZ to register the details of all pre-paid mobile SIM card users.

Burkina Launches Tender For Operators

Burkina Faso’s telecoms regulator, the Regulatory Authority for Electronic Communications (ARCE), has announced the launch of an international tender for a combined fixed and wireless concession which includes the provision of third-generation (3G) services.

The licence is valid for a period of ten years and covers the whole of the country. Interested parties can consult the tender document free of charge or obtain a copy from ARCE for a non-refundable fee of XOF300,000 (USD594).

Submissions must be made before 19 October 2010, at which date bids will be opened at the regulator’s headquarters in the country’s capital Ouagadougou.

Burkina Faso is home to three wireless network operators: market leader Telmob, which launched in December 1996 as the wholly owned cellular arm of fixed line operator the Office National des Telecommunications (Onatel); Telecel Burkina Faso, which inaugurated its GSM-900 network in December 2000; and Zain Burkina Faso, which launched wireless services in January 2001.

Telecel To Launch 3G

Telecel Zimbabwe has revealed it will launch its 3G service within the next three months. Telecel, the country’s second largest mobile operator by subscribers, acquired 3G frequencies in February this year, and if the launch goes to schedule it will become the second domestic 3G operator in the country after Econet Wireless initiated its service last year. The operator said it had constructed an additional 30 base stations across the country to increase network coverage, and will have capacity for 50,000 subscribers at launch.

Telecel Shareholders Disagree Over Zimbabwe Listing

Members of Zimbabwe's Empowerment Corporation (EC) consortium, which holds a 40% stake in mobile operator Telecel Zimbabwe, have denied reports that they agreed with proposals from the cellco's 60% owner Telecel International to list an 11% stake on the local stock market. State-backed newspaper The Herald reports that Telecel International, a holding company owned by Egypt's Orascom Telecom, claimed it had agreed with EC to float the shares on the Zimbabwean bourse to reduce the foreign-held shareholding to 49% in compliance with ‘empowerment and indigenisation' laws and telecoms regulations, but several EC members wrote to Transport, Communications & Infrastructure Development Minister Nicholas Goche and Youth Development, Indigenisation & Empowerment Minister Saviour Kasukuwere denying any involvement in the proposal. Venturas and Samukange, lawyers representing Dr Jane Mutasa, head of the Indigenous Business Women's Organisation, a 17% shareholder in EC, issued a statement saying: ‘It has been brought to our attention that Telecel Zimbabwe has placed a notice in local newspapers alleging that an agreement has been made between shareholders of Empowerment Corporation and Telecel Zimbabwe ... That statement is false. There is no such agreement between the shareholders and in particular Dr Jane Mutasa.’ The lawyers added that Mutasa had not participated in any negotiations related to the planned divestment since 18 March, and asserted that any discussions and agreements entered into without her participation were ‘null and void.’

‘Our client denies participating in the alleged proposal to have the company listed on the local stock exchange. Our client has not participated in the [proposed] alleged issuing of new [Telecel Zimbabwe] shares,’ the statement continued.

Telecel Zimbabwe is owned by Orascom Telecom’s Telecel Globe division (60%, registered to Telecel International), and EC (40%), itself comprising Kestrel (23%), IEG (18%), Indigenous Business Women's Organisation (17%), National Miners' Association (14%), Zimbabwe Farmers' Union (14%) and Magamba eChimurenga (14%). EC was originally given pre-emptive rights to acquire an 11% stake from Telecel International by the government.

The state gave Telecel a deadline of 30 June 2007 to comply with ownership rules; after failing to meet the conditions – largely because of the hyperinflation that paralysed Zimbabwe’s economy – the cellco has technically been operating without a valid licence ever since.

Telecel Zim Plans To Comply With Ownership Rules

Telecel Globe, a part of Egyptian group Orascom Telecom, has submitted its proposals to reduce its 60% shareholding in cellco Telecel Zimbabwe to 49% to comply with the country’s indigenisation regulations. A letter containing the proposals was submitted to Transport, Communication & Infrastructure Development Minister Nicholas Goche and Indigenisation & Empowerment Minister Saviour Kasukuwere, Zimbabwean Sunday newspaper The Standard reports. Telecel Globe said in a statement that the letter was approved by both of the GSM operator’s shareholders, holding company Telecel International and the local Empowerment Corporation.

The statement added that ‘there are no other shareholders in Telecel Zimbabwe and there never have been any others, although some people seem intent on misrepresenting themselves as being shareholders,’ referring to various claims on the company’s future ownership rights, mostly from individuals associated with groups that make up the collective Empowerment Corporation stake.

Telecel International, as a foreign shareholder, was obliged, both in terms of the Indigenisation Act and the licence that regulator POTRAZ issued to Telecel Zimbabwe in 2002, to reduce its shareholding from 60% to 49%. ‘Section 12.1.3 of the licence states that the licensee shall within five years from the date of signing of the licence ensure that the foreign ownership is reduced to 49%,’ the statement said, whilst clarifying that ‘It has not been possible, due to hyperinflation, to reduce shareholding within the stipulated period through the sale of shares, as nobody in Zimbabwe was able at the time to guarantee international euro or United States dollar loans.’

Telecel Zim Plans to Launch GPRS, 3G

Telecel Zimbabwe plans to launch GPRS and 3G services in either August or September, according to The Zimbabwe Standard. Telecel MD Aimable Mpore says the new infrastructure is currently being tested, and that the service will be available in all major cities at the time of launch.

Telecel, Zimbabwe’s second largest cellco by subscribers, will become the country’s second mobile operator to roll out 3G, after Econet.

Telecel Zimbabwe Users Nearing 1 Million

Telecel Zimbabwe, the country’s second largest mobile network operator by subscribers, has signed up ‘close to a million’ users, parent Telecel Globe’s CEO Kai Uebach told media in Harare last Thursday, as reported by the Zimbabwe Standard. The cellco had 592,000 subscribers at end-December 2009 according to a Telecel Globe presentation, based on a 90-day user activity period, whilst Q4 2009 blended ARPU was reported as USD12, using the exchange rate as of 31 December.

Uebach told the local journalists that Telecel Zimbabwe was in the process of rolling out 170 new base stations countrywide, whilst its network signal quality had recently been significantly improved. Telecel has also invested heavily in electricity generators and batteries so that its network can continue operating during frequent and prolonged periods without mains electricity.

Meanwhile, he attributed the rapid rise in Telecel’s subscribers in the last few months to its reduction in the price of SIM cards to USD2, including USD1 of air time, alongside the lowering of the cost of international calls to countries where there were substantial numbers of ex-pat Zimbabweans. The CEO also rebuffed recent accusations of ‘externalisation’ of funds at the company, simply stating that equipment that was unavailable in Zimbabwe had to be sourced abroad, and was purchased at competitive prices.

Uebach said he had met with the Posts and Telecommunications Regulatory Authority (POTRAZ) and government ministers to assure them that Telecel Globe would comply with legal requirements for it to reduce its existing 60% shareholding to 49%. He indicated that his preference would be to float the shares on the stock exchange, for reasons including ensuring transparency. Telecel Globe is 94% owned by Egypt’s Orascom Telecom.

MTN's Stake in NetOne Could Fall Through

South African news service Bizcommunity reports that MTN’s planned acquisition of a 49% stake in Zimbabwean cellco NetOne could be in danger of collapsing after it was revealed that some members of the government are opposed to its privatisation. Finance Minister Tendai Biti is said to have told a parliamentary committee that there was growing discomfort over the sale. ‘Some of us are uncomfortable selling NetOne,’ Biti said. ‘We believe it [NetOne's poor performance] is a management issue.’ The reports claims that Biti also said the mobile network business was ‘like printing money,’ and that there was no reason for NetOne to be in its current state when rival cellco Econet Wireless Zimbabwe was ‘making USD65 million every month.’

NetOne is currently the smallest wireless network operator by subscribers in Zimbabwe, despite being the first to launch. At the end of 2009 the company claimed approximately 10% of the country’s wireless subscriber market.

Telecel Zimbabwe Suspends Board Chair Over Fraud

ZIMBABWE’S second largest mobile cellular company, Telecel, has suspended its acting chairperson, Jane Mutasa following serious allegations of fraud.

Mutasa and co-accused persons, among them Telecel regional manager for Harare Charles Mapurisa and Caroline Gwinyai were arrested on the 7th March on charges of defrauding the mobile cellular company of R5.5 million (US$750 000).

The acting chairperson was suspended last Friday following an extraordinary board meeting held in the capital-Harare.

“At the extraordinary board meeting of the Board of Telecel Zimbabwe, held on March 19, 2010, the directors resolved to suspend Mrs. Mutasa as director of the company to afford her an opportunity to defend herself against the charges that have been preferred against her by the state following allegations of fraud brought to the police by the company.

“The board has also abolished the position of acting chairperson that Mrs Mutasa carried,” reads a statement in possession of our reporters

The trio have since appeared in court last week before a Harare magistrate, Don Ndirowei and were remanded in custody.  Of the three, Gwinyai is believed to be Mutasa’s personal assistant at another company called Oxygon Investments, which is believed to be owned by Mutasa.

In an earlier court hearing, Mutasa and her co-accused persons were denied bail on the suspicion that they would abscond from trial when set free.

The state case claims that on July 15, 2009 former Telecel managing director, Mr Rex Chibesa, ordered all workers to stop selling lines and airtime using manual invoices. It is further alleged that the trio disregarded the memorandum from the managing director.

Between August 26 and October 21 2009, Mutasa is alleged to have instructed Omar to request stock from Telecel stores on behalf of her personal firm Oxygon Investments. It is further alleged that Omar then instructed his junior, Mapurisa, to write the manual invoice for 30,000 seed packs (lines) valued at US$300,000 and airtime cards worth US$450,000.

In recent months Telecel Zimbabwe has been the rocked by scandals.  In February, Telecel Zimbabwe Managing Director, Aimable Mpore’s work permit was withdrawn by the government of Zimbabwe. This prompted Telecel Globe CEO, Kai Uebach to express the hope that Mr. Mpore would be allowed to continue to serve Telecel Zimbabwe.

Telecel Globe, the African unit of Orascom Telecom, is Telecel Zimbabwe’s international partner.

Dispute Over Telecel Zim Stake

Mobile operator Telecel Zimbabwe, a subsidiary of Egyptian group Orascom Telecom, is weighing up options for the overdue divestment of an 11% stake to local shareholders, which it said last month it is hoping to carry out soon, the Zimbabwe Independent reports.

The newspaper also says that local investors are in dispute over rights to the stake, part of the parent company’s 60% holding that it must reduce to comply with government policy restricting overseas companies from majority-owning telecoms companies, as well as empowerment policy compelling foreigners to sell 51% stakes to black-owned entities. There have been delays in implementing these regulations though, and in the case of Telecel there have been problems deciding which empowerment group should receive shares.

Telecel Zimbabwe is owned by Telecel Globe (60%, formerly Telecel International), itself owned by Orascom Telecom, and the local Empowerment Corporation (40%), itself comprising Kestrel (23%), IEG (18%), Indigenous Business Women's Organisation (17%), National Miners' Association (14%), Zimbabwe Farmers' Union (14%) and Magamba eChimurenga (14%). The Empowerment Consortium was given pre-emptive rights to acquire an 11% stake from Telecel International by the government.

However, James Makamba and Jane Mutasa, the respective heads of Kestrel and Indigenous Business Women's Organisation, have been in dispute over the eventual recipient of the shares. The Independent says that Mutasa, currently in custody for allegedly defrauding Telecel, and 'fugitive' businessman Makamba both continue to claim rights to the 11%. Sources are quoted as saying that although Telecel allegedly prefers the idea of selling to Makamba, he left the country in August 2005 in the wake of externalisation charges, making it unlikely that he could gain regulatory approval for the transaction.

Meanwhile, Mutasa reportedly clashed with executives from the parent company earlier this year, but claims pre-emptive rights over the shares. Telecel is also considering a share option scheme to solve the issue, therefore placing the shares in the hands of a neutral party, the paper’s unnamed sources said.

NetOne Wants Fresh Loan Terms From Treasury

State-run Zimbabwean cellco NetOne has approached the treasury to renegotiate terms for a USD28 million loan obtained from international financiers at its inception more than a decade ago, reports AllAfrica.com, quoting The Zimbabwe Independent. Reward Kangai, NetOne’s managing director, told the parliamentary portfolio committee on media, information and communication technology that the firm had since 2002 failed to service the debt owed to three lenders, among them the UK-based Standard Chartered Bank.

However, Kangai added that NetOne could level the playing field with its privately-run competitors, Econet Wireless and Telecel Zimbabwe, if the government approved the setting up of an independent procurement committee to replace the current state body which, the MD claimed, often took close to six months to procure supplies for the GSM operator.

Kangai said the company had failed to replace its obsolete billing system following a decision by the existing procurement board to cancel bids by prospective suppliers, and as a result subscribers on monthly contracts were shifting to the pre-paid platform, EasyCall.

Meanwhile, the government has received USD53 million in financing from China for expanding NetOne’s network and customer base. The company had been targeting ‘five million subscribers by March this year’; it was reported this month to have less than 500,000 subscribers.

In a separate development, the incoming managing director of Telecel Zimbabwe, Aimable Mpore, revealed to the same parliamentary committee that the Orascom Telecom subsidiary would launch 3G mobile services by June this year after it was granted necessary wireless frequencies by the Post and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) last week.

Four ZAMTEL Bidders Submit Bids

Of the eight companies shortlisted in the sale process of a 75% stake in Zambian fixed line incumbent Zambia Telecommunications Company (Zamtel), only three have submitted bids. According to the Times of Zambia the three foreign companies to submit their offers to the Zambia Development Agency (ZDA) for the telco are India’s Bharat Sanchar Nigam Ltd (BSNL), Unitel of Angola and Libya-based LAP Greencom.

A fourth bid, from a consortium of Russia’s Vimpelcom and the telecoms arm of the Alfa Group, Altimo, was understood to have been sent on time, but reportedly arrived at the ZDA offices five minutes after the submission deadline as a result of ‘logistical reasons’. The bid however was still considered, and the ZDA board confirmed that Altimo’s non-binding offer had been accepted today. The four companies that had been shortlisted but chose not to bid were Telkom South Africa, BSNL’s fellow state-owned Indian telco Mahanagar Telephone Nigam Ltd (MTNL), Portugal Telecom and a consortium of Egypt-based Orascom Telecom and its subsidiary Telecel Globe.

ZDA acting director general, Muhabi Lungu, after opening the bids said the ZDA would now study the offers, while also passing the details on to the board of Zamtel for its evaluation. Mr Lungu has stated that the ZDA will announce which of the companies will move on to the next stage in the sale process on 11 January 2010, where another due diligence would be undertaken before the successful bidder is chosen.

New Zamtel Owner To Revitalise Company

­Zamtel's new owner could revitalise the company, gaining a 19% share of the mobile market by 2015, up from its current 4% share. According to Onda Analytics, the privatisation will lead to a major operator taking over Zamtel, providing a serious threat to existing Zambian mobile operators, Zain and MTN.

Interested parties, including MTNL, Telecel Globe (a subsidiary of Orascom), Telkom SA and Vimpelcom officially began due diligence this week.

According to report lead author, Daniel Jones (Partner), "The new investor will have to turn around an operator in crisis. A strategy along the lines of a new entrant will be needed, as Zamtel has fallen further and further behind in the mobile market. High mobile tariffs and low penetration in Zambia present an opportunity for the buyer. Aggressive price competition and going after subscribers new to the market will help Zamtel grow its market share and challenge its competitors".

Onda Analytics' new report considers the strategies that a new owner will need to adopt in order to turn the operator into a significant mobile player in Zambia. Under the right strategy, Onda Analytics forecasts Zamtel to grow its mobile market share from 4% in 2009 to 19% by 2015, increasing its subscriber base from 160 000 to 1.8 million. The report also analyses the strategic importance of Zamtel's other assets, including its fixed line network and the WiMAX network currently in deployment.

On top of increasing revenues, Zamtel will need to keep a close check on costs. "Zamtel's bloated cost base, as a result of its large headcount, has led it to insolvency and the current privatisation process" explains report co-author, Tom Harden, Partner at Onda Analytics. "Today, all the operator's unionised staff have agreed voluntary redundancy. A massive staff reduction programme will be need to be carried out by whichever company takes over Zamtel. The union has recognised this, hoping to get the best redundancy packages for its members by negotiating the government now, rather than the new owner later" explains Harden.

MTN Presence at Zim Fair Creates Anxiety

South Africa's MTN is rumoured to be considering an investment in neighbouring Zimbabwe to get a stake in the country's mobile phone sector. The rumours were heightened when the company took a stand at a trade fair in the country this week.

According to media reports in South Africa, MTN is eyeing a 60 percent shareholding in Telecel Zimbabwe - which is owned by Egypt's Orascom Telecom.

"We have always said we are looking for value-enhancing opportunities and Zimbabwe presents us with one. Zimbabwe is our neighbour sitting there waiting. The Government is embarking on a reinvention of itself and has opened up to South African companies to go in and operate there," MTN spokeswoman Nozipho January-Bardill told South African newspaper Business Day.

"MTN has taken risks in much poorer countries and from what we are seeing there seems to be a commitment to grow and redevelop the economy," January-Bardill said.

The country currently has three mobile network operators. According to figures from the Mobile World analysts, Telecel is estimated to have ended last year with around 232,000 subscribers - representing a market share of around 15%.

Orascom Buys Namibia's Cell One

Telecel Globe, a subsidiary of Orascom Telecom, has acquired the Namibian mobile network operator Cell One for USD 59 million in cash, of which USD 32 million was already paid and the balance is due in January 2010.

Cell One operates a GSM 900/1800 network and has 198,000 active subscribers and over 20 percent market share. The acquisition will further enable Cell One to grow its customer base and deliver new services. Namibia had a mobile penetration of close to 50 percent at the end of 2008. 

These acquisitions are part of Telecel Globe's strategy to target licences and mobile operators in small and medium-sized developing countries that have high growth potential.