Orange Is Only Bidder For Congo Telecom

The government of the Democratic Republic of Congo (DRC) has confirmed that France Telecom (FT) is the only bidder for its 49% stake in Congo Chine Telecom (CCT). 


Already in talks with Chinese vendor ZTE for its 51% share of the company, FT is expected to pay around EUR300 million (USD) in total for the operator, a reflection of its level of debt, rather than its value. 


Reuters reports that, Elie Girard, FT’s executive director said that this is an ‘important step, but not the final step of the process of the withdrawal of the state from CCT and the acquisition’. 


The move is part of a broader strategy from FT to increase its presence in emerging markets to offset increasing competition and declining revenues in Europe.

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.’

Tunisia Takes Over Doubtful Orange Stake

The interim government of Tunisia has confiscated the 51% stake in Orange Tunisia held by members of overthrown president Ben Ali's family via the Investec Group. 

After first freezing the Orange assets of Ben Ali's son-in-law, Marwan Moubrouk, along with those of his ex-wife and upward of 100 assorted friends and family, the new government has decided to confiscate the shares and set up an inquiry to try and work out what should be done with them. The commission has six months to reach a conclusion.

It is rumoured that France Telecom may be encouraged to purchase the outstanding shares, although this would necessitate a change in the current foreign direct investment (FDI) laws. 

Orange Tunisia launched its wireless network in May last year and by the end of December had garnered 1.17 million subscribers, to give it a 9% share of the market.

FT Continues With Plans To Purchase Korek

France Telecom (FT) is proceeding with the purchase of a stake in Iraqi cellco Korek Telecom, after it was chosen as a preferred bidder over South Africa’s MTN, according to a report by Middle East business intelligence service MEED.

The GSM operator, based in the autonomous Iraqi Kurdistan region, won a nationwide licence in 2007 and has proceeded to branch out from its northern homeland to cover central and southern regions of Iraq. Korek is Iraq’s third largest cellco by subscribers.

The MEED report adds that Korek, with a customer base approaching three million in a market with room for growth, is an attractive asset for the French group, which recently expanded in the Middle East and North African (MENA) region by purchasing a 40% stake in Morocco’s Meditel.

FT is looking to increase its territorial presence further via more acquisitions, with the overall aims of doubling its revenues and reaching 300 million subscribers worldwide. The deal, which is yet to be finalised, would also assist Korek’s further expansion plans with the investment of a global player, whilst also representing a cheaper option for FT than bidding for a new licence in Iraq and building a network from scratch.

Meanwhile, FT has recently established research and development labs in Amman and Cairo to create services and products specific to the Middle East market.


Providing a cautionary note, UAE-based Etisalat previously failed to negotiate a stake purchase in Korek, saying that the Iraqi firm demanded ‘too much for too little’ in talks with the Abu Dhabi operator more than two years ago.

Maroc Telecom Ahead of FT in Benin Telecom Bid

Morocco’s Maroc Telecom, controlled by French group Vivendi, is thought to be in a good position to bid for state-owned Benin Telecoms, according to African-bulletin.com, quoting French newspaper La Lettre Mediterrannee, following previous reports that France Telecom (FT) was in pole position for the privatisation of Benin’s incumbent telco.

The schedule for privatising the PSTN and broadband operator is unclear however, with observers saying that the issue could be clouded by upcoming presidential elections next spring, whilst Benin Telecoms’ workers’ union has warned that it will ‘react strongly’ to inevitable staff restructuring (‘downsizing’) plans resulting from a sale to the private sector.

Maroc Telecom has expanded across several African nations. In neighbouring Mauritania, it acquired 51% of Mauritel in 2001, and it acquired majority control of Burkina Faso’s Onatel in 2006 and Gabon Telecom the following year.

In 2009, Maroc Telecom signed an agreement with the Malian government to become the major stakeholder of Sotelma. The group is also eyeing other markets outside the traditional French speaking African countries which have strong political ties with Morocco.

Bharti and Vodafone Struggle to Make Money In Africa

For Vodafone Group Plc, Bharti Airtel Ltd. and other phone companies with about $90 billion invested in Africa, making more money from each user in the world’s fastest-growing market is becoming the biggest challenge.

The number of operators is prompting a race to the bottom on call rates. In Tanzania, which has seven phone companies, prices have fallen 90 percent over the past 18 months. Companies also face among the world’s highest “churn” rates, with users frequently changing operators, and patchy infrastructure, all of which make returns on investment difficult.

“It is hard,” said Pieter Uys, chief executive officer of Vodacom Group Ltd., which is controlled by Vodafone and is the largest provider of mobile-phone services in South Africa and Tanzania. “You have to do business in a very different way, you have to build data networks, find other ways to grow revenue.”

Phone operators gathered at Africa’s telecommunications conference that began yesterday in Cape Town want to sell services to the 50 percent of the market that doesn’t have mobile phones. They also want to service current customers more cheaply, without losing user loyalty, while stemming declines in average revenue per user, or ARPU, by offering newer services such as mobile Internet, banking and other money transactions.

“We are now dealing with an ecosystem that’s changing very, very fast,” Andile Ngacaba, chairman of Dimension Data and Convergence Partners, said at the conference. “On the one side, we see this subscriber growth and growth in data and data applications. On the other side, we see this decrease in ARPUs. This requires new models of investment such as infrastructure sharing.”

African Growth

Operators have been lured to the continent by its promise. Africa has a mobile-phone population of about 445 million handsets, according to a McKinsey & Co. report. It took 20 years for the size of the mobile-phone population to reach 200 million, and less than three years to get to the next 200 million, according to the report.

Africa has “become the fastest-growing region in the global cellular market, going from fewer than 2 million mobile phones in 1998 to more than 400 million today,” it said.

The mobile value-added services market in Africa was worth $4.5 billion in 2009, and over the next five years is forecast to grow at a compound annual growth rate of 20 percent, generating $11.5 billion by 2014, Informa Telecoms & Media, a London-based consultant, said in its Rural Connectivity Report in Africa published this month.

Capture Opportunity

About 80 percent of the sales were from messaging, while mobile Internet contributed 14 percent and mobile entertainment such as music and television 3.5 percent, the report showed.

Internet and broadband penetration is still in single digits, Uys said.

“So the possibilities are still there but it’s what you pay for it to get it, the investment in infrastructure,” he said. “If the tariffs are driven too low for whatever reason then it might also not make sense.”

In order for mobile operators to “capture this opportunity,” the market needs consolidation, McKinsey said. “The industry structure should be rationalized, for example, because many markets, even smaller ones, have four or more players.”

Competition on the continent is fiercer now than it has ever been. In the Democratic Republic of Congo and Tanzania, mobile-phone tariffs plunged between 50 percent and 60 percent in the six months through September.

Tumbling Prices

Prices in Kenya have been slashed to such an extent that Safaricom Ltd. Chief Executive Officer Bob Collymore said India’s Bharti, which bought most of Zain’s African operations last year for $9 billion, is losing money on as much as 50 percent of its voice traffic.

Safaricom has an 86 percent share of the market and is 40 percent held by Newbury, England-based Vodafone. Bharti’s head of African operations, Manoj Kohli, declined to comment on Safaricom’s remarks. “We can’t comment on our competitors’ claims,” Kohli said.

On Aug. 18, Bharti halved tariffs in Kenya to 3 shillings, Les Baillie, a spokesman for Safaricom said. Safaricom “knew that voice was always going to become a commodity,” Baillie said. “It was not expected that it would happen so rapidly though.”

Companies are scrambling to adapt their operations to the new climate.

“We have to review our business model and make it leaner and compete on price and have more quality in our network and to have more data,” said Mickael Ghossein, chief executive officer of Orange Telkom Kenya, which is 51 percent held by France Telecom SA. “We have to enhance our quality of networks.”

Sharing Towers

In South Africa, Vodacom, which is 65 percent owned by Vodafone, is investing in data networks. Data now accounts for more than 50 percent of its traffic and is growing at more than 50 percent a year, Uys said.

The company is also pushing smart devices that are able to browse the Internet to low-end segments with touchscreen phones that retail at 499 rand ($73). Once users have an improved mobile-browsing experience, data consumption increases, Uys said

Operators are also sharing infrastructure, especially to reach sparsely populated rural areas where returns on capital invested in infrastructure are low.

Infrastructure sharing and outsourcing of towers has been punted for years. Now, faced with greater competitive pressure, companies are beginning to act.

‘Good Industry’

Last month, Vodafone signed an agreement with Eaton Towers to manage its 750 towers in Ghana. On Nov. 5, American Tower Corp. agreed to buy 3,200 towers from Cell C Ltd., South Africa’s third-largest mobile phone services provider, in a deal worth $430 million.

“We are going to see more and more of those type of deals happening,” said David Lerche, a telecoms analyst at Johannesburg-based Avior Research. “There are lots of little tower companies running around trying to position themselves as tower outsourcers. It’s quite an interesting development.”

For all its challenges, the market is still attractive, Marc Rennard, vice president of Orange Mobile for Africa, Middle East and Asia, said in an interview.

While investor interest has waned a little, “we are profitable, the big players, the five, six main players are profitable,” he said. “It’s still a good industry.”

-Bloomberg

France Teelcom In Bid For LION2 Cable

Click For Larger Image - Source France Telecom

France Telecom and the other members of the LION2 consortium have signed an agreement to build a new submarine cable in the Indian Ocean. The agreement comes less than a year after the inauguration of the LION (Lower Indian Ocean Network) submarine cable linking Madagascar to the rest of the world via Reunion Island and Mauritius.

With this latest agreement, France Telecom enters the second phase of its Indian Ocean development plan, pursuing its strategy for the regional expansion of broadband internet.

The 3,000km LION2 cable will extend the LION cable to Kenya via the island of Mayotte. The cable will provide Mayotte with access to a broadband internet network benefiting from a transmission capacity and service quality equivalent to those available in Europe. For Kenya, LION2 is an important project that will strengthen its connectivity to international networks and cover its capacity requirements for years to come. The project is being conducted by a consortium of France Telecom and its subsidiaries Mauritius Telecom, Orange Madagascar and Telkom Kenya, along with carrier companies Emtel, Societe Reunionnaise du Radiotelephone and STOI Internet.

The construction of the LION2 cable represents a total investment of around EUR56.5 million, about EUR31.25 million of which will come from France Telecom. Service is scheduled to begin in the first half of 2012.

LION2 relies on wavelength division multiplexing (WDM), enabling capacity to be increased without additional submarine work. The maximum potential capacity is 1.28Tbps. Two new landing stations will be built, one in Kaweni for Mayotte and the other at Nyali near Mombasa for Kenya. The second of these is doubled up with existing stations and will be used to redirect traffic if needed.

Tunisie Telecom Awarded 3G Licence

Reuters reports that the Tunisian government has awarded a 3G licence to state controlled telco Tunisie Telecom (TT) for TND116 million (USD 80 million), putting it in competition with France Telecom's local unit, Orange Tunisia, which launched a joint 2G/3G network in May this year. TT is 65% owned by the state, while Emirates International Telecommunications (EIT) owns the remainder.


 Tunisia was home to 11.42 million wireless subscribers at the end of June. TT and Tunisiana, the local arm of Orascom Telecom, each control 48.7% of the market, while Orange had a 2.6% market share with 297,000 customers after two months of operation.

FT 'Planning to Buy Meditel'

Reuters reports that France Telecom (Orange) is in ‘advanced’ talks with the owners of Morocco's second largest mobile operator Medi Telecom (Meditel) to acquire a 40% share in the company.

Moroccan business weekly Acutel wrote over the weekend, ‘It is official. The negotiations between the owners of Meditel, CDG and Finance.com, and Orange are at an advanced stage,’ and went on to speculate that the stake could be priced at around EUR650 million (USD849 million). Spain's Telefonica and Portugal Telecom last year sold their respective stakes of 32.2% each in Meditel to the operator's other shareholders, Moroccan private investment group Finance.com and state investment vehicle Caisse de Depots et de Gestion (CDG) for USD1.15 billion in total.

Whilst the domestic owners have declared they can run the company alone, they have also indicated their openness to a range of options including a stock market listing and a partnership with a new, major player strategic investor. In March 2010 it was rumoured that the UAE’s Etisalat had ‘agreed’ to acquire a 45% interest in Meditel, which offers cellular, broadband and fixed line services, but a deal did not materialise.

TeleGeography's GlobalComms Database notes that France Telecom sold its Moroccan ISP Maroc Connect (Wanadoo) in August 2004 to the CDG and ONA groups, before ONA bought out CDG in 2005; Maroc Connect became Wana, which launched the successful fixed-wireless and cellular brands Bayn and Inwi, along the way attracting a new foreign investor, Kuwait-based Zain Group.

Orascom Sells Off ISP's

Egyptian telecoms group Orascom Telecom has announced the sale of its two local internet subsidiaries – LINKdotNET (Egypt) and Link Egypt – to mobile network operator Egyptian Company for Mobile Services (MobiNil) for USD130 million. According to Orascom, InTouch Communications, a wholly-owned Orascom subsidiary inked a share sale and purchase agreement with MobiNil, with the deal excluding the non-ISP part of Link Egypt's business, while the other non-connectivity business (LINK Development, LINKonLINE, Connect Ads, Arab Finance Brokerage Company and Arpu+) will also remain under the ownership of Orascom.

The announcement followed the revelation that last week MobiNil shareholders had agreed to the purchase, with the acquisition part of an agreement that settled the long-running legal dispute between Orascom and France Telecom, the two major shareholders in the cellco. Orascom had previously postponed the sale until the settlement of its dispute with the French company.

France Telecom Launches New Plan

Stephane Richard, the Chief Executive Officer of France Telecom (FT) yesterday unveiled an all-embracing five-year project to the press. Dubbed ‘Conquests 2015’, the group-wide scheme is aimed it says, ‘at setting out the challenges and perspectives that lie ahead, clarifying the Group’s business activities and regaining a sense of conquest and pride within the company’. FT’s action plan is centred on the development of its next generation broadband access network, international development, boosting its global customer base by 50% and bolstering a disenfranchised workforce.

FT, which markets its services under the Orange banner, is looking for a fresh start under the guidance of Stephane Richard following a turbulent year underscored by a wave of suicides among its staff.

The broad content of its new so-called ‘industrial project’ may not be new or surprising, but it does mark a shift in emphasis going forward. The state-backed behemoth’s four core tenets, or conquests, centre on: Employee pride, Orange says it aims first and foremost to win over the men and women that form the heart of the company.

The group goes on to say it is committed to offering its employees a beneficial working environment thanks to a new vision of human resources, a new management style and shared values; Networks, in its release Orange ‘reaffirms that its networks are its core business and its future … The conquest of networks means increasing coverage and bandwidth for both fixed and mobile networks, in both mature and emerging countries. In France, Orange will invest EUR2 billion by 2015 to deploy a new fibre-optic network. This will guarantee coverage for 40% of households through coverage in every region of mainland France by 2012 and in every departement by 2015 (including the three overseas territories).

'In addition, the Group has the necessary technological expertise and is ready to launch LTE as soon as the regulations are in place. Orange will also invest in the monetisation of mobile data traffic as well as in the deployment of ‘green’ networks such as the Oryx programme of solar-powered mobile telephone masts in Africa’; Customers, the Group says its long-term ambition is to offer a ‘superior customer experience’ compared to other operators. This includes the analysis and anticipation of needs, technical support, assisted migration to new services and control over expenses, etc … Orange is also developing products in healthcare and education as well as mobile payment or money transfer services such as its Orange Money programme in Africa; and International Development, Orange has also set its sights on reviving what it terms ‘a spirit of growth through international development’.

The telco’s approach will be based on a sound acquisition policy and rules out any ‘transformational’ deals, it said. Sales are expected to double over the next five years in emerging markets. Finally, Orange plans to grow from close to 200 million customers at present to 300 million by 2015 across its entire footprint.

France Telecom Resolves Kenya Duspute Over Missing Assets

A stand-off between the Kenyan government and France Telecom - its fellow shareholder in Telkom Kenya - has been resolved after three months of disputes, reports the EastAfrican newspaper. France Telecom, which purchased 51% of the previously state-owned Telkom Kenya for USD390 million back in November 2007, threatened to withdraw its investment after a failure to trace certain assets that were in the books at the time of purchase.

A joint statement from Treasury Permanent Secretary Joseph Kinyua and Michel Barre of France Telecom read: ‘The Government of Kenya and Orange East Africa SA, a subsidiary of France Telecom SA, are pleased to announce that they have resolved the outstanding shareholder issues regarding the privatisation of Telkom Kenya in December 2007’.

The shareholders said they will now focus on enhancing their partnership, in order to make the company a world-class player for the benefit of its customers and other stakeholders. The statement added: ‘France Telecom Group further confirms its commitment to Kenya as a long-term strategic investor through its participation in Telkom Kenya, which it continues to support through its global ‘Orange’ brand. The Group will continue to provide strategic and technical expertise in order to transform the company and develop innovative products and services’.

Cameroon to Licence More Cellcos

Cameroon’s Minister of Posts and Telecommunications, Jean Pierre Biyiti Bi Essam, has announced that the government will license up to two new mobile operators in the next few months, local newspaper Le Messager reports. The Minister hopes the introduction of further competition in the market will lead to lower tariffs and improved quality of service.

Mr Biyiti Bi Essam also revealed that the government plans to deploy more than 5,000km of fibre-optic cable by 2011 to help the country cope with increased traffic, as well as boost access to broadband services.

Cameroon is home to two wireless operators: market leader MTN Cameroon, which reported a subscriber base of 4.443 million at 31 March 2010, while France Telecom-owned Orange Cameroun followed with 2.829 million customers. The pair have held a duopoly on the market for over ten years.

Late Comer Orange Uses Internet To Penetrate Ugandan Market

Internet and data services are the new forces behind Orange’s penetration into the Ugandan market.  This informs the firm’s strategy as it strives for market dominance amid raging price competition.

MTN Uganda boasts of the largest subscriber base estimated at 5.6 million, an achievement anchored on a low pricing penetration strategy, wide network coverage and attractive user services like MTN Mobile Money transfer.  Zain Uganda comes second with more than two million subscribers after a turnaround strategy driven by sharp discounts on calling rates and improved network quality.  UTL has registered about two million subscribers on the back of sharp price discounts. Its favourite packages include UTL Jazz and UTL Extra that provides one of the lowest off net calling rates in the market.

Calls under the latter profile are charged at Ush320($0.15) for the first and second minutes while the rest are charged Ush270 ($0.12) each.

Orange’s approach is driven by its 3G network that boasts high Internet connectivity speeds backed by solid fibre optic links, minimal interruptions and relatively cheap offers. Its bandwidth for instance, goes for Ush0.9 per KB, the lowest charge in the local market.

Experts also argue that the use of dedicated bandwith packages that are strictly allocated to individual users as opposed to shared bandwidth packages offered elsewhere has strongly boosted growth in the Internet and data services segment.

According to the chief executive Phillipe Luxcey, the firm has recorded a remarkable growth with its highly discounted local and international calling tariffs in the midst of widespread discounts by bigger players.  “Our focus is on a multimedia service that offers high quality voice calls, fast Internet speeds and information services,” said Mr Luxcey.

Orange Uganda commenced operations in March becoming the country’s fifth mobile operator after Zain Uganda, MTN, Uganda Telecom Ltd (UTL) and Warid Telecom.  Orange’s minimum Internet access offer comes with a modem priced at $102 for 1 GB capacity with a monthly fee of $25. Prior to Orange’s entry, many consumers complained of low connectivity speeds and high user fees.

In contrast, Orange’s low-priced, high speed Internet packages have attracted several users keen on downloading heavy pictures, videos and playing music for long intervals.  So far, Orange has registered 10,000 mobile Internet subscribers since the product launch and boasts of total installed capacity of 600MB that can be doubled.

In addition, fibre capacity has been increased sixfold to accommodate customer growth but only 20 percent of international Internet capacity has been utilised, with the rest being sold to local Internet service providers, according to Mr Luxcey.

But analysts believe Orange Internet’s biggest undoing lies in limited network coverage though it boasts 450 live sites spread across the country.  Orange has managed to get only 500,000 out of available nine million subscribers in the voice segment. This is partly due to its lucrative local and international calling tariffs and quality voice reception. Currently, it charges as little as Ush200 ($0.09) for on net calls.

-The EastAfrican

FT, Orascom Finally Agree On Mobinil

The long-running battle for control of Egyptian mobile network operator Egyptian Company for Mobile Services (MobiNil) looks close to being resolved after European telecoms giant France Telecom (FT) and Egyptian group Orascom Telecom announced that they had reached a tentative agreement.

According to Dow Jones Newswires, the proposed accord was announced by the two parties in conjunction with the Egyptian Ministry of Communications and Information Technology (MCIT), which had overseen negotiations. It is understood that under the terms of the deal MobiNil’s current corporate structure will remain unchanged, as will existing voting rights in the cellco, with a statement announcing the deal noting: ‘The two groups will continue their partnership on a renewed basis going forward, implementing a revised shareholder agreement but with no change to the existing ownership structure or their shareholders' voting rights ... This agreement will allow the two telecoms operators to contribute their respective know-how and added value to the successful and profitable development of MobiNil.’

Further, the proposals will also see the integration of local internet service provider LINKdotNET Egypt, at present a wholly-owned Orascom subsidiary, into MobiNil, while FT has also reportedly agreed to change its accounting methods to fully consolidate MobiNil. FT and Orascom claim that the agreement will include settlements for all existing disputes between the shareholders, and full details will be made public once the deal has been finalised, which is expected to be ‘within weeks’.

The revelation comes hot on the heels of the announcement earlier this week that an Egyptian court had upheld an appeal by Orascom which blocked a proposed buyout of MobiNil by FT; FT had offered EGP245 (USD44.4) per share for the stake it did not hold in the mobile operator. MobiNil is owned by MobiNil Telecom (51%) and Orascom Telecom (20%), with the remaining 29% publicly floated. MobiNil Telecom is itself owned by FT (71.2%) and Orascom (28.8%), but following an April 2009 ruling by the International Chamber of Commerce (ICC) Orascom was instructed to sell its stake in the holding company to the French outfit.

Ft and Orascom Plan to Resolve Dispute Over Mobinil

France Telecom and Orascom Telecom Holding have presented a joint plan to resolve their long running and acrimonious dispute over the ownership of Egyptian mobile network, Mobinil. The agreement, which has been signed today and will be finalized over the coming weeks, will effectively bring to an end all disputes in relation to their joint investment in Mobinil.

In a statement, FT said that the two groups will continue their partnership on a renewed basis going forward, implementing a revised shareholder agreement but with no change to the existing ownership structure or their shareholders' voting rights.

The agreement also includes the integration of LINKdotNET - the leading ISP in Egypt - into their holding company, ECMS, allowing the company, subject to the approval of its corporate bodies, to extend broadband and corporate communications services to its 26 million customers; and create value for its shareholders and its 3,500 employees. Dr. Tarek Kamel, the Minister of Communications and Information Technology welcomed this step as the merge between the mobile services and internet services.

Stephane Richard, CEO of France Telecom, said: "I am very satisfied that we have reached an agreement with an entrepreneur such as Naguib Sawiris. Our two groups will now be able to continue working together in order to further contribute to the development of telecommunications services and information technology in Egypt. This market is very important for France Telecom and we will continue to invest and contribute our know-how in the years to come. In addition, this will also reinforce our commitment to maintain a strong R&D and Orange Business Services presence in Egypt."

As a result of the amended shareholder agreement, France Telecom will change its accounting method and will fully consolidate ECMS (ECMS was consolidated through proportional integration in 2009 and before).

The amended shareholder agreement will avail Orascom Telecom Holding operational rights commensurate with its co-owner and strategic partner position, in addition to protection and liquidity rights. Going forward, Orascom Telecom Holding will consolidate its participation in ECMS through equity method.

The outlined agreement will include settlements for all the disputes between the shareholders, the details of which will be communicated once the comprehensive agreement has been finalized.

France Telecom Wants Payment From Kenya

According to local press reports, the first phase of negotiations over the KES28.9 billion (USD385 million) claim which France Telecom (FT) has submitted to the Kenyan government has ended amid secrecy. The French company is demanding the payment following complaints about Kenya’s competitive environment and a scathing attack on the market dominance enjoyed by rival operator Safaricom. Sources familiar with the negotiations told

The EastAfrican newspaper that in addition to the original USD385 million claim, FT has lodged an additional claim of USD300 million on the grounds that Telkom Kenya’s former management concluded a deal with equipment supplier Rapid Communications weeks before the French took over, thereby denying FT a chance to negotiate a deal under whose terms it would inherit future debts.

Court Blocks FT Share Offer For Mobinil

 The Egyptian Administrative Court has blocked a tender offer by France Telecom for shares in Egypt's Mobinil, citing principles of transparency and equal opportunity. At the heart of the matter is a long running dispute between France Telecom and Orascom Telecom Holding over control of the Egyptian mobile network operator.

Last March, ­the Arbitration Court of the International Chamber of Commerce ruled in favor of France Telecom, which has a 71.25% stake in a holding company, also called Mobinil, authorizing it to acquire the 28.75% interest in Mobinil held by Orascom Telecom.

Mobinil owns 51% of ECMS, Egypt's leading mobile operator, which markets its services under the Mobinil brand. This company is listed on the Cairo and Alexandria stock exchange. Orascom Telecom directly owns a 20% stake in ECMS.

Last December, the Egyptian Financial Supervisory Authority approved a tender offer from France Telecom for ECMS outstanding shares at EGP245 each. Orascom has appealed the offer to the court, saying the price is lower than the EGP273 originally agreed to by the international arbitrator. However, the arbitrator had also said that a lower figure could be offered, if France Telecom is able to justify the difference.

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.

Madagascar Connects To EASSy

Madagascar has been connected to the Eastern Africa Submarine Cable System (EASSy), AfricaNews.com reports. Fixed line incumbent Telecom Malagasy (Telma) has announced that it has already put in place a national backbone that will allow it to connect its subscribers to the cable, and it is expected that the arrival of the link will allow for the development of outsourcing activities, such as call centres. EASSy will supposedly enable the transfer of data at speeds 40 times faster than dial-up connections, and 27 operators from 22 countries across Africa’s eastern coast have invested approximately USD260 million in the deployment of the cable so far.

The arrival of the EASSy connection is the second significant cable landing reported in Madagascar in the last twelve months.  In June 2009 Madagascar’s largest mobile operator by subscribers, Orange Madagascar, announced the completion of its submarine cable project, LION, connecting the cable at Tamatave in the Toamasina region. Funded by Orange Madagascar, France Telecom and Mauritius Telecom, the 1,800km broadband cable links with the existing SAT3/WASC and SAFE cable and has a capacity of 1.3Tbps, and it also connects Madagascar with the islands of Reunion and Mauritius.