France Telecom is considering increasing its presence in the Southern African telecommunications space, in light of its announcement of a joint venture (JV) with Hits Telecom Uganda.
The company, a subsidiary of global telecoms giant Orange, says it will consider investments in Southern Africa if it meets its growth potential criteria and if opportunities come at reasonable prices.
“We are already present in 15 African countries, including Botswana, Madagascar and Mauritius. And we could possibly consider other opportunities in Southern Africa if they meet our criteria in terms of market growth potential and are available at a reasonable acquisition price,” says France Telecom spokesman Tom Wright.
Wright notes the company is interested in the growing telecoms markets across Africa. France Telecom cemented its stake in East Africa through several acquisitions, including a majority share of Telkom Kenya in December 2007, which was succeeded by the launch of mobile activities in Kenya, in September 2008.
“The creation of Orange Uganda clearly demonstrates our commitment to establish ourselves in this region for the long-term,” he says.
Taking over East Africa
France Telecom announced earlier this week it will go into a JV with Hits Telecom Uganda. The JV will see the creation of Orange Uganda, which is 53%-owned by France Telecom. A statement from France Telecom says Hits Telecom Uganda will provide Orange Uganda with its national licence. Orange Uganda will also utilise Hits Telecom Uganda's GSM network and main telecoms assets.
Wright adds France Telecom will take responsibility for the management of the new company, the investment necessary for development, launch of a fully operational network, and provision of its know-how, as well as the support and experience of its teams worldwide.
France Telecoms says it is too soon to speculate which other Southern African countries it is willing to invest in. Yet it maintains there is room for growth in the region.
Opportunities everywhere?
BMI-TechKnowledge analyst Brian Neilson says France Telecom is one of the largest global players to have invested in Africa. “Neotel's shareholder, Tata Group, has the third-largest market capitalisation (after Vodafone and France Telecom) among all the global players that are currently highly invested in telecoms operators on the African continent,” he says.
IDC analyst Richard Hurst says there are many opportunities for growth in the Southern African telecoms sector, with increasing interest from international investors and network operators seeking to maximise revenue and profit.
Neither analyst would speculate as to where France Telecoms would head to next in the Southern African region.
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