France Telecom mulls Congo takeover

Financial Times.

The French operator, which is aiming to double its revenues in the region from EUR3.2 billion in 2010 by 2015, is counting on rapid expansion in fast-growing African and Middle Eastern markets. This is to offset a gradual decline in its traditional fixed-line business and lower profits from mobile operations in France.

France Telecom wants to bid for the remaining 49% stake, currently held by the Congolese government. The deadline for bids for that stake is 29 July, according to Total Telecom.

Reuters indicates that the CCT deal could cost France Telecom roughly EUR300 million, since CCT has a lot of debt, which would have to be accounted for.

CCT is the fourth-biggest operator in the Congo, a country of 65 million that is covered by a second-generation wireless network. The market is relatively open because there is no dominant operator and only 17% of people have mobile phones.

“Just by increasing the [mobile] penetration rate, there's a pretty big opportunity there,” says Nick Brown, an analyst at Espirito Santo Investment Bank in London. “It's much more appealing than going into a more mature market.”

The country, which has a land area just under one-fourth the size of the US, is still recovering from more than 40 years of dictatorship and war, states Bloomberg.

Last year, the Congolese had a per-capita income of just $300, according to the Central Intelligence Agency's World Factbook.