MTN acquires Congo company

By Damaria Senne, ITWeb senior journalist

Johannesburg, 13 Dec 2005

The MTN Group has acquired a 100% stake in Libertis Telecom, one of two cellular network operators in the Republic of Congo (Congo Brazzaville). The deal, which is said to be worth R650 million, brings the number of countries MTN has operations in to 11.

According to group CEO Phuthuma Nhleko, the acquisition of Libertis Telecom is in line with MTN`s strategy to consolidate its position as the leading provider of telecommunications in developing markets and further entrenches its leadership on the African continent.

The acquisition of Libertis is testament to MTN`s knowledge that its entry into emerging markets fuels its economy, says MarketWorks business and strategy advisor Craig Terblanche. He says as MTN uses partners to deploy infrastructure, there is no danger of the company spreading its resources too thinly.

To date, MTN has invested more than R23.4 billion in infrastructure on the African continent, with capital investments amounting to R7.6 billion over the past reporting period alone.

The acquisition provides an opportunity to sew up African markets while the opportunity to do so still exists, says BMI-TechKnowledge telecoms analyst Richard Hurst.

"However, Congo has an estimated population of over three million, with a mobile subscriber base of 330 000, implying that there is still much growth to be had in the mobile sector of the country," he says.

Opportunities drying up

MarketWorks analyst Leora Kudo agrees. She says given the fact that Congo`s fixed-line infrastructure and client base is miniscule (7 500 fixed lines) compared to its population, the market for mobile telephony has to be a major opportunity for MTN.

"If MTN thinks beyond the obvious, there are opportunities in Congo to provide services beyond mobile telephony," she says.

MTN has indicated its intention to grow the 190 000 Libertis subscriber base. Also, the mobile operator says it has already identified a variety of products and services to introduce to the Congolese markets.

According to UK-based Balancing Act CEO Russell Southwood, MTN`s snapping up Libertis is opportune as opportunities for mobile companies to expand within Africa are drying up.

"MTN and others will continue to pick up occasional licences in Africa but the number of new opportunities of any scale is very small," he says.

MTN also confirms it has submitted its bid for a 34% stake in Mobile Telecommunications Company (MTC) of Namibia. The Group has not entered into any agreements with any other parties in this regard.

MTC is said to have 410 000 subscribers at the period ending 30 September.