Angola’s Telecoms Liberalization Takes Off As Africell Buys License
For perhaps the second African telco to get an official green light this year, Africell has gotten the paperwork needed to enter its fifth African market.
An Africa-focused mobile network operator, the telco has finally secured the license to become the fourth telecoms service provider in Angola. This acquisition comes on the heels of Airtel Africa’s USD 191 Mn decision to retain operations in Nigeria—its biggest African market—for the next 10 years.
The development which prepares the United Kingdom-headquartered firm’s for a mid-2021 launch in the country, comes ahead of the Angolan government’s ongoing efforts to open up some of its markets.
By entering Angola, Africell will face competition from existing operators such as Movicel, and Unitel. More importantly, it will also be joining Angola Telecom, a state-owned telco that occupies the third spot in the market share table.
Africell already has operations in Uganda, Sierra Leone, The Gambia and the Democratic Republic of Congo, which is a fair mixture of Francophone and Anglophone African countries for a company with English roots.
Telecommunications is one of Angola’s heavyweight sectors, which is why the government want to diversify the country’s economy and boost private sector participation. Part of the reform involved increasing affordable mobile and internet access for social development.
Angola’s telecoms markets isn’t closed like Ethiopia’s, but there are ongoing efforts to encourage more investments. One of them is selling a 45 percent stake in Angola Telecom, as a way to liberalize, reorganize and expand the state-controlled sector.
The two partially public mobile operators in the nation—Unitel and Movicel—are not competing against each other and the national carrier well enough. If they were, the prices won’t be high and the quality of network services in the country won’t be low. Even in the fixed line market segment, there is a duopoly between Angola Telecom and MSTelecom, a Sonangol subsidiary.
By issuing a telecoms license to a private mobile carrier, Angola is perhaps already speeding up the liberalization of its economy. For fact, Africell is expanding to the country about 2 years after securing USD 100 Mn from the U.S. Development Finance Corporation in 2018 to fund its expansion strategy.
And, according to an official statement from the company, securing an Angolan license draws it closer to investing “several hundred million dollars” in infrastructure and services. But that’s only during the first phase of its rollout in the country. Its operations are expected about 6,500 jobs in the next 5 years.
The operator’s chief investment officer, Ian Paterson, noted that the Angolan telecoms market is attractive because of the little real competition. According to him, new players in the market would foster more competitive pricing and service quality. There’s a plan for Africell to offer more creative and flexible pricing plans with more high-speed solutions and value-added services.
Another plan is for the operator to offer mobile money services in Angola, where Unitel and Movicel enjoy a market duopoly.
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