Africell Looks Through Crisis in Bid for Angolan Mobile License

LUANDA (Capital Markets in Africa) — Africell, a London-based telecommunications company, will go ahead with a final offer for Angola’s fourth mobile license even as the African nation struggles with the worst recession since the end of a civil war in 2002.

The company will submit the application by May 1, according to Chief Investment Officer Ian Paterson. The Angolan government, which last month picked it as the only candidate for the 15-year mobile license, will have 90 days to respond.

“We have very high hopes for this market,” Paterson said in an online video interview from London on Wednesday. “The telecoms industry is going to be a critical component of getting through this Covid-19 dynamic and of helping to generate the recovery of the Angolan economy and the regional economy more broadly.”

Measures to fight the pandemic and a collapse in oil prices are expected to lead to a fifth consecutive annual contraction for the southwest African nation’s economy. Angola is the continent’s second-biggest crude producer and the fuel accounts for almost 90% of its exports.

The tender is seen as a test for President Joao Lourenco’s campaign to attract investment, reduce corruption and open up Angola’s economy to more competition.
Africell, which has operations in other sub-Saharan African countries including Sierra Leone and Uganda, has signed a $100-million financing agreement with the U.S. International Development Finance Corporation for the push into the Angolan market, Paterson said.

Funding Options
The company is also exploring other sources of funding and plans to invest “significant amounts” of its own resources in Angola, he said, without giving details.

With more than 12 million subscribers across four African operations, Africell will have to compete with Unitel SA, Angola’s biggest mobile-phone company, Movicel Telecomunicacoes Lda and Angola Telecom. The license covers voice, data and television services.

“The vast majority of the market is still a prepaid market and we will have solutions that appeal to all segments of the market,” Paterson said. “Anybody that will enter and provide a price-competitive and a high quality solution is going to be extremely welcome.”