Angola Too Small for Four Phone Operators, Dos Santos Says

LUANDA (Capital Markets in Africa) – Angola’s plan to allow a fourth telecommunications company to enter the market will make life tougher for existing operators and probably lead to consolidation, according to Isabel dos Santos, Africa’s richest woman and a shareholder of local wireless carrier Unitel SA.

“Four licences in a 24-million-people market is a non-sustainable scenario,” Dos Santos, the former Angolan president’s oldest daughter, said in an interview during a conference in the Egyptian resort of Sharm El-Sheikh on Dec. 8. “It will probably lead to some mergers at the end of a five or six year period.”

Angola announced plans earlier this month to auction the new license and sell a minority stake in state-owned telecommunications provider Angola Telecom. The move comes as President Joao Lourenco shakes up the business environment he inherited from his predecessor, Jose Eduardo dos Santos, whose family and allies control large sectors of the oil-producing country’s economy. He’s already fired Isabel dos Santos from her position as chairman of state-owned oil company Sonangol.

Isabel dos Santos owns a 25 percent stake in Unitel. The Luanda-based company competes with state-owned fixed-line provider Angola Telecom and mobile company Movicel Telecomunicacoes Lda in Angola, which is struggling to attract foreign investment in a bid to overcome an economic crisis related to the slump in oil price. Crude accounts for more than 90 percent of the country’s exports.

Vodafone Group Plc is in a strong position to win Angola’s new telecommunications license, Novo Jornal reported on Dec. 4, without saying how it got the information.

Dos Santos, whose business interests also include stakes in Angolan banks, a supermarket chain and a beer factory, said she expects the country’s tough business environment to continue next year amid high interest rates, limited access to foreign currency and a possible new devaluation of the local currency, the kwanza.

As for the telecommunications sector and the tender for a new license, the 44-year-old London-educated engineer said: “The telecoms market has become very mature and isn’t as good a business as it was maybe 15 years ago.”

“But it’s interesting, it will probably attract a number of bidders, and competition is always welcome,” she said.

Source: Bloomberg Business News