MOBILE OPERATORS CASH IN ON WEST AFRICAN PEACE DIVIDEND IN LIBERIA AND SIERRA LEONE
Some of the best mobile opportunities are coming out of the peace dividend from the end of the civil wars of West Africa. As the smoke clears, the new Liberian Government has been re-examining all the licences given by the last Government. One of the big three regional operators Celtel is poised to launch there shortly. In Sierre Leone Intercellular Nigeria Plc (run by an ex-Nitel corporate planner) is about to start setting up its network. Russell Southwood looks at what the move means in terms of future potential for these markets.
Until recently Lonestar Communications Corporation was the only mobile network operator. Launched in 2001 its network has not extended much beyond the capital Monrovia and Buchanan because of the civil war. Because there is no independent regulator all licences were obtained directly from the Ministry of Post and Telecommunications. Lonestar received the backing of the previous political regime who the current Government say maintained a monopoly for this reason.
In a slightly crab-like set of political moves, the Ministry of Post and Telecom revoked the license of Ducor/Optima Wireless represented by Ambassador Jallah K.K. Kamara. The Minister said Ducor/Optima Wireless representative proved to be unable to live to the terms of the agreement. Minister Eugene Nagbe said this failure to perform and live up to the terms of the agreement culminated in a request by him to Œtransfer’ the license to a group, Celtel Liberia Limited represented. As a result of this, he added, the Ministry of Posts & Telecommunications was left with no alternative but to revoke the license in keeping with statutory responsibility and internationally accepted practices. CelTel (formerly MSI) announced in May that it had been granted a licence and looks set to launch soon.
The other competitor will be Atlantic Wireless plans to launch its LiberCell network in May 2004. It is the leading internet service provider (ISP) in Liberia. The company’s network will initially cover only the Monrovia area, however, and it is difficult to see how it will compete against bigger groups like Investcom and Celtel if it does not expand rapidly to the rest of country. All three plan to start rolling out before the end of the year.
There are currently 6,000 fixed lines and about 50,000 cellular subscribers despite very limited coverage and relatively high prices. There are no interconnect agreements in place between the three operators. Celtel belives that current mobile prices are too high and that therefore there is plenty of market potential despite late entry. Company sources estimate that it will capture 31,000 subscribers in year one rising to 110,000 in year three. It will roll out its network to Monrovia, Robertsfield, Kakata and Buchanan, still a relatively modest enclave of coverage. Celtel also has an unexploited licence in neighbouring Guinea.
Digital Wireless operator, Intercellular Nigeria Plc, last week announced the expansion of its services to Sierra Leone with an operating license to offer a basket of mobile cellular, fixed line and VSAT gateway for international trunk services.
The Nigerian company holds a national operating license for national digital wireless servicess in the country, providing networks in Lagos, Port Harcourt, Abuja, Kano, Kaduna, Maiduguri and recently, Zaria. Intercellular Nigeria hope to commence services in Minna, Niger State in the next quarter.
CEO Bashir Ahmad el-Rufai said the company will operate under the business name of Intercellular Sierra Leone with its full legal complement and business autonomy.
According to Mr. el-Rufai, the current Vice-President/Northern Operation,Mr. Abubakar Nahuche, has been appointed the chief executive officer of the new company while a member of the company’s board and former Minister of Communications Mr. Ahmed Aboki Abdullahi, would serve as the chairman.
Intercellular Nigeria controls a majority share under an offshore joint ventrue agreement between Intercellular and local investors in Sierra Leone.
According to el-Rufai, "When we started, a lot of skeptics did not understand what deregulation meant. We took a huge risk, what if the military came and our response was never again. Today, we look at Freetown, and we say never again, and that is why we are going there. It is good for us, it would be good for the people of Sierra Leone and it would pay Nigeria as the leading light of Africa."
However there are already three mobile operators and a mobile incumbent so Intercellular will have its work cut out getting a foothold in either the mobile or fixed market. But its to an international gateway has to be a useful advantage.