Zambia seeks new rival to MTN

22 September 2017

Telecoms

Zambia is seeking bidders for a fourth mobile network licence to take on operators including market leader MTN in the Southern African country, transport & communications minister Brian Mushimba said.

The ministry last week gave the go-ahead to the telecommunications regulator to start the process, he said in a recorded response to questions on Monday.

The new carrier could be in place over the next six to 12 months and the country may even have capacity for a fifth operator, he said. The local unit of India’s Bharti Airtel and state-owned Zamtel make up the current trio.

The market analysis that we have done supports the fact that we can have a fourth licensee and possibly a fifth

Communication costs in Zambia have been “rather on the high side”, Mushimba said from Lusaka, the capital. “The market analysis that we have done supports the fact that we can have a fourth licensee and possibly a fifth and still the market will be profitable.”

The upcoming auction represents a rare opportunity for international wireless carriers to expand in sub-Saharan Africa without making an acquisition. Slowing economic growth and falling tax revenue have limited space for new providers, while Ethiopia is the only significant market that hasn’t already opened up spectrum to private bidders. Some companies, including Airtel and Millicom International Cellular, have made a partial retreat by selling off country units.

Zambia, Africa’s second biggest copper producer with a population of more than 16m people, had 12.4m active mobile subscribers at the end of June, 10% more than a year before, according to data from the finance ministry. The country had 5.9m Internet users by the end of June, a 3% rise from the figure at the end of December. Almost all of these use mobile Internet.

Source: Bloomberg