G-Mobile of Malawi Gets U.S.$30 Million Capital Injection and will be managed by Telkom SA


Private equity investor Musa Capital is investing about $30m in Malawi's third cellphone operator, G-Mobile, and is eyeing similar investments in other African countries, including South Africa. Fifteen-year-old Musa Capital has been snapping up cellphone network licences and opportunities for the distribution of airtime in Africa.
Musa Capital owns 50% of Johannesburg's Beryl Telecoms, which owns the majority stake in G-Mobile, the new Malawian operator that plans to launch before the end of the year. The company will compete with Zain, which was bought by India's Bharti Airtel earlier this year.
The founder and executive director of Musa Capital, William Jimerson, said last week that Malawi's cellphone penetration is about 45% and there is an opportunity for G-Mobile to gain a 10%-12% market share.
"We believe there are areas where our competitors are not strong and that will be an opportunity for G-Mobile. In Malawi, there exists a very real need for a cellular network operator that provides excellent service," Jimerson said.
G-Mobile has also roped in a subsidiary of Telkom , known as Telkom Managed Services, to manage the business. "The company's goal is to establish a high-quality service to distinguish it from competitors," said G-Mobile CEO Peter Davies.
The G-Mobile funding comes from Musa Capital's second fund, which has R575m for investment in sectors like telecommunications, property, finance and retail. Its first fund contained $40m, all of which was invested in the same sectors. Over the past 18 months, Musa Capital has closed 11 investments in five sectors covering nine countries.
In the telecommunications industry, Jimerson said Musa Capital has a presence in Zimbabwe and Burundi, where it distributes airtime. It has shares in Sonatel, Senegal's fixed-line operator, and in Uganda it has partnered with local companies to invest in MTN Uganda. The company is eyeing similar opportunities in other countries, including Mozambique.
"The telecommunications sector is a natural fit for us as the background of the three founding members of Musa Capital is in that area," he said.
In South Africa, Jimerson said the opportunity will be in telecommunications infrastructure sharing and also in value-added services. "We will probably look at SA when we open our third fund," he said.