At N$2, Leo Was a 'Handy Gift' for Telecom Namibia

Mergers, Acquisitions and Financial Results

Telecom Namibia, which acquired second biggest mobile operator, Leo in November last year, for a paltry N$2 says the deal was a "handy gift" ahead of its 20 years anniversary.

Speaking ahead of the ICT summit, which the company will host next week, Oiva Angula Senior Manager of Corporate Communications and Public Relations said in an interview the price was justifiable given Leo's poor financial state at that time.

"I must say that the selling of Powercom t/a Leo was a handy gift which came as Telecom Namibia was celebrating 20 years of exemplary service to Namibia and its people. Telecom Namibia strategically decided to go GSM and the opportunity to buy up Powercom t/a Leo just came at the right time for Telecom Namibia," he said.

The acquisition made Leo a 100% Namibian company, owned by Telecom Namibia. "This is a very significant development for the cellular industry in Namibia. Moving forward we fully intend to ensure that we extend the Leo services to all Namibians in the shortest possible time. Secondly, the most important goal is to provide Namibians with fixed-mobile converged services, thereby providing value for money to customers," he said.

"The sale price was N$2. This was deemed a fair price given the state of Powercom."

With this development, all the major telecoms companies are now state owned but Angula does not see this as a problem. "Yes, the regulator Communications Regulatory Authority of Namibia (CRAN) and not the state approves tariff structures by all the operators in Namibia. Telecom Namibia/Powercom and MTC are established on commercial principles and are expected to enhance shareholder returns in their own way."

Asked whether MTC and Leo running on different technology systems, is this not a duplicate and waste of resources, Angula said where possible all backbone infrastructure will be made available to all operators.

"The technology differentiations are on the access networks which is standard practice. Yes we are making use of the NamPower overhead cables as part of our national express routes," he said.

"We have already begun to invest millions in the Leo network to provide greater coverage," Angula said.