Govt abandons plan to privatise Comores Telecom in wake of strong opposition

Telecoms

The government of the Union of Comoros has shelved a plan to privatise the country’s incumbent fixed line operator Comores Telecom (Comtel) and postpone until a later date, after receiving what it terms ‘fierce opposition’ to the plan. Agence Ecofin reports that when the government brought the matter of the privatisation plan to parliament in December last year, it was rejected by a majority of members who were concerned over the fate of the telco’s 1,000-strong workforce. With the process now postponed indefinitely, the state will instead consider moves to issue a second comprehensive and unified licence to bring competition to the market.

The Government of Comoros launched the privatisation of Comtel via an international auction. Under the plan the Ministry of Economy and Finance was looking to divest a 51% stake in the incumbent operator to private investors. The remaining 49% equity would be retained by the government (34%), and 15% will be held by Comtel employees. Prior to then, in November 2012 the government had published expressions of interest for the majority stake on offer, requesting that interested parties submit applications, including information on their business and their reasons for wishing to participate in the tender process.

As a precursor to the sale, the ministry confirmed its intention to restructure Comtel, transferring its primary assets to a new legal entity (Newco). The privatisation of the operator was one of the recommendations of the International Monetary Fund (IMF), as part of the country’s plan to reach the completion point of its Heavily Indebted Poor Countries (HIPC) programme, the external debt relief for which amounted to EUR133 million (USD174.7 million).