South African cellphone giant MTN has lost its bid to buy 34 per cent shares in Namibia's sole mobile telecommunications provider, Mobile Telecommunications (MTC). MTN was one of the two companies shortlisted for the deal but Cabinet decided to sell the shares to Portugal Telecom. A bid and evaluation process started in the middle of last year.

"This foreign direct investment is without doubt a very significant milestone for MTC, which has continued to successfully grow and expand the scope of its business at an extremely rapid pace since MTC obtained its cellular telecommunications licence in 1994," Leezhel van Wyk, Company Secretary of Namibia Post and Telecom Holdings (NPTH) said on Friday.

She said Portugal Telecom would add real value to MTC as a shareholder with marketing and technical expertise that will accelerate access to world-class products and services.

"We look forward to growing the MTC business together with Portugal Telecom in the years to come and strongly believe that this association will add value to the Namibian consumer and economy in general," she said. Neither NPTH nor Cabinet has provided reasons for choosing Portugal Telecom over MTN. Van Wyk said the bidding process was transparent.

Cabinet decided to open up the cellular market in the country in 2000 in line with the telecommunications policy and regulatory framework. The policy opened the domestic telecommunications market for private international companies to compete against local firms such as MTC and Telecom. Competition should also lead to higher efficiency and quality, according to Cabinet. Namibia signed a World Trade Organisation (WTO) agreement to liberalise basic telecommunications in February 1999.

However, the actual deregulation, which will include opening up Telecom Namibia to competition, appears to have run afoul of bureaucratic wrangling, as the new telecommunications bill, now three years overdue, has still not made it to Parliament, according to Dr Christopher Storch of the Namibia Economic Policy Research Unit (Nepru). So far, MTC has paid more than N$119 million in taxes to Government.

The Namibian