ATLANTIQUE TELECOM SET TO PURCHASE ORASCOM'S CONGO ASSETS

Telecoms

Orascom Telecom Holding (OTH) announced that it would sell its 65% equity stake in Congo-Brazaville's leading mobile business Libertis Telecom and its 100% indirect stake in DRC mobile operator Oasis Telecom. Atlantique Telecom looks set to add these two operators to its acquisitions, whilst eying operators in a further two countries.

The price tag, including debt,for 100% of both operations is USD130 million. OTH developed the Libertis operation from launch in 2000 into a highly profitable business with increasing market share each year. The subscriber base increased to over 165,000 subscribers representing approximately 38% market share and total market penetration now exceeds 14% with high revenue per subscriber in a growing market. OTH acquired its stake in Oasis through its ownership in Telecel International Limited (“Telecel”) in April 2000, and expanded the subscriber base to over 75,000 in spite of aggressive competition. The company’s recent expansion outside of the major center of Kinshasa shows the potential of the company to expand as evidenced in the last two years since OTH assumed management control. After completion of the sale, OTH will continue to hold two sub-Saharan

  Atlantique is the new operator that bought back majority shares of Orascom Telecom's Telecel operation in five countries (Gabon, Burkina Faso, Togo, Benin and Niger). The shareholders of Atlantique Télécom also bought back majority in Afripa Telecom, although it has not merged it directly into Atlantique Télécom.

Last year, it also secured a minority stake in Loteny Télécom (TELECEL in Cote d'Ivoire) when Orascom sold its majority stake to it and one of the co-founders, its current CEO. Loteny TELECEL is a pretty successful company with almost 1 million subscribers and by far the largest of the mobile operations it controls. In late January this year, Atlantique was rumoured to have failed to conclude a deal with Loteny's CEO and co-founder to get full control of the company. It is not clear why this deal was not concluded.

In April, Atlantique Télécom sold 50% and granted a 10-year management contract to United Arab Emirates incumbent telecom operator, Abu-Dhabi based Etisalat. With the support of Etisalat, it is now in the process of acquiring majority stakes in 4 more countries in Central Africa. The list is not official yet but DRC and Congo-Brazzaville operations of Orascom look likely to be on that list.

  Discussions with Etisalat were about to be concluded in January 2005 but stopped when Atlantique failed to conclude the Loteny/Telecel deal in Côte d'Ivoire. Finally, it was able to secure the deal with Etisalat, shortly after the Celtel takeover by MTC of Kuwait was announced.

  It seems that the "cash-rich" operators of the Gulf that missed the train in North Africa (where Orascom get major licences in Algeria and Tunisia), are now heading for sub-saharan Africa where the potential is still huge and mostly untapped. And the MTC deal seemed to nudge Etisalat into making a decision despite Atlantique's failure to acquire 100% of Telecel in Côte d'Ivoire. It still has only 17.34% but pre-emption rights for the remaining shares.