COMOROS SET TO PRIVATISE INCUMBENT TELCO AS POLITICAL DUST OF LAST DECADE SETTLES

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The slow privatisation of Africa's incumbent telcos has finally reached one of its smaller nations, the Indian Ocean island state of the Comoros. The Island's military leaders have made telecoms and post two separate operations and put themselves in the top jobs. The search is now on for foreign investors who will want to buy into the island's hived off telecoms operation.

Colonel Assoumani Azali, the President of the Comoran Union has decreed the implementation of the country's long awaited telecom reform, by splitting up the National Postal and Telecommunications Company (SNPT). The Post will become known as SNPC and the incumbent telco will be Comtel. However, management of the telephone company remains firmly in the hands of the current military rulers.

Military commander Djamalidine Moissuli will administrate the two companies during the transition. Direct management responsibility for the company will be in the hands current SNPT President Oumara Mgomri. The new telco operation will be split into fixed line and mobile units. The former will be led by the current Defence Minister.

The new company will be a major local employer and is therefore unlikely to trim job numbers before privatisation. It will probably take over 150-200 of the former SNPT's employees. At the end of December 2003 SNPT had 12,300 lines in service, up from 8,900 the previous year and 6,800 in 2000, with most telephones located in government offices or on commercial premises.

The new postal state company, SNPC, also will have the burden of inheriting most of SNPT's old debts. This includes the outstanding bills of an estimated euro 4 million to France Telecom, which had caused the latter to freeze services with Comoros after repayment failures.

Comtel is to start free of large international debts in a government scheme to make the new Comoran telecom provider interesting for foreign investments. A law authorising the liberalisation of the telecom sector and the privatisation of SNTP and its sucessor companies was approved by Parliament already in 1997. Comtel is now searching for a "serious strategic partner" abroad.

The Comoran government has been under the pressure of the World Bank to privatise its telecom sector for several years. SNTP last year was restructured into separated departments and legislation eliminating its telecom monopoly and splitting the telecommunications and postal services into separate entities was approved. The split has however not been approved until now.

According to World Bank sources, "the documentation for the sale of the telecommunications company to a strategic investor is ready, pending the decision by government to proceed, and a license for a cellular operator is being auctioned." This has been the situation for more than one year.

Economic reform in general and reform in the telecom sector has been a slow affair in Comoros due to the political crisis experienced the last decade. The central government in Moroni on Gran Comore has been paralysed by autonomy bids by the three islands forming Comoros; Gran Comore, Anjouan and Moheli. A power struggle between island governments and Colonel Azali's disputed central government has further delayed decision-making.

However this very Comoran power struggle currently seems to be coming to and end. African Union mediation and successful parliamentary elections won by the opposition (to President Azali) have led to a more conciliatory mood in the archipelago. Political stability and a general will to solve national problems however still remain fragile and investors will therefore be difficult to find. The Comoran opposition, reacted to the political appointments in Comtel and SNPC, by announcing their intention to take President Azali's decree to the Constitutional Court for review.

Primetrica, Afrol News