African mobile market attracts Portugal Telecom

LISBON – Portugal Telecom, the nation’s largest telecommunication’s operator, is seeking to expand in Africa beyond Portugal’s former colonies to tap into the continent’s fast-growing mobile market.The former state monopoly signalled its renewed focus on the region in June when it announced it was grouping all of the businesses it manages in Africa under a new holding company, Africa PT.

The goal is to streamline Portugal Telecom’s existing operations in Africa, where it has about four million mobile subscribers, and use the experience it has in the region to break into other markets. Earlier this month the company presented a bid for a 34 per cent stake being privatised in Namibia Mobile Telecommunications.That followed its bidding in September for a 35 per cent stake in state-owned Tunisia Telecom.In 2004, Namibia Mobile Telecommunications had 410 000 mobile subscribers and posted revenues of 113 million euros (135.7 million dollars), while Tunisia Telecom has 3,2 million clients and posted revenues of 710 million euros.”Africa has enormous potential and we have enormous competitive advantages there,” Portugal Telecom chief executive Miguel Miguel Horta e Costa told business daily newspaper Diario Economico last week.While the proportion of people using mobile phones in Africa remains low in international terms, the continent has the highest level of mobile use growth, according to the UN’s International Telecommunication Union (ITU).The number of mobile users in Africa is expected to reach 67 million at the end of 2005, compared to 15,7 million users in existence in 2000, due in part to long waiting times for fixed-line connections, ITU figures show.As only about half of sub-Saharan Africa is covered by a mobile signal, the number of Africans with mobile phones should rise further as cell-phone relay towers sprout up across the plains and mountains of the continent, the ITU says.Ricardo Pimentel Seara, a telecoms analyst with Portuguese bank BPI, said Portugal Telecom could benefit from high growth rates and the possibility of economies of scale in Africa.”The possible expansion in Africa through acquisitions or privatisations I think is good for Portugal Telecom strategically, depending on the prices which could be paid,” he told AFP.Portugal Telecoms plans to make its base in Africa oil-rich Angola, whose economy has been one of the world’s fastest-growing since the end of a 27-year civil war in 2002.Angolan mobile phone operator Unitel, in which Portugal Telecom has a 25 per cent stake, saw its client base soar to 540 000 in 2004 from just 44,000 two years earlier.Unitel said it had added 395 000 new mobile subscribers during the first nine months of 2005.Its revenues hit 240 million dollars last year, double the amount achieved in the previous year.In Africa, Portugal Telecom offers mobile services in three other former Portuguese colonies – Cape Verde, Guinea-Bissau and Sao Tome and Principe – as well as in Morocco where it operates jointly with Spain’s Telefonica.The company, which is facing steep competition in Brazil, expects the number of mobile subscribers in Portugal’s former African colonies alone could reach five million by 2008 from around one million today.To reach this goal the firm is interested in entering the mobile market in fast-growing Mozambique, the only former Portuguese African colony where it is limited to fixed-line services.It also sees the establishment of a single cross-border, single brand for Africa as a possible engine for growth.”I would like that to happen but it is a sensitive issue, and it is such an important step that it is premature to discuss it,” the head of the firm’s international investment division, Carlos Vasconcellos Cruz, told weekly newspaper Expresso last June.Portugal Telecom earns about 30 per cent of its revenues outside of Portugal, mostly in Brazil where it operates jointly with Telefonica.Last year the firm posted a net profit of 500., million euros, up from the 240,2 million euros recorded in 2003 due to increased mobile phone revenues.- Nampa-AFPEarlier this month the company presented a bid for a 34 per cent stake being privatised in Namibia Mobile Telecommunications.That followed its bidding in September for a 35 per cent stake in state-owned Tunisia Telecom.In 2004, Namibia Mobile Telecommunications had 410 000 mobile subscribers and posted revenues of 113 million euros (135.7 million dollars), while Tunisia Telecom has 3,2 million clients and posted revenues of 710 million euros.”Africa has enormous potential and we have enormous competitive advantages there,” Portugal Telecom chief executive Miguel Miguel Horta e Costa told business daily newspaper Diario Economico last week.While the proportion of people using mobile phones in Africa remains low in international terms, the continent has the highest level of mobile use growth, according to the UN’s International Telecommunication Union (ITU).The number of mobile users in Africa is expected to reach 67 million at the end of 2005, compared to 15,7 million users in existence in 2000, due in part to long waiting times for fixed-line connections, ITU figures show.As only about half of sub-Saharan Africa is covered by a mobile signal, the number of Africans with mobile phones should rise further as cell-phone relay towers sprout up across the plains and mountains of the continent, the ITU says.Ricardo Pimentel Seara, a telecoms analyst with Portuguese bank BPI, said Portugal Telecom could benefit from high growth rates and the possibility of economies of scale in Africa.”The possible expansion in Africa through acquisitions or privatisations I think is good for Portugal Telecom strategically, depending on the prices which could be paid,” he told AFP.Portugal Telecoms plans to make its base in Africa oil-rich Angola, whose economy has been one of the world’s fastest-growing since the end of a 27-year civil war in 2002.Angolan mobile phone operator Unitel, in which Portugal Telecom has a 25 per cent stake, saw its client base soar to 540 000 in 2004 from just 44,000 two years earlier.Unitel said it had added 395 000 new mobile subscribers during the first nine months of 2005.Its revenues hit 240 million dollars last year, double the amount achieved in the previous year.In Africa, Portugal Telecom offers mobile services in three other former Portuguese colonies – Cape Verde, Guinea-Bissau and Sao Tome and Principe – as well as in Morocco where it operates jointly with Spain’s Telefonica.The company, which is facing steep competition in Brazil, expects the number of mobile subscribers in Portugal’s former African colonies alone could reach five million by 2008 from around one million today.To reach this goal the firm is interested in entering the mobile market in fast-growing Mozambique, the only former Portuguese African colony where it is limited to fixed-line services.It also sees the establishment of a single cross-border, single brand for Africa as a possible engine for growth.”I would like that to happen but it is a sensitive issue, and it is such an important step that it is premature to discuss it,” the head of the firm’s international investment division, Carlos Vasconcellos Cruz, told weekly newspaper Expresso last June.Portugal Telecom earns about 30 per cent of its revenues outside of Portugal, mostly in Brazil where it operates jointly with Telefonica.Last year the firm posted a net profit of 500., million euros, up from the 240,2 million euros recorded in 2003 due to increased mobile phone revenues.- Nampa-AFP