Orascom reports impressive customer growth, begins closing sub-Saharan networks

20 Jul 2004

Orascom Telecom Holding has announced that its total subscriber base rose by 93% to 9.3 million in the year to the end of June 2004, thanks to particularly robust performances from its core Algerian, Egyptian and Pakistani subsidiaries. The Cairo-based cellco, which added 1.1 million new customers in the second quarter of 2004 alone, said its domestic subsidiary Mobinil (of which it owns 31.2%) witnessed a 28.5% rise in customers over the year, to end the period with 3.29 million connections, 76% of which were pre-paid. Its second largest division by subscribers, Pakistani GSM operator Mobilink (88.7%-owned), recorded an impressive 160% rise in customers to 2.8 million, all but 5% of which were pre-paid, whilst Algerian operator Djezzy (58.5%) witnessed even greater growth, with subscribers increasing by more than 186% to 1.98 million. Orascom’s newest operation, central Iraqi cellco Iraqna, ended June with 216,500 subscribers. Its other subsidiaries include Tunisian operator Tunisiana, which had 711,670 subscribers at the end of June, representing an annual rise of 182.8%, Republic of the Congo cellco Libertis (119,710, up 30%), Telecel of Zimbabwe (121,388, up 5%) and Democratic Republic of Congo service provider Oasis Telecom (48,070, up 64%).

In a separate announcement Orascom said it had reached agreement with the Pakistani telecoms regulator to extend Mobilink’s operating licence for an additional 15 years after the expiry of its current concession in July 2007. To secure the renewal until 2022, Mobilink had to commit to licence fee payments of USD291 million, half of which is due in three years time, with the remainder to be paid in equal annual instalments over the following ten years. Mobilink has experienced extraordinary growth in its short history: its subscriber base increased from one million in February 2003, to two million in December of the same year. It announced the connection of its three millionth customer on 18 July 2004, which it claims gives it a 63% share of the country’s burgeoning GSM market; Mobilink competes with Pakcom, Paktel (both of which are majority owned by Millicom International Cellular) and Ufone (owned by national fixed line operator PTCL).

Along with Djezzy and Mobinil, Mobilink is a key component of Orascom’s core north African and Western Asian focus, the three accounting for 87% of the operator’s total subscriber base at the end of June 2004. Orascom recently announced its intention to divest its sub-Saharan shareholdings by the end of the year, and to this end said that it would be suspending and ultimately divesting its operations at TchadMobile, a start-up in Chad, due to an unresolved disagreement with local authorities. Its dispute arises from the decision by the Chad Ministry of Telecommunications to invalidate the transfer of 51% of the shares in TchadMobile to Orascom, despite the fact that a valid agreement was apparently entered into in late 2002 with Sotel, Chad’s fixed line operator and former owner of the shares. Orascom has said the situation has not been helped by Sotel’s failure to make interconnect payments to TchadMobile since 2000.

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