MTN, Portugal Telecom favourites to partner MTC

16 Feb 2006

Namibia’s Ministry of Works, Transport and Communications has submitted a document to parliament recommending that the country’s only mobile operator, Mobile Telecommunications (MTC), sell 34% of its shareholding to a foreign strategic partner. MTC confirmed that the two foreign companies being considered are South Africa-based mobile group MTN and Portugal Telecom. MTC is a profitable operator which claims to have GSM network coverage of around 87% of Namibia’s widely dispersed population. MTC is wholly owned by state holding company Namibia Post and Telecommunications Holdings (NPTH), which acquired the 49% that it did not already own in May 2004 from Overseas Telecom and Sweden’s Swedfund International for NAD388 million (USD63 million). According to the government, in addition to the strategic stake sale, NPTH plans to sell a 15% share in MTC to a black empowerment group.

A partial sale of MTC’s stock has been anticipated for some time, as part of liberalisation of the telecoms market which has been in the offing since 2003. Unfortunately, actual deregulation, which would include opening up fixed line monopoly Telecom Namibia (owned by NPTH) to competition, has fallen foul of bureaucratic wrangling, as the new Telecommunications Bill, now three years overdue, has still not made it to parliament. At the end of 2004, the industry regulator, the Namibia Communications Commission (NCC), invited and received two bids from potential new market entrants, one from a Chinese consortium with local links, and a second from state-owned domestic utility NamPower in partnership with Norway’s Telenor. The NCC initially indicated that the bid would be decided upon within a month or two, but ‘technical’ complications have delayed the process ever since. Part of the delay has been caused by misgivings about allowing two state parastatals – NPTH and NamPower – to compete in the same market.