Reuters is reporting that the government of the West African state of Guinea will seek a new partner for telecoms company Societe des Telecommunications de Guinee (Sotelgui), after Telekom Malaysia International (TMI) returns its 60% stake on 1 September 2008. ‘The government’s option is to open up Sotelgui’s capital, [and] seek a partner with sufficient financial and technical capacity that will allow the company to face an increasingly competitive environment,’ Minister for Communications and New Information Technology Tibou Kamara told Reuters in an interview. Kamara said the exit negotiations with Telekom Malaysia had been ‘bitter and long’. The Malaysian company reported earlier this month it had booked an MYR82 million (USD24.3 million) foreign exchange loss after relinquishing its entire Sotelgui stake, but said this had no impact on its cash flow.
According to TeleGeography’s GlobalComms database, Telekom Malaysia paid USD45 million for the 60% stake in 1995. Ten years later, in January 2005, it announced plans to exit Guinea as part of a broader strategy aimed at focussing on investments closer to its domestic market. In December 2005 Telekom Malaysia took a further step back by handing back all operational and managerial control of Sotelgui to the government, although it remained on the board of shareholders. Sotelgui has a monopoly on fixed line telephony in Guinea, but faces intense competition in the wireless sector from Areeba, Orange, Cellcom Guinea and Intercel.