Angola Telecom’s prospects boosted by government bailout

21 Feb 2014

State-run incumbent Angola Telecom is aiming to post a net profit in 2015 for the first time since 2007 after receiving a USD314 million government bailout to fund debt payments and boost sales, writes Bloomberg in an article quoting chief strategy officer James Wilde, who confirmed that the state’s financial intervention in November 2012 allowed the telco to increase revenue collection, repair and expand fibre-optic transmission infrastructure and move forward with plans to enter the mobile network sector. Wilde said the first priority had been to fix a situation where ‘years of equipment neglect and lax bookkeeping of more than 300 bank accounts’ meant the company only collected ‘about a quarter’ of the USD190 million it was due in phone bills in 2011. ‘We closed bank accounts, increased collections and developed short-term revenue streams while we upgraded the service,’ the strategist said. Angola Telecom made a net loss of USD40.7 million in 2012 but is forecasting net income of USD5.89 million in 2015, according to Wilde, adding that it more than doubled revenue collection from 2011 to USD119 million in 2012 and liquidated all short-term debt, while it has set a 2015 revenue collection target of USD300 million. He also noted that Angola Telecom intends to secure a mobile frequency licence within a year. The incumbent currently owns an 18% stake in Movicel, the smaller of Angola’s two existing cellcos, which was privatised in July 2009, cutting out a large source of revenue for the fixed line firm. Wilde also said Angola Telecom plans to quadruple its number of sales offices to 200 by the end of 2014 and push the marketing of a WiMAX-based voice and data service called ‘Talk and Navigate’. The company, which owns 51% of submarine cable operator Angola Cables, will repair the damaged domestic north-south coastal submarine fibre network ADONES, while fibre-optic cables destroyed by road works following a 27-year civil war that ended in 2002 will also be fixed, Wilde claimed. Finally, the executive said that the telco needs to hire 300 new employees, whilst investing in training for its existing 1,200-strong workforce.

Angola, Angola Cables, Angola Telecom (AT)