LAP GreenN to enter the fray for Orange

17 Mar 2014

Libyan government-owned investment vehicle Libyan Africa Portfolio’s (LAP’s) telecoms division LAP Green Networks (LAP GreenN) is understood to be interested in entering a bid for Orange Uganda, TMT Finance writes. The Libyan firm currently holds a majority stake in Uganda Telecom Ltd (UTL), the fixed line incumbent and the nation’s third largest wireless provider by subscribers. France’s Orange Group has hired Lazard to assess its options for its Ugandan division, and is expected to look to exit the crowded sector as part of a strategy to leave African markets where it is not the largest or second largest provider, a policy that Orange has already implemented across its European holdings. According to TeleGeography’s GlobalComms Database, Orange Uganda ended 2013 with 218,000 subscribers, equating to a market share of around 3.0%. With six functioning network operators and a seventh due to launch this year, Uganda’s wireless segment is ripe for consolidation. Indeed, Indian-backed Airtel Uganda kicked-off the process with its acquisition of Warid Telecom Uganda in Q2 2013. LAP GreenN was reportedly amongst those competing to take control of Warid, but was outbid by Bharti Airtel.

Also understood to be interested in acquiring Orange Uganda are South African groups Vodacom and MTN. The acquisition of Orange would allow Vodacom to gain a toehold in the crowded sector, but it would face an uphill challenge in transforming the cellco, with its meagre market share, into a serious competitor to leading providers MTN and Airtel. MTN’s local division currently leads the market, representing more than 40% of the space. By taking control of Orange it would solidify its lead over challenger Airtel, whilst enabling it to focus more heavily on the nascent data segment.