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Macky Sall discusses end of Sonatel’s concession in October 2017, let the games begin

23 Sep 2014

Talks concerning the ending of Senegalese national PTO Sonatel (Orange’s) operating licences, which are due to expire in October 2017, were the key focus of a meeting called by President Macky Sall this week. Coming only months after a high profile meeting with Stephane Richard, the CEO of the telco’s parent Orange Group, in April 2014 – when Richard reaffirmed the French company’s commitment to Senegal – Sall’s decision to call together no fewer than eight high-ranking ministers and officials to discuss the ending of the concession agreement it first awarded in July 1997, is seen as both politically sensitive and interesting. At a meeting, which was also attended by Sonatel directors, Sall told those present – the Minister of Economy and Finance, the delegate in charge of Budget, the Minister of Foreign Affairs, the Minister of Post and Telecommunications, the ministers Chief of Staff and the Secretary General of the Presidency – of the need to consider Sonatel’s set-up ‘to highlight the strategic and financial interests of Senegal, while ensuring the sustainability of the partner business model.’

The president went on to confirm that the thorough review of the partnership licensing agreement in the country will incorporate all companies involved. ‘For future negotiations, I want the past to serve as a lesson in terms of care, governance and ethics. Accountability will apply to all players in the process,’ he said, calling for ‘a detailed history of the governance of telecommunications in Senegal [to inform] its evaluation of Sonatel’s expiring concession agreement,’ and adding that the assessment will ‘clarify a baseline that identifies before the new agreement, the assets in its six components, namely: the PSTN (landline), mobile network, internet access operations, international transit centre, satellite services and access to submarine cables.’ Further, Macky Sall called on the prime minister to provide ‘before 10 October 2014, a trading plan, which should include objective, sustainable and economically viable proposal, both for the state and for the private operator,’ as well as including ‘new specifications that take into account the issue of employment, universal service, the protection of personal data, but also workers’ concerns related to potential outsourcing projects [outsourcing] from the private operator.’ Not content to rest there, he also called on another official, Mr Dionne, to carry out ‘the exercise of calculating the actual [values] of the key figures of the telecommunications market in Senegal, in particular to determine the average revenue per subscriber for each service [voice, internet, fixed SMS] and the financial consequences of the repeal in 2012 of the Decree on incoming calls, for the three incumbent operators.’ Finally, he tasked the director general of the L’Autorite de Regulation des Telecoms et des Postes (ARTP) to complete a model for monitoring calls and traffic, and a separate model to help in the appraisal of both the financial and technical aspects of bids submitted by would-be applicants for the new franchise agreement post-October 2017, no later than 17 October 2014.

As it stands, Sonatel is owned by Orange Group (42.30%) and the government of Senegal (27.15%). The remaining 30.55% is in the hands of employees and private individuals. Following an amendment of the shareholders’ agreement between Orange Group and the Senegalese government, Sonatel was fully consolidated in the French telco’s results from 1 July 2005. The carrier reported that its net income for the six months ended 30 June 2014 climbed by 6.6% year-on-year to XOF97.67 billion (USD201.42 million). First-half revenue of XOF398.47 billion, compared to XOF356.82 billion in the corresponding period of 2013.

Senegal, Orange Group, Sonatel (Orange)

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