Orange to offload Ugandan unit to Africell

19 May 2014

French telecoms giant Orange Group has signed an agreement to sell its majority stake in Orange Uganda to Africell Holding for an undisclosed sum, Reuters reports. The deal is subject to approval from authorities and is part of the group’s optimisation strategy to focus on markets in Africa and the Middle East. According to TeleGeography’s GlobalComms Database, Orange Group owns a 65.93% stake in the cellco which claimed a market share of just 3.0% at the end of 2013, with 618,000 subscribers. Its partner in the operator, HiTS Telecom, holds a 31.57% stake in the cellco but fell out with the French group in 2013, accusing Orange of mismanaging the company ‘beyond repair.’ In the lead-up to the deal, it was expected that a buyer would emerge from amongst Uganda’s many existing operators – following the acquisition of Warid Telecom Uganda by Indian-backed cellco Airtel Uganda in April last year there are seven operational cellcos in Uganda including MTN Uganda, Smile Communications, Smart Telecom and i-Tel in addition to those mentioned above. Market leader MTN was tipped as the most likely buyer after the cellco’s chief executive told press in March this year that mergers in Uganda’s crowded mobile sector were ‘inevitable’.

Victorious buyer Africell (owned by Lebanon-based Lintel Holdings) operates mobile services in Gambia, Sierra Leone and the Democratic Republic of the Congo, and currently has over nine million active subscribers across the three countries. Elias Arwadi, chief operations officer of the Africell group, said of the new acquisition: ‘We are confident in achieving a quick turnaround of the operation in Uganda; our operating model has proven that we would be able to offer an attractive proposition to the Ugandan consumer allowing us to quickly climb the market share ladder and bring the operation into profitability.’ Africell CEO Ziad Dalloul added that: ‘Uganda with a population of over 37 million and a penetration rate of 50% was well within the criteria we had set to further expand in Africa targeting high potential and high growth markets,’ while the Lebanese-backed group remains on the hunt to add one more market to its footprint before the end of 2015 to further expand and diversify its portfolio across west, central and east Africa.

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