Cross-border pioneer Celtel eyes Sudan, Malawi, Zambia

Mobile telephone operator Celtel International plans to add three more countries — Sudan, Malawi and Zambia — into its One Network coverage plan.

Only a few weeks ago, the company expanded the One Network to the Democratic Republic of Congo, Congo-Brazzaville and Gabon.

Meanwhile, its competitors in East Africa — MTN in Uganda, Safaricom in Kenya and Vodacom in Tanzania — have responded to its cross-border network by abolishing roaming charges among their customers and lowering charges.

Celtel operates in Malawi and Zambia on the group brand but as Mobitel in Sudan. This is in addition to its coverage in Kenya, Uganda and Tanzania.

Despite its presence in all these countries, it needs an international gateway in some countries like Zambia — a requirement for the One Network plan to work. This could delay its rollout in the country.

Sources told The EastAfrican that it took Celtel 18 months of planning the regional network initiative that was launched in September last year. Its extension to Libreville, Gabon, took another nine months, creating over 160,000 points where customers can buy airtime.

Officials say it will take even less time to cover the remaining three countries, once the company gets past their diverse tax regimes and other technical legalities.

“We are working to make the process faster; it will take less time than it took us to spread from the east to the west coast,” said Celtel’s One Network programme director, George Held.

Celtel officials say the number of subscribers in the six countries covered under its One Network plan stood at 7.5 million at the end of April this year. The addition of another three countries would bring the figure close to 12 million subscribers in a population of about 250 million people.

Industry estimates put Celtel’s share of the market on the continent at 20 million customers which puts it third behind South Africa’s MTN (36.1 million) and Vodacom (25 million).

Celtel’s recent move has jolted Uganda Telecom (UTL) into negotiating a deal with Safaricom, to phase out its old roaming profile for its mobile brand in Kenya.

UTL marketing manager Levi Nyakundi told The EastAfrican that the new deal will allow the company’s prepaid and postpaid customers to receive calls free of charge and make calls at local rates when travelling abroad. Customers, he said, are charged the equivalent of their local call profiles, but the service is still limited to Kenya.

“We are also negotiating with Vodacom to provide the same service,” Mr Nyakundi added. UTL has invested close to $50 million to expand its network.

This rush for innovative means to attract customers has also seen Uganda’s MTN launch WiMax broadband Internet for upcountry users.

Last year, MTN chief commercial officer Eric Van Veen said the company had plans of bringing RwandaCell — MTN’s subsidiary in Rwanda — onto its East African network in a bid to build an even wider network in the region.

World Bank Offers Loans for African Cellphone Networks

IFC, the private sector arm of the World Bank Group, has announced its largest financing to date in Sub-Saharan Africa, a US$320 million package, to five operations of Celtel International (an MTC subsidiary) to help expand and upgrade its fast growing mobile networks in the Democratic Republic of Congo, Madagascar, Malawi, Sierra Leone and Uganda. The investment will result in better quality mobile access in countries with extremely limited telephone services, creating new opportunities for businesses and consumers across the economic spectrum.

IFC will provide a $160 million loan for its own account; it's largest to date in Sub-Saharan Africa. That loan is complemented by another $160 million in syndicated loans with participating commercial banks and parallel loans from bilateral financial institutions. The transaction also marks the first ever mobilization of IFC syndicated loans in Madagascar, Malawi and Sierra Leone, helping to bring long-term (7 year) commercial financing to markets at the frontier of private sector development. The syndication includes three South African banks that are participating in IFC's B-loan program for the first time.

Celtel, which was acquired by MTC of Kuwait in April 2005, will use the funds to modernize and develop the mobile networks in countries with obsolete and inadequate fixed-line networks and very low telephone penetration rates, ranging from just over four phones for every 100 people in Malawi and Madagascar to about 10 per 100 people in Sierra Leone. Since the MTC's acquisition of Celtel it has invested $10 billion in African mobile telecom services.

"Investment in infrastructure such as telecommunications is crucial for Africa's economic development, and our long term collaboration with IFC shows that the private sector can play an important role in fulfilling that need" said Mo Ibrahim, Celtel's Chairman.