Mahanagar Telephone Nigam Limited (MTNL), an Indian state owned telecoms firm, is reportedly considering acquiring a stake in TelOne. An Indian publication, The Economic Times revealed today that MTNL is eying a 51% stake in Zimbabwe’s sole fixed line operator.
In March this year, the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) announced that it had awarded TelOne a GSM license in 2010. TelOne effectively became Zimbabwe’s 4th GSM mobile operator. Even though the license was awarded in December last year, TelOne has basically been sitting on it, or as it appears now, using it to court investors.
A senior MTNL executive is quoted by the Economic Times:
The Zimbabwe government is keen to offload a 51% stake in TelOne, which is the country’s sole state-owned landline operator. Since TelOne also has a GSM mobile permit, it fits well with our plans to enter the African cellular turf in the near future
MTNL’s Mauritius subsidiary head, Sanjay Garg is also reported to have confirmed that discussions were ongoing with the Zimbabwean government but that the actual acquisition would only go through “after MTNL’s soon-to-be-launched GSM operation in Mauritius gains traction by the year-end.”
MTNL currently provides CDMA services in Mauritius. The CDMA network has reportedly not worked out well for MTNL with technology incompatibility seen as the reason. Apparently users that have GSM phones find it easier to subscribe to competing networks Orange Plc and Emtel. This is especially true of tourists using mobile roaming services when they visit the country.
The amount MTNL will pay for the 51% TelOne stake has not been disclosed. It’s also not clear if the government is ready to cede control of TelOne to a foreign company.
This is not the first international telco to have acquisition negotiations with TelOne. In November 2009, South African fixed line operator Telkom was reportedly interested in acquiring a 49% stake in the company and at one point TelOne confirmed the negotiations were at a “very advanced stage”.
African mobile giant MTN, has also been in negotiations with another Zimbabwean state owned telecoms firm, NetOne, and is said to be seeking to acquire a 51% stake. The interest in a getting a controlling stake is what has been reported to be stalling the negotiations.
We have sent some questions to TelOne and we will post an update when we get a response.
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