14 November 2009
ZAMTEL's new owner could revitalise the company, gaining a 19 per cent share of the mobile market by 2015, up from its current four per cent share, British telecommunications investment consultants, Onda Analytics have said.
Onda Analytics said in its latest report that the privatisation of Zamtel would lead to a major operator taking over Zamtel, providing a serious threat to existing Zambian mobile operators, Zain and MTN.
Interested parties, including MTNL, Telecel Globe (a subsidiary of Orascom), Telkom SA and Vimpelcom officially began due diligence last week.
Onda Analytics' new report considers the strategies that a new owner will need to adopt to turn the operator into a significant mobile player in Zambia.
"Under the right strategy, Onda Analytics forecasts Zamtel to grow its mobile market share from four per cent in 2009 to 19 per cent by 2015, increasing its subscriber base from 160 ,000 to 1.8 million," lead author of the report, Daniel Jones said.
"The new investor will have to turn around an operator in crisis. A strategy along the lines of a new entrant will be needed, as Zamtel has fallen further and further behind in the mobile market," Mr Jones said.
Onda said high mobile tariffs and low penetration in Zambia presented an opportunity for the buyer.
"Aggressive price competition and going after subscribers new to the market will help Zamtel grow its market share and challenge its competitors".
The report also analyses the strategic importance of Zamtel's other assets, including its fixed line network and the WiMAX network currently in deployment.
On top of increasing revenues, Zamtel would need to keep a close check on costs.
"Zamtel's bloated cost base, as a result of its large head count, has led it to insolvency and the current privatisation process," explains report co-author, Tom Harden, partner at Onda Analytics.
Mr Harden said a massive staff reduction programme would need to be carried out by whichever company takes over Zamtel.
"The union has recognised this, hoping to get the best redundancy packages for its members by negotiating with the Government now, rather than the new owner later," explains Harden.
Onda specialises in the provision of essential market information and forecasts in the context of investment opportunities.
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