1 February 2013

Namibia: Bullish Leo Expands Network

The Acting CEO of the country's second biggest mobile operator is confident of turning around the fortunes of the debt ridden entity after its recent acquisition by the government.

Theo Klein told journalists during the unveiling of leo's US$46 million network extension plans Thursday that the company was targeting a 35% to 45% market share in the next five years. Currently, the financially struggling company with debts believed to be around N$250 million, has an estimated 12% market share in the local mobile telecommunications industry dominated by MTC.

A bullish Klein told The Economist that he was 100% confident about the reversal of leo's fortunes. He added: "It is going to take some time, but we are quite confident that we will turn the company around. We are going to capture a sizeable market share that will not only make leo profitable but the whole group."

Asked what the new management will do differently from the previous management, Klein said they have an advantage of being Namibian. He said there are a couple of things that the previous investor got wrong:"First, foreign investors underestimate the market dynamics in Namibia and maybe make wrong investment decisions. We will not make the same mistakes, we are Namibian, we know the Namibian market and we will prioritise our investment decisions so that they make economic sense."

The Acting CEO said the fact that the previous investors started building their own towers and backbone instead of leasing them at the beginning probably inflated their investment.

"Another mistake they made was their market approach; they wanted to capture customers and market size through undercutting prices," he said.

Klein said they are going to flex their muscles and use parent company Telecom's existing infrastructure in the battle for survival.

Meanwhile, Frans Ndoroma the chairperson of leo said the network expansion project, to be financed through a combination of own cash reserves and debt issuance, will deliver a converged switching platform for both fixed and mobile service with an IMS (IP multimedia systems) core for personal multimedia communications.

"It will also deliver mobile radio access networks, both 3G and 4G to expand the overall coverage and data capacity for leo as well as integrating this IMS core with our fixed network to provide a single point for activation and service provision as well as a billing interface with our newly installed state of the art billing system.

Ndoroma said the IMS core platform will give leo customers a big advantage in terms of price and quality of service.

"More importantly, the IMS solution will also support most of Telecom Namibia's existing PSTN/ISDN services and the other multiple legacy interfaces such as POTS. Such support will simplify operations and maintenance and lower operating expenses. In fact it will allow us to use a unified core network and quickly deliver legacy, new and future services."

The leo team said the network upgrade should see 4G average throughputs per user greater than 2.5Mb/s while areas served via the 3G technology will enjoy speeds of 1Mb/s, a massive improvement from the current CDMA average user experience of 320kb/s.

"Furthermore, the roll-out of the new network will immediately enable the delivering of download speeds of up to 100Mbp/s for 4G and 21MBp/s for 3G. This will result in a major enhancement of leo's network quality and efficiency , enabling improved customer experience and richer applications on the mobile platform and strengthening leo's competitiveness," Ndoroma said.

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