12 January 2016

Liberia: Global Leader Orange Takes Over Cellcom, Boosts Liberia Sector

Monrovia — According to Orange, one of the world's leading telecom companies, it will enter the Liberian market through a takeover of Cellcom. Orange, which is an internationally traded company on the New York Stock Exchange and Euronext Paris, boast a subscriber base of 263 million and is present in 28 countries. The company employs 157,000 employees worldwide and has an annual turnover of 39 billion euros. The entry of a major multinational corporation such as Orange into the Liberian market is a sign of improving investor confidence in the Liberian economy.

According to a press release, the company asserts that "this acquisition is part of the international strategy of Orange, which aims to accelerate its growth by entering emerging markets with high potential. This will enable Orange to strengthen its position in Africa, which is a strategic priority for the Group".

Orange's decision to acquire Cellcom was based on the company's dynamic performance in the local telecom market and its role as an industry leader in value added services, technology and data. Cellcom has become the leading telecom operator by market share despite entering the Liberian market 4 years after Lonestar. The telecom sector is expected to experience a major transformation as Orange pools its global resources into Cellcom to offer world class technology, service and customer support. Furthermore, Liberia will be linked to a 28 country network of mobile service operators enhancing roaming services around the world.

One industry analyst observed that "with the maturity of the Liberian telecom market, major global operators will be attracted to Liberia, and with their entry, Liberia can expect more capital investment, superior services and integration into larger markets. However, with the entry of such global players as Orange, the regulator will have to get its act together and show upmost professionalism as these companies are used to operating in an environment of regulatory best practices."

According to a source within the Liberia Telecommunications Authority (LTA), the management of Cellcom has already notified the LTA of the takeover of the company by Orange. The source also indicated that the entry of such an investor in the Liberian market is a clear "vote of confidence" in the sector which they regulate.

According to a press release issued by Orange, the founders and employees of Cellcom will continue to be involved in the business to ensure "a smooth integration, support performance and continue long-standing relations with the Government of Liberia."

This investment comes at a time when Liberia is experiencing an economic downturn due to declining commodity prices for such products as iron ore and rubber and the impact of Ebola on the economy. In the midst of declining economic growth projections for Liberia by the IMF, such an investment is welcomed news that could reverberate to other potential investors. New investments in Liberia, such as the Orange investment, will be critical is improving the Government's fiscal space to meet critical infrastructure development

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