19 March 2018

Namibian Black-Owned Firms Enter Mobile Telecoms

Windhoek — Profile Technologies and Demshi Investment Holdings are two black-owned Namibian firms set to enter Namibia's largely monopolistic mobile network industry from July this year, at a time when the largest operator, MTC, is tangled in a web resulting from a scramble over its ownership.

The timing of their arrival in the market coincides with the urgency with which the government finalised the acquisition of the MTC minority shareholding from Samba Luxco, which is facing immediate liquidation in Europe and other markets in which it operates.

Individual shareholders in two new market entrants were this week loud in their insistence that they are not window dressing for foreign companies and that they are bona fide entrepreneurs who have been active in the telecom market for strategic investments for the last three to five years.

Their arrival has coincided with the push by the regulators to break the monopoly in the mobile telecom market. Both the Communication Regulatory Authority of Namibia (CRAN) and the Namibian Competition Commission (NaCC) protested against the sale of Samba shares in MTC to Namibia Post and Telecommunication Holdings (NPTH) - the state-owned shareholder of both MTC and Telecom's TN Mobile. NaCC had it rejection overruled by the trade ministry whose chief concerns were the protection of MTC as an asset and its shares - since Samba is facing liquidation - and did not want MTC shares entangled in the liquidation process. CRAN only acquiesced after receiving assurances and support from the trade ministry that 29 percent of MTC shares would within 12 months be floated on the local stock exchange as one of the several conditions.

The two entrants are however optimistic that the two state-owned mobile telecoms pose no serious threat to their soon-to-be-rolled-out networks.

"We will paint Namibia yellow," says Vaino Nghipondoka, who as the executive chairman of Profile Investment Holdings, which owns Profile Technologies, is the chairperson of MTN Namibia.

Werner Shilunga says Demshi will place emphasis on providing tailor-made innovative products or innovative value-added service. "We would naturally place emphasis on highly technical skills which can constantly develop new products that will appeal to our tech-savvy generation," says Shilunga.

With an air of insouciance, Nghipondoka points out that contrary to the debate around state monopoly in the mobile telecommunications market, it has been the government paving the way to have new private players.

He mentions the gazetting of sharing telecom infrastructure, currently owned by NPTH entities, and the number of portables, which CRAN announced last month is in the final stages of finalisation. "Personally I do not think it is monopoly per se. Government has long ago taken a position to open up [the market] to new players. It is up to us, individuals and business people, to compete with these state-owned and partly state-owned entities in the market," says Nghipondoka.

Eyes are now set on how competition would unfold. Especially when the new operators are set to utilise state-owned entities' infrastructure and backbone for their services roll-out. NPTH has made it known that TN Mobile, a subsidiary of Telecom Namibia, has entered into a relationship with MTN Namibia to expand its mobile virtual network operator services (MVNO), when it comes in the market in June or July this year. Demshi Investments would also be operating on Telecom's MVNO.

Telecom is said to have chosen MVNE South Africa to set up the platform where Demshi and MTN will integrate into the Telecom network. "Me and team are currently reviewing the term sheet and if it reflects how we foresee the relationship between Demshi and Telecom to be in order to make the MVNO a success, then the term sheet will be out of the way by next week," Shilunga said last week.

Further, the arrangement between TN Mobile and MTN Namibia would see MTN utilise the network of Telecom Namibia for a three-year period. NPTH contends that the arrangement between MTN and TN Mobile would ensure that TN Mobile grows its mobile subscriptions beyond 50 percent each year for the next three years.

Meanwhile, the trade ministry, which is now headed by Tjekero Tweya, overturned the NaCC's rejection of the transfer of MTC's 30 percent minority shares from Samba to NPTH through a merger. New Era understands that the shares were transferred to NPTH at a price that is close to the market valuation but which did not include massive profits to Samba's shareholders. Tweya also approved the merger on condition that MTC shareholding transformation will change within 12 months, with NPTH to hold only 51 percent, while the Government Institutions Pension Fund is set to get 20 percent, and the rest are to be floated on the NSX for public participation. It is the same conditions approved by CRAN, only that the regulator asked that MTC is to provide CRAN with progress reports every second month on how far are they in meeting all the conditions.

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