By Iminza Keboge
Published January 13, 2016
A French telecommunications operator has acquired Liberiaâ€™s leading mobile service provider.
France Telecom, that trades as Orange, announced on January 12, 2016 that it had entered into a firm agreement with Cellcom Telecommunications Limited to acquire, through its subsidiary, Orange CÃ´te dâ€™Ivoire, 100% of Cellcomâ€™s Liberia subsidiary; Cellcom is said to have a strong market commercial momentum.
Orange will provide its marketing expertise and technical capability to further strengthen the network operator, enhance services to consumers and contribute to the economic growth of Liberia. Cellcomâ€™s founders and employees will remain involved in the business to ensure a smooth integration, support performance and continue long-standing relations with the Government of Liberia.
This acquisition is part of the international development strategy of Orange, which aims to accelerate its growth by entering new emerging markets with high potential. This will enable Orange to strengthen its positions in Africa, which is seen as a strategic priority for the Group.
This comes in the wake of Orange having sold its 70% stake in Telekom Kenya to a UK private equity firm, Helios Investment Partners, in 2015. Orange exited the Kenyan market after eight years of not-so-great performance. The French company entered the Kenyan market in 2007. It held 70% shareholding alongside 30% of the Government of Kenya. Could its lackluster performance be explained on its having tried to trade in an Anglophone African country? How could a privatised company had fared worse than it did as a state corporation? The company’s revenues in 2006, just because Orange got in, were US$120 000 000; this dropped to US$95 000 000 in 2015, according to Orangeâ€™s own financial report.
Liberia is a country of more than 4.3 million inhabitants, with a mobile penetration rate of 66%, lower than in many neighbouring countries. With a national mobile license and its significant market share in the country in number of subscribers, Cellcom has great potential for growth over the coming years.
The completion of the transaction remains subject to approval by the competent authorities.