Mobitel urges no more mobile licences

MTC-owned Sudan mobile firm says too much competition could scupper its $690mn expansion plan.

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By  Reuters Published  July 15, 2007

Sudanese mobile company Mobitel urged the government on Sunday not to issue a further mobile phone licence, saying a new competitor might force it to reconsider a $690 million expansion plan.

Khaled Muhtadi, chief executive of Mobitel, wholly owned by Kuwait's Mobile Telecommunications Co. (MTC), told Reuters he had received reports that the country's telecoms regulator was preparing to issue another nationwide licence in the next 12 months.

"If we are going to get competition from yet another mobile operator then that limits our appetite in terms of spreading aggressively as we are," Muhtadi said. "We have shared our concerns with them. We have informed them [the decision] could backfire."

Sudan's mobile telecoms market grown greatly since a 2005 north-south peace deal ended Africa's longest civil war.

Less than six % of Sudan's population had a mobile phone by the end of 2005, according to Jordan-based analysts the Arab Advisors Group. Just 18 months later, current market estimates range from 11 to 15 % and rising.

Liberalisation of the sector coincided with a sharp increase in revenue from the country's oil industry following the north-south agreement.

Three mobile operators have licences covering the whole of Sudan - Kuwait's MTC, South Africa's MTN and Sudani, an offshoot of the national operator Sudatel. Two small private companies - Gemtel and NOW - also have licences limited to Sudan's semi-autonomous south.

Last month, the chairman of Emirates Telecommunications Corp (Etisalat) told Reuters his company was negotiating with the Sudanese government over a possible move into the mobile market.

No one was available for comment on Sunday from Etisalat or the Sudanese Ministry of Telecoms.

Muhtadi said he met Sudanese telecoms officials to tell them of the possible consequences of handing out a new licence.

"Our hope is that the government will realise that it may hurt the investment environment by basically allowing so many operators into a market such as this."

The company's expansion into the south and hostile environments like Darfur had so far proved very expensive, he added.

"When we first arrived, we announced we would be investing somewhere in the neighbourhood of 500 million euros ($690 million) over the next three to five years. By the end of 2007 we will have invested over 450 million Euros. But now this becomes something to evaluate - is it worth going further investing more?"

MTC completed its acquisition of Mobitel from state-controlled Sudatel in March last year but executives were taken aback when Sudatel launched Sudani soon afterwards.

Mobitel said it currently had 3.3 million customers in Sudan, giving it a leading 52 % share of the existing market. Muhtadi said his plan was to reach 10 million customers by 2010.

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