Time for African Businesses to harvest the ICT field

with Nickey Mannya

Africa, the world's least wired continent, is advancing closer to reliable telecommunications and affordable Internet access. This is evident in the number of undersea cables that are currently under construction, in their inception stages or perhaps in ownership negotiations.

Construction of another 10,000-kilometre undersea fibre-optic cable connecting 21 East, Southern, and Central African countries to West Africa and Europe is to begin December 2007 following the announcement that the International Finance Corporation (IFC) and others have come up with 70.7 million dollars in financing for the project.

"The project will transform the African telecommunication landscape and have a direct positive impact on business in East Africa," Lars Thunell, chief executive at the World Bank's private sector arm has said. This comes weeks after a South African lead Seacom (a 15, 000-kilometre undersea fibre-optic cable connecting the continent to the international markets) announcement of its intentions to begin construction earlier in November 2007. This can only be good for business in Africa.

Whilst this is happening, the ICT market in African has just gotten ready for the harvesting. London-based private investment equity firm Helios International is financially backing telecommunications holding company Afri Tel, in a bid to secure a 66.7% stake in fixed-line incumbent Ghana Telecom (GT).

The move is part of the joint venture partnership between Helios Investment Partners and Portugal Telecom (PT) to expand the latter's telecommunication portfolio across the African continent.

Afri Tel Holdings was set up in July 2007 by PT to consolidate its various telecommunication stakes within Africa. PT then sold 22% of the Afri Tel Holdings to Helios Investment for $171 million, in a bid to help expand PT's “African telecommunications portfolio.

The stakes include Angola (Unitel and Multitel), Mozambique (Teledata), Cape Verde (CV Telecom), Namibia (MTC), Botswana (Mascom), Guinea-Bissau (Guinetel), Sao Tome and Principe (CST).

Earlier in November, France Telecom fought off three rival bidders including South Africa’s Vodacom to pay $390m for a majority stake in Telkom Kenya, the incumbent state monopoly in the country.
The French is buying 51 per cent of Telkom Kenya, a loss making group that is best known for the poor quality of its fixed-line services but also owns a mobile license on which it has yet to build a business.

The telco plans to market Telkom's services under its Orange brand and that its strategy would be to combine mobile, fixed-line and internet services.

The deal will, in effect, break the mobile phone duopoly in the country and pitch France Telecom against Vodafone because the UK group owns part of Safaricom, which serves about 70 per cent of Kenyan mobile users and is being prepared.

Still in Kenya, Nairobi seems to be fast becoming the unrivalled hub for ICT in East Africa. Technology firm, Cisco Systems has set aside Sh1.3 billion over the next 24 months to beef up its administration and equipment in the region.

It goes to show that with the right kind of foundation, Africa could really be open for business. If international business looks to our continent for growth, it is only a matter of time before the lower ends of the market reap the rewards if the processes are kept in tact and focus remains on uplifting the grassroots.


Apart from the major international takeovers mentioned above, there are other intra-Africa mergers and acquisitions taking place including Libya buying into Rwanda’s telecom, MTN group increasing its stakes in several African operations, Uganda Telecom’s IPO and Safaricom’s IPO. These and more could only spell one thing; it is time for African businesses to harvest the ICT field and in my view, this is long overdue.

It would even be a pleasure if we could start witnessing the rise of African entrepreneurs now that the stage is set.

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