MTN in Ghana and Cellular Telephony in Senegal

I got the following text in my email yesterday, from someone I know. My reply follows the text.

According to “Northern African Wireless Communications” Feb./March 2006, the “combined revenues” for the two mobile operators in Senegal, Sonatel Mobile and Sentel, came to just two million dollars in 2004. From what we know about comparable figures in Ghana this seems way too low.

Can anyone comment on the figure for Senegal?

I am looking at these business aspects in relation to the big boardroom changes concerning mobile telephony in Ghana. The creation of an mtn-investcom “enlarged group” refers but so also does the impending sale of Millicom (Tigo). On the former, it may be required to look at www.mtninvestcom.com to get a feel of the line of hte major parties themselves. It looks very different from the media commentary, especially in Ghana. Nigerian media commentary, appears, in my view, more spot on.

My reply:

Senegal is a “third-world” country and the majority of the populace live in poverty.
The low revenue for the Senegalese cellcos could be as a result of poor patronage due to the fact that the people might be battling with finding their daily bread and not necessarily have the money for the “luxury” called mobile telephony.
It could be due to other reasons, but this is what readily comes to my mind.

On The MTN/Investcom deal, this is the deal of the year, for me. Just when I was imagining what the Ghanaian terrain would look like if Investcom (Areeba brand) acquired MIC (Tigo brand), the big news came out: The MTN Group had acquired Investcom!

(Investcom was initially in talks to acquire MIC in a USD 5 million deal)

Though it was totally unanticipated, the prospect of MTN in Ghana, was very exciting for me. At this point though, I am not sure which brand would be floated for the new company though I strongly feel that the MTN brand would be retained.

This is an excellent deal and well-thought. What’s even more exciting is the fact that there is no overlap in the terrain of both cellcos. The experience of Investcom in the Middle-East and Asia would be of tremendous help to MTN who have been trying to enter the Middle east market for some time now.

If MIC is not acquired by a bigger company, then they should get ready for a much more stronger competition from the combined force of MTN/Investcom. MTN is an experienced player and have been making huge profit in Nigeria which other cellcos shyed away from in 2001 during the GSM licence auction.

As for the Ghanaian media, the least said, the better. I listened to Paul Adum-Ocheyere on Citi FM’s Eye-Witness News recently and he was beside himself with excitement over the prospect of MTN buying Areeba Ghana for $5.5 billion. He was so excited and was interviewing a business expert on the possiblity of $5.5 billion being pumped into the Ghanaian economy due to the deal. This is clearly wrong information. How Areeba Ghana could have been worth $5.5 billion beats my imagination. It took a text message from Alhaji Bature Iddirisu for him to correct himself on air that the MTN Group was acquiring the parent company of Scancom Ghana Ltd for that amount, and not purchasing just the Ghanaian subsidiary.
He might not have been at fault, he might just have been presenting the news but if I was to read that news, I would cross-check.

I did not follow other Ghanaian news media on this issue as I have been very busy in recent times.

It is understandable if you said the Nigerian media appears more on the spot. They are used to MTN. The cellco has had a subsiadry in the west African nation since 2001. Consequently, the Nigerian media would have a hold on the dynamics of MTN unlike their Ghanaian counterparts who have only monitored MTN from a distance since MTN has not been in Ghana.