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New company buys Orange telecom

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Orange telecom headquarters in Kampala. Africell has acquired stakes in the company. PHOTO BY Steven Wandera 

By ISMAIL MUSA LADU

Posted  Tuesday, May 20  2014 at  18:59

In Summary

Growth. Analysts say the purchase of stakes in Orange telecom by Africell is an indication that the telecommunication industry in Uganda is maturing

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Kampala.
Orange Group has signed an agreement with Africell, a telecommunication company with operations in Gambia, Sierra Leone and DR Congo, to acquire stakes in Orange Uganda.

According to a press statement issued by the Orange Uganda media coordinator, Ms Patience Tindyebwa, confirming the deal between the two French companies, not much details regarding the sell was divulged besides stating that Orange signed an agreement with Africell for the sale of its stake in Orange Uganda.

“In the framework of a regular review of its portfolio of assets, the Orange Group announced that it has signed an agreement with Africell Holding for the sale of its majority stake in Orange Uganda,” reads the press statement issued yesterday.

The statement further reads: “The transaction is subject to approval from the relevant authorities. It will enable the company in Uganda to continue its development. This transaction marks a new step in the Orange Group’s asset portfolio optimisation strategy for which Africa and the Middle-East remain a strategic priority.”

This will be the second time in as many years a buyout in the telecom industry is happening after Airtel acquired Warid early last year.
Orange Uganda was established in 2008 in Uganda and by the end of last year it had garnered a subscriber’s base of slightly over 60,000 clients.

Like Africel, Orange (then known as France Telecom) bought majority shares (53 percent) from Hits Telecom Uganda which had failed to beat the regulators timelines to start operation, to create Orange Uganda.
And for that Hits Telecom Uganda provided Orange Uganda limited with its national licence, the transfer of which was approved by the Uganda Communications Commission (UCC)—the industry regulator.

In an interview with an industry analyst, Mr Muhammad Ssempijja, the move for the two telecom companies to do business is an indication that the telecommunication industry in Uganda is maturing.

He said: “This is a good thing. And this is not the last of such deals (sales) that will happen. As the industry mature more of these will happen.”

Other industry analysts were also of the view that such a sale could have been informed by the fact that the industry no longer provides any breakthrough both in terms of sales and subscribers base hence a situation like this—buy out.