Africell off to a Sturdy Begin in Angola

The pan-African telecom group Africell has damaged Angola’s long-standing cellular market duopoly with its launch on April 7.

If preliminary studies are right, Africell has hit the bottom working, attracting round two million subscriptions in its first month of operation.

Two-horse Race

Angola’s cellular sector is at present dominated by Unitel, which is backed by state-owned oil firm Sonangol. On the finish of 2021, Unitel claimed round 90% of all subscriptions.

Previous to the arrival of Africell, Unitel’s solely competitors got here from Movicel, whose principal shareholders embody GAFP Investimentos e Participacoes and Angola’s nationwide social safety physique, INSS.

Though Movicel managed to take greater than 25% of the market by end-2016, its share fell again to round 10% 5 years later.

State-owned fastened line incumbent Angola Telecom (AT) holds a Unified World license overlaying all cellular/fastened voice/knowledge/TV providers. Nonetheless, it has not but made good on its plans to enter the mobile sector.

A tie-up with Egyptian-backed agency Angorascom in November 2019 was meant to offer AT a route into the market, however the partnership was deserted seven months later.

Individually, AT is a minority investor in Movicel, with an 18% curiosity.

Stuttering Development

Angola Cell Subscriptions, 2011–2021

General, cellular penetration is low by regional requirements, standing at round 47% on the finish of 2021, in comparison with an African common nearer to 88%.

There have been 14.91 million cellular subscriptions as of end-2021, up from 14.65 million twelve months earlier.

Africell’s Arrival

In July 2019, the Lebanese/U.S.-backed group Africell highlighted that it had entry to $300 million in funding to enter the Angolan market.

The UK-headquartered group was already current in Gambia, Sierra Leone, and the Democratic Republic of Congo. Africell additionally had a cellular community in Uganda, however ceased operations in late 2021.

At first of March the next 12 months, Africell was revealed as the only remaining bidder for Angola’s fourth unified communications license. The group was invited by the federal government to submit a proper monetary and technical proposal.

On July 6, 2020, the Ministry of Telecommunications, Info Expertise and Social Communication (Ministerio das Telecomunicacoes, Tecnologias de Informacao e Comunicacao Social) confirmed Africell’s choice. Nonetheless, negotiations on license situations dragged on till February 3, 2021, when closing contracts have been signed.

Delayed Launch

Africell initially set a mid-2021 goal for its entry into the cellular market, however delays bumped its industrial launch window again to December 2021, then April 2022.

One motive for the postponement was Africell’s failure to barter an interconnect contract with Unitel.

Africell launched its industrial cellular providers within the capital, Luanda, on April 7, 2022. Its preliminary service vary included free on-net calls and cellular knowledge bundles, which it claimed have been priced “as much as 50% cheaper” than rivals. Unitel and Movicel responded by introducing their very own tariff promotions.

The newcomer’s community has been rolled out throughout Luanda, forward of deliberate growth to different areas—together with at the very least 60% of city zones—inside eight years. Tools is being offered by Nokia.

U.S. Backing

With the U.S. Worldwide Growth Finance Company amongst its buyers, Africell claims to be the one U.S.-backed cellular telecommunications operator in Africa.

In Might 2022, on the finish of a multi-country African tour, U.S. Deputy Secretary of State Wendy Sherman stated in an on-line briefing: “It is a firm that has been in enterprise … for one month and has 2 million subscribers. They will convey functionality to all people in Angola.”

If these figures are right, this might imply that Africell has already jumped above Movicel into second place within the cellular market.

If these figures are right, this might imply that Africell has already jumped above Movicel into second place within the cellular market.

It appears to be like just like the sector is ready for a giant shake-up—with Angolan customers benefitting from the elevated competitors and ongoing value battle.