Reports that France Telecom-Orange could be expanding into the Democratic Republic of Congo via a takeover of Congo Chine Telecom have proven to be true. The international operator has stated that the acquisition “reflects France Telecom-Orange’s international strategy, which aims to stimulate growth by entering high potential emerging markets.”
Currently 51% of the Congolese operator’s assets are owned by ZTE, with the remaining 49% owned by the country’s government. The former will be the first stake that France Telecom-Orange acquires - paying US$10 million to the Chinese vendor – followed by a payment of US$7 million for the second.
In addition, CCT is obtaining “improved licence terms” via a US$71 million payment to the government. Among these terms is a ten-year extension to its permit as well as increased access to various spectrum bands – 2MHz of 2G frequencies in the 1800MHz band and 10MHz of 3G spectrum in the 2.1GHz band.
France Telecom-Orange will provide CCT with a capital increase of US$185 million in order to finance its operations; this will be paid by instalments and supplemented by both a restructuring of its external loads as well as funds generated by the operator itself.
Infrastructure and other services will be provided to CCT by ZTE; France Telecom-Orange has referred to the vendor as a preferred supplier. In addition, China Development Bank will provide “strategic financing support”.
A statement from France Telecom-Orange promises that the French firm will “contribute its marketing, commercial and technical expertise as well as the Orange brand, to leverage CCT’s solid network assets”. The operator acknowledges CCT’s “real potential for growth over the next few years”, noting that the DRC – the fourth most populous African country - has a penetration rate of just 17% despite its population of 70 million.
France Telecom-Orange’s CEO and chairman Stephane Richard said: “The acquisition of CCT is an important step in our policy of expansion outside Europe, and contributes to our stated aim of doubling our revenues in Africa and the Middle East by 2015. Orange is already present in over 20 countries in the region and has built up considerable experience developing networks and new services that are specifically tailored to the needs of local markets.”