Unitel BV joins MTN, Airtel & Zamtel for slice in $500million Zambia telco market...

UNITEL BV announced on March 19, that it was to become Zambia’s 4th Mobile network operator. Unitel is expected to brew additional competition for a slice of the US$500-million annual revenue of the Zambia telecoms market.

The market is currently oligopolistic with only three operators namely Zamtel, MTN and Airtel, thanks to the converged licensing framework which collapsed barriers to entry. The approve converged licensing framework has narrowed to two license types namely service and network. What this means is that any player can offer a wider range of service spectrum. The current revenue leader in the Zambian market is South African registered giant MTN Groups local unit, MTN Zambia.

The Zambia Information and Communications Technology Authority - ZICTA, a Telecoms regulatory arm of the Zambian government announced that it picked UZI Mobile Zambia Limited, a local unit majority owned by Unitel International Holdings BV, as the preferred bidder to set up as the 4th mobile network operator in Zambia.

In a statement made available to the Zambian Business Times - ZBT, Manager for Corporate Communications at ZICTA, Ngabo Nankonde confirmed this development. She affirmed that UZI Zambia Ltd had been issued with a notification of award of network license under the international market segment and national market segment.

Nankonde stated that UZI has pledged to invest about US$350 million to support their operations in Zambia.

The company intends to deploy LTE technology that would support both 4G and 5G technologies. She further stated that the majority shareholder in UZI, Unitel has over 10 years track record in Angola, São Tomé and Principe, Cape Verde and Portugal.

The telco market in Zambia has recently come under heavy competition with Airtel launching a fight back to market leadership, which it lost to MTN alone the years of operation mainly due to the company changing hands relative to the MTN ownership structure which had remained fairly stable.

Efforts to level the playing field were launched when a push to have MTN Zambia follow suite to list on Lusaka Securities Exchange to improve on transparency of reporting and company activities but this has not been attained yet.

The ZICTA announcement of Unitel as the preferred bidder did not state if Unitel would be required to list part of the shareholding to the general public as this ensures transparency and public participation, reducing the opportunity for opaque operations and dealings.

With the increase of Zambia’s population now estimated at over 17- million coupled with better commodity price outlook, especially on Copper and Agro products, the market size is expected to further expand. It is forecasted that the telco market has capacity to grow to a billion dollars in the next decade.