Russia’s Vimpelcom selling its Telecel Zimbabwe stake
- Published on 29 October 2012
Russian telecommunications group, VimpelCom, plans to sell its stake in Zimbabwean mobile operator Telecel as part of an exit plan from some African markets.
Last year, it was widely reported that Orascom had entered into talks with Zimbabwe’s government regarding the reduction of its 60% share in Telecel. Under Zimbabwe’s law of foreign ownership of businesses, Orascom was asked to reduce its stake to a non-controlling 49%.
But according to the Financial Times, VimpelCom has spoken to potential buyers for its share of Telecel in that country, after resolving what the newspaper has described as “outstanding ownership and licensing issues.”
VimpelCom’s move to pull out of Zimbabwe forms part of its plan to rationalise its global telecoms operations and focus on core growth areas, says the Financial Times report.
The company also reportedly plans to intensify its targeting of more mature markets such as Russia and Italy, which make up about 70% of the group’s business.
Apart from Zimbabwe, Burundi and the Central African Republic are also markets that Vimpelcom wants to exit. Dobek Pater, director at Africa Analysis, has said it makes sense for the Russian company to exit Burundi, as that country has a highly competitive market with six mobile network providers.
However, regarding the Russian firm’s exit-plan for Zimbabwe, information and communications technology analyst Robert Ndlovu has told ITWeb Africa that politics could have prompted VimpelCom to leave the African nation.
“If they want to exit, it’s probably because of the political risk: the uncertainty of the forthcoming general political elections.
“No one knows how the political equation is going to work out,” said Ndlovu.
Ndlovu added that the strength of Econet Wireless in Zimbabwe may have also frustrated VimpelCom.
“Econet is very powerful, dominant and non competitive,” he said.
“Econet controls 80% of the telecoms industry in Zimbabwe,” Ndlovu explained.
Vimpelcom could keep operating in its emerging market businesses such as in Algeria, where the firm is in negotiations with the government over the future ownership structure of its Djezzy business.
In a Wireless Intelligence study, VimpelCom has also been rated as the world’s seventh largest mobile operator, with 205.05 million connections.