MTN to buy Net One?

HARARE - South Africa’s telecommunications giant MTN is negotiating to buy a 49 percent stake in Zimbabwe's ailing state-owned cellular operator, Net One, for some US$33 million (R200 million).
Net One's managing director, Reward Kangai, confirmed that negotiations to dispose of the stake w

ere under way but would not confirm MTN’s involvement. He said Net One needed a capital injection to increase network capacity and to roll-out a third generation (3G) service.
Sources close to Net One were reported in the South African press as saying a major concern for potential investors was whether they would be able to make a return on their investment, considering the country’s economic and political crisis. Repatriating dividends might also be an issue, while Net One’s poor network service presented challenges.
One analyst said Net One’s future earnings would be constrained by the government, which dictates tariffs, so whatever price was paid would be too much for a network already compromised by serious capital equipment deficiencies.
Net One is the second biggest of Zimbabwe’s three mobile phone operators, with just over 200 000 subscribers. Econet Wireless is the leading operator with over 475 000 subscribers. – Business reporter

Post published in: Economy

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