Multi-million US dollar telecoms deal stalls

Telecom Namibia, which had expected to start operating in October this year, said that the project has been postponed to the first quarter of 2007 but could not give an exact date as to when operations would start.

Mundo Startel is Angola’s fixed line telecommunication utility in which Telecom Namibia holds a controlling interest.

Oiva Angula, Telecom Namibia’s manager for corporate communications and public relations said slow progress by the civil contractors and technical hitches in importation of material for the building of network equipment had seriously delayed the project.

Angula said that Telecom Namibia has invested US$4.3 million in return for equity and an additional loan of US$12.24 million to Mundo Startel.

Namibia’s telecommunications utility owns a controlling 44 percent stake in Mundo Startel, whilst the rest of the shareholding is split amongst some of the major shareholders, Mundo Telecommunications, Commercial Bank of Angola (Banco) and Jemba Technical Assistance of Angola.

“The project has been seriously delayed due to slow progress of the civil contractor and import of material for the building of the network equipment facility. Operations will only commence in the first quarter of 2007,” Angula said.

Telecom Namibia is expected to provide residential and corporate fixed line services, public telephones and direct internet access

As part of the agreement, Telecom Namibia will provide the technical expertise as well as management to run the company. Angula said the deal is going to run for the next 15 years.

“The Angolan firm has access to the intellectual capital of Telecom Namibia. This means that Mundo Startel can draw on the expertise in all fields from technical, marketing, finance and human resources,” Angula said.

The telecoms firms are expected to roll out fixed telephone line services first in the Angolan capital Luanda and Benguela and then spread to Huambo, Namibe, Huila, Kwanza Sul and Cabinda.

Telecoms Namibia said that due to Angola’s challenging geography, the new firm is going to deploy new generation all-IP based network, VSAT and wireless digital technology instead of digging holes and erecting telephone poles.

The technology is being supplied by Chinese firm ZTE Corporation International, Angula said.

Angola is emerging from three decades of a brutal and devastating civil war, which ended with the battlefield death of opposition UNITA leader Jonas Savimbi in 2002.

Billions of dollars are being poured into reconstructing the country’s infrastructure, which was destroyed during the war.

Bureaucratic delays on the Angolan side have however frustrated investors and in most cases raised the risk element in most foreign investors interested in Sub-Saharan Africa’s second largest oil producer.

Angula brushed aside fears that Telecom Namibia could burn its fingers in Angola.

“The cost is shared amongst the sharehoders of the Angola venture, which includes Telecom Namibia.

“Tens of foreign investments are made on an annual basis in Angola. Namibia as a neighbouring country, who has good relations cannot lose out on the business opportunity to contribute to rehabilitate Angola,” Angula said.

On the domestic market, Telecom said that it is in the process of deploying CDMA (code division multiple access) and ADLS (asymetric digital line subscriber) and WiMAX technologies for broadband access.

The telecoms firm, which is wholly owned by the Namibian government, said that these deployments will result in state of the art network catering for fixed and mobile high speed data, voice and data, world class value added services, content provisioning, web services, managed services and new generation communication devices ranging from PC and portable devices.

November 2006
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