Africell’s newest operation in Angola is proving that well-financed mobile competition can still energize African markets. Russell Southwood spoke to Christopher Lundh, CEO, Africell Angola about the progress it’s made in the 5 months since its launch.
Lundh has been pleasantly surprised by Africell Angola hitting the 5 million subscriber mark in just 5 months: “I didn’t expect to see it happen quite so quickly. The reality has exceeded our initial expectations and we now have a better understanding of the dynamics of the market and that it will take a fair bit of investment to realize its potential.”
“We’re still a start-up but we’re growing like crazy and we’ve built everything from scratch. Next month we move into our permanent offices and we’re now firing on all cylinders.”
There are already two active mobile companies – Movicel and Unitel – but the market has not been highly competitive: “Prices have been very high for both calling prices and handset costs.” At present Africell has launched only in the country’s capital Luanda but it will soon start implementing a full-scale geographic roll-out with 2G, 3G and 4G:
The most immediate parts of this roll-out will happen in Benguela and Lobito. In addition, it will roll out 5G but it will be limited to high-end business and residential areas of the city and surrounding areas.
Of its 5 million subscribers, at least half a million are active data subscribers: “Our network is 100% Nokia and it’s over-engineered to ensure minimal latency for our customers. We are not just going for high-end corporates but also competing in mass-market areas. Generally speaking, things work and all our current sites are all connected to the grid.”
The vast majority of this data use is for social media (things like TikTok and Instagram) as 60% of the population is under 20 years of age. There is also e-commerce and ride-hailing services: “There are two reasonably popular services (like Uber) and a number of food delivery services. The latter are pretty popular and we’ve been working with them from the beginning. There’s also a lot of music and video streaming focused on the higher-end youth market.”
“This is the fifth country I’ve lived in on the continent and I’d say that Luanda is a pretty sophisticated city. There’s a lot of money here, although of course, there are fairly wide inequalities of income. Obviously things are very different outside of the major cities.”
Africell has taken the view that it will “put in fibre where we need it and can’t co-locate with others. There’s no need to reinvent the wheel when we can use other fibre operators.” The mobile market leader Unitel has a pretty substantial fibre network and ITA (owned by Namibia’s Paratus) has also completed a significant fibre network in the country. The latter has recently extended its network to the country’s Cabinda enclave and Lundh is looking forward to launching there shortly. In addition, Government-owned MS Telecom and Angola Telecom have also built fibre networks.
Angola’s telecoms law specifies that carriers have to be able to offer co-location but for example, a lot of mobile sites were not built with another client in mind.
Angola’s telecoms market is undergoing a tremendous upheaval because the current President (who has just been re-elected) has been addressing ‘patronage’ issues. Africell’s licence came from the re-running of a licensing process. The majority owner of the initial winner Telstar (which had never run a mobile operation before) was General Manuel Joao Carneiro.
In July last year the Government took back the ownership of Movicel, which had been sold again to the “friends” of the then Government without a bidding process. Since then it has gone through numerous cycles of management, with last CEO leaving only months ago.
Finally, the Government stripped the former President’s daughter Isabel dos Santos of much of her wealth, including her shareholding in the privately-owned Unitel. Both she and General Dino Nasciemiento (her Father’s political ally) each had a 25% share of the company that the Government has now taken possession of.
The Government has announced a privatization for many Government assets, including Sonangol (which owns MS Telecom), of which initially 30% will be sold. In January of this year it announced that it had raised about US$1.6 billion from the privatization programme. It will be interesting to see whether it will sell majority or near majority stakes in Movicel and Unitel to international companies. allAfrica