Orange Uganda has come out to refute media reports of the telecom company’s plans to quit the Ugandan market stating that it is only searching for a financial partner to boost its operations and to make the necessary investments to ensure its continued development.
The official announcement made on Friday, follows revelations by Tmtfinance, a reputable media outlet that advises on mergers, acquisition, restructuring, capital structure and strategy which reported on Thursday that Orange has mandated Lazard, the world’s leading financial advisory and asset management firm to find a buyer for its mobile telecoms business in Uganda.
“Orange is thought to be planning an exit from several markets in Africa where it does not already hold a number one or two spot. Aside from Uganda, which is thought to be the only geography where an official process is underway, this could also include Orange’s mobile businesses in Kenya, Democratic Republic of Congo and Niger, among others,” this is as reported by Tmtfinance.
In an official statement seen by Red Pepper released by Orange Group, the regulatory body of Orange worldwide the entity stated that is seeking to revise its ownership structure of Orange Uganda in 2014 and this would be through finding a financial partner but there hasn’t been any agreement reached with any telecom company yet.
“Following a capital increase that took place over the course of 2013, the Orange Group currently holds over 95 percent of the company. In order to enable Orange Uganda to continue to finance its operations and to make the necessary investments to ensure its continued development, Orange has engaged a process with a view to finding a new partner” this is according to the statement from the group.
In a highly-competitive market, further reads the statement, Orange Uganda is recognized by its customers for the performance of its network, the quality of its mobile data services and its innovative offers.
At a time when a consolidation phase has already begun in Uganda and the first benefits can already be felt across the market, Orange Uganda has all the necessary attributes to succeed.
The statement further calls for calm among the customers of Orange noting that the new developments will not antagonize the quality of services they have been enjoying before.
“To ensure our success at this crucial moment, the full commitment and mobilisation of all employees is necessary. Our customers must continue to benefit from the high-quality service that they expect and we must maintain our efforts to bring innovative new offers to the market.”
The telecom proprietors explained that the move is aimed at attracting potential partners to boost its assets as well as attract potential partners.
“This is particularly important as it will underline the intrinsic value of Orange Uganda, its performance and its assets in the eyes of potential partners. The process involved in seeking out and setting-up a new partnership will take place in the coming months during 2014” reads the other part of the statement.
According to media reports, it was believed that MTN Uganda will take Orange to consolidate its stronghold on the Ugandan market.
However, economic experts argue that the move by Telecom companies merging is likely to work to the disadvantage of the consumers where likely chain of two monopolies will be created on the market.
The experts further argue that the move by Orange to seek for a financial partner to strengthen their financial muscles was created by Orange’s concentration on data package which accounts for less on Ugandan market as compared to voice services which account for the highest market in Uganda’s telecom sector.
Responding to media reports of a possible merger between MTN and Orange, Mroue noted that despite the fact that MTN encourages consolidation and mergers as key drivers in sustainability, there hasn’t been any official communication about the media reports.
He said, “We don’t have any official communication let alone being aware of any given specific transaction as regards to such reports. It is true that some of the smaller Telecom operators are suffering due to high costs of operation and merging would be the right solution for business sustainability.”
By Prisca Wanyenya