Celtel to acquire major stake in Ghanaian Operator, Westel for $120M

Celtel International, a subsidiary of Zain (formerly named the MTC Group) today announced the signing of an agreement with Ghanaian Government to acquire 75% of Western Telesystems Ltd (Westel) for USD 120 million.

The Government of Ghana will retain a 25% holding in Westel through the Ghana National Petroleum Corporation. The transaction is subject to standard approvals and authorizations and but it is expected to be concluded quickly.

The acquisition of Westel is important to Celtel as it give the mobile operator a “gateway to West Africa”.

Westel is the second national operator in Ghana and is licensed to provide fixed and mobile (GSM) telecommunications services.

Zain Group, the leading mobile telecommunications network in the Middle East and Africa, hopes to launch enhanced telecom services nationwide in the country in the first half of 2008.

Speaking about the latest acquisition which brings the number of countries where the group operates to 22 countries, Zain’s CEO, Dr. Saad Al Barrak, said: “We are very excited to enter Ghana, one of the most important markets in Africa. We look forward to offering Ghanaians the quality telecommunications services which we provide in all the countries in which we operate. Based on our pan-African experience we are confident that the increased competition in telecommunications will benefit the people of Ghana and support the already robust national economy of the country.”

The Honourable Minister of Communications of Ghana, Dr. Benjamin Aggrey Ntim said: “The Government of Ghana is delighted to welcome a world class telecommunications operator such as Celtel to Ghana, and we look forward to working together as partners. We are also very pleased to announce that the parties have agreed to list a portion of the company’s shares in the future on Ghana’s public stock exchange for the benefit of Ghanaians.”

Lehman Brothers acted as sole financial adviser to Zain’s subsidiary Celtel.

Dr Al-Barrak said Celtel will be investing millions of dollars in a state-of-the art telecommunications network and associated services to offer its unparalleled experience as a pan-African operator, bringing telecoms services to over 24 million customers in 14 countries across the continent (15 with the addition of Ghana).

According to him Celtel prides itself on offering attractive career opportunities in its countries of operation, not only with the company directly, but also via its network of distributors, suppliers and advisors. Westel’s current management and staff, who have worked under challenging circumstances to date, will play an important role in taking the company forward.

The company also looks forward to promoting Ghana as a gateway to West Africa through its One Network, the world’s first borderless network. This offers Celtel’s customers the opportunity to move freely across geographical borders using the same services they would access in their home country, and to make calls without roaming surcharges and without having to pay to receive incoming calls and messages.

The service will also permit customers to buy and top up with local airtime when they visit other countries in which One Network is operational. Celtel’s One Network service is currently operational for 160 million people across six nations in East and Central Africa.

Key benefits of the investment lies in the fact that Ghana is central to the sub-Saharan market and a gateway to West Africa. It is the 5th largest economy (purchasing power parity GDP) in sub Saharan Africa, and has experienced steady growth of approximately 6% in recent years.

Also, Ghana has a fast growing and attractive telecom market and rapid growth in mobile subscribers in the last twelve months has reached an approximately 56%. The low mobile penetration (approximately 28%) offers significant growth prospects.

With a population of over 22 million people, Ghana is the ninth largest country of the 47 sub-Saharan nations, giving Zain’s subsidiary, Celtel, a presence in seven of the nine largest sub-Saharan African countries by population.

The acquisition of Westel cements Zain’s leading position in Africa mobile market through the Celtel brand, which currently has its footprint in 14 countries and has over 24 million customers. With the addition of Ghana, Celtel is now present in 15 African countries, bringing the Zain Group’s total operations to 22 networks (countries)

Celtel now has a footprint in neighbouring ECOWAS or West African countries such as Burkina Faso, Niger, Sierra Leone and Nigeria, Africa’s largest telecom market.

Westel is expected to benefit from both Group and Celtel synergies in branding, human resources, and best practices, and from the innovative Celtel’s “One Network”.

 

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