Angola is set to privatize its struggling state-owned telecommunications provider Angola Telecom in an effort to open up the industry to private investors.
The Angolan government plans to sell a 45-percent stake worth $500 million to a new shareholder to recapitalize the firm, according to BroadcastMediaAfrica.
International auditing firm Ernst & Young is skeptical about the government’s plan. Angola Telecom’s liabilities exceed its assets by $206.8 million, Telecompaper reports.
Angola Telecom has been in technical bankruptcy for at least two years, raising questions about its ability to operate successfully going forward.
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Angola is on a mission to privatize a number of its state-owned companies to attract foreign investment. Angola has traditionally been an attractive destination for foreign investment because of its oil and gas sector.
However, oil and gas investment has been off in the last two years.
Foreign direct investment to Angola in 2018 was negative (-$5.7 billion) for the second year running due to profit repatriations by foreign companies and the decline in the country’s oil production, according to NewAfrican.
The following Angolan government-owned entities have been earmarked for privatization: Cable TV Angola, Angola Cables, National Post and Telegraph Company of Angola, Angola and Communications Systems, and Company telephone Directories of Angola.
Angola Telecom has a major shareholding in Infrasat and Angola Cables, giving it access to satellite and fiber-optic connectivity.
Angolan President João Lourenço began the privatization process by appointing a new board for Angola Telecom in October, Angop reported.
At the moment, Angola Telecom competes with telecoms firms Unitel, Movicel, and MSTelcom.
Unitel, the biggest mobile operator in Angola, is a private Luanda-based firm owned by Brazilian telecoms firm Oi, Angolan state-owned oil company Sonangol Group, investment firm Geni Holding, and internet provider Vidatel, which is owned by Africa’s richest woman, Isabel dos Santos.
Mobile operator Movicel was established in 2003 as an Angola Telecom subsidiary. In 2010, 80 percent of Movicel was sold to a selection of private companies, with Angola Telecom and the National Post and Telegraph Company of Angola retaining 20 percent.
Luanda-based MSTelcom is a subsidiary of Sonangol Group, Angola’s state petroleum company. MSTelcom provides telecommunications services for the oil industry alongside residential and corporate clients.
