Zain Sudan spends $60m on splitting op
Dubai, November 29, 2011
Zain Sudan has spent $60 million splitting its operations in two following the succession of South Sudan, but has yet to agree a license fee with the newly independent country, the telecoms operator said.
South Sudan seceded from the north in July, the culmination of a 2005 peace deal that ended decades of civil war. The fledgling country now has its own international dialing code, 211, which spurred Zain Sudan, a unit of Kuwait's Zain , to split its operations.
'Our network is completely separated and we are running both the old numbers and the new numbers so that we don't deprive our customers of being disconnected until they make a full switch,' Elfatih Erwa, Zain Sudan chief executive, told Reuters. 'There were very big technical challenges.'
Zain Sudan will spend $280 million improving its infrastructure in the north in 2012, while the operator's capital expenditure in the south is likely to be between $60 million and $80 million.
Zain Sudan has 12.7 million mobile subscribers, up from 10.7 million at the end of March. The firm has continued operations in South Sudan despite no agreement over a licence fee.
'The government of South Sudan has not engaged on the licence fee yet,' said Erwa. 'The government said for us not to worry. They will start discussions once they set and enhance the laws and get more experience as a regulator.'
Relations between the South and Arab north have soured, with Khartoum on Monday halting oil exports from the landlocked South until the two agree a transit fee.
Erwa said political tensions 'are a risk for our operations only from the cost side -- our relationship with both governments is very clear.'
'The only direct effect is on our logistics - any tension raises fuel prices and cost of goods in the south. It has an economic effect on both our operations,' he said.
Zain's 590,000 mobile subscribers in South Sudan provide 5 percent of the company's customers and 7 percent of revenue, Erwa said, forecasting Zain's revenue in the South would increase by about 10 percent in 2012, while its mobile subscriber base would grow by 20 percent over the same period.
Zain has a 52 percent market share in South Sudan, Erwa said, competing against Vivacell, MTN, Sudatel and Gemtel. Only about one in eight people in the country own a mobile phone, one of the lowest penetration rates in the world.
Erwa predicts this will reach about 28 percent within the next two years, but the country's low economic growth and a lack of education is hindering mobile adoption.
'If I had to go and bid for a new licence in South Sudan as a new entrant I wouldn't - the main thing that lets me put heavy investment in the South is because I was already there, I have the largest customer base and don't have to launch a start-up operation,' said Erwa.
The company offers 3G services in the three South Sudan cities of Juba, Wau and Malakal through microwave and satellite links. 'We were supposed to build our fibre network in the South, but the project has been delayed by the government due to the regulator not being ready and also some security issues in certain areas,' said Erwa. 'We have signed the contracts and were supposed to start work in July, but are still waiting.'
In the north, Zain has a 58 percent mobile market share and competes with Sudatel and South Africa's MTN. - Reuters
More IT & Telecommunications Stories
- Du joins new global cable consortium
- Kuwait moves to create telecoms watchdog
- Batelco backs Royal Fund for Martyrs
- Egypt's Global Telecom posts $749m Q4 loss
- Red Hat launches open source BPM suite
- Batelco announces new board
- Batelco offers improved broadband
- You don't own phone numbers, warns TRA
- Tech giants back top Qatar ICT event
- Du to provide wifi access in public areas
- Zain finalises $800m, five-year loan facility
- Ooredoo Q4 net profit falls 36pc to $140m
- Mobily, Etisalat team up for LTE roaming
- Batelco approves $84m dividends for 2013
- Etisalat Q4 profit rises 70pc to $394m
- Kenya telecom firm to join Etisalat SmartHub
- Aruba appoints new sales director
- Du enters $1.17 billion financing deals
- VIVA extends 4G LTE offer
- Batelco to update students with latest technologies
- Etisalat SmartHub seals IPX agreement
- Etisalat picks Alcatel for LTE network expansion
- Boeing, QCRI host machine learning forum
- Mobily provides 4G LTE international roaming
- Viva Kuwait, Huawei to set up innovation centre
- Etisalat, Airtel deal to boost network services
- Batelco offers 4G LTE backup solution
- Arbor unveils ‘Peakflow’ solution
- Etisalat launches enterprise mobility services
- STC launches advanced 4G network