French Telecom operator Orange is considering an exit from the Ugandan market. The exit is going to to be from several markets in Africa where it does not already hold a number one or two spot.
This means an exit from Orange’s mobile businesses in Kenya, Democratic Republic of Congo and Niger, among others.
In Uganda, the market is dominated by MTN and Bharti Airtel. Airtel acquired the third largest operator Warid Telecom for around US$100m from the Abu Dhabi Group in May 2013.
MTN has around 8.5 million subscribers in Uganda, while post-merger, Airtel has over 7.5 million.
Sources say, the most logical buyer of the Orange Uganda unit could be MTN. The South African operator has previously been vocal about consolidation in the country, and will be keen to firm up its number one position, with second place Airtel gaining valuable ground.
While Airtel is also clearly in acquisition mode across Africa, sources said it was unlikely the Indian telco would make a move for Orange Uganda so soon after its Warid buyout.
Vodacom is thought to have made a bid for Warid Telecom Uganda, before losing out to Bharti Airtel, and although Orange Uganda is substantially smaller, the unit could give Vodacom a footstep in a market where it clearly sees potential.
A decision by Orange to exit the Kenya market could be accelerated following the news that fourth place Essar’s yuMobile will be sold and split between Orange’s rivals, with Safaricom to buy yu’s infrastructure, and Airtel to get its 2.7 million subscribers.
Source: TMT Finance
