Movitel to Invest $436 Million in Mozambique Mobile Operation by 2015

Movitel, which was awarded the right to operate Mozambique’s third mobile-phone service this month, plans to invest $436 million between 2011 and 2015 setting up its network, the southeast African nation’s communications regulator said.

The new operator is a venture between Viettel Group, a unit of Vietnam Military Telecommunications Corp., and SPI- Gestao e Investimentos, the investment arm of Mozambique’s ruling party. It will compete against Johannesburg-based Vodacom Group Ltd.’s Mozambican unit and state-owned Mocambique Celular SARL, which operates under the brand Mcel.

Movitel has to start operations within 12 months, Americo Muchanga, director of the regulator, said today in an interview from Maputo, the capital.

Movitel spokesman Raimos Sengo was in a meeting and not immediately available for comment.

The new operator may take 5 percent to 15 percent of the market, which may double in size by 2015, Vodacom Mozambique Chief Executive Officer Jose dos Santos said in a Nov. 11 interview in Cape Town.

“Nobody is going to make their lives easy,” dos Santos said. “We have just got to see what their objective is and what their strategies are.”

Revenue Growth

Mcel, which became Mozambique’s first mobile provider in 1997, has more than 4 million subscribers, according to the Maputo-based company’s Web site.

Vodacom, Africa’s second-biggest mobile-phone service and a unit of Vodafone Group Plc, has been operating in Mozambique since December 2003 and has almost 3 million subscribers in the country.

Revenue from the country’s mobile-phone industry may more than quadruple to $1.8 billion by 2015 as competition and demand from consumers and businesses increase, researcher Frost & Sullivan said in a report in July 2009.

At present “you are talking about 30 percent to 32 percent penetration in terms of the population” who use mobile-phone services, Dos Santos said. The cost of handsets “is the main barrier to entry. It’s not coverage any more, it’s not distribution.”

To contact the reporters on this story: Fred Katerere in Maputo at fkaterere@bloomberg.net Mike Cohen in Cape Town at mcohen21@bloomberg.net.

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net.

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