Angola Turns to Space to Spearhead Wireless Development

Angola is investing in improved phone and wireless networks on land, sea and in space to attract foreign investment and diversify away from oil, National Director of Telecommunications Eduardo Sebastiao said.

The southwest African nation’s biggest projects include a $300 million Russia-built satellite scheduled for 2017 and a $200 million sub-sea cable across the Atlantic Ocean to Brazil that will start to be laid next year, Sebastiao said in an Oct. 28 interview in Luanda, the capital. Angola also wants to add fiber optic cable to increase mobile-phone coverage to 85 percent of the population from 60 percent within two years, Sebastiao said.

“We encourage international companies to join with local companies and we’re ready for investors to set up operations now,” the Director of Telecommunications said. “This will create not only financial wealth but social wellbeing through increased jobs and by fighting poverty.”

Angola, recovering from a 27-year civil war that ended in 2002, is rebuilding infrastructure to diversify away from the crude oil that accounts for 97 percent of exports and 75 percent of government tax revenue. The government wants to promote opportunities in mining, industry and agriculture while improving the efficiency and competitiveness of its telecommunications industry.

Foreign investment this year in Angolan industries excluding oil was $1.9 billion by the end of September, compared with $2.3 billion for all of last year, Maria Luisa Abrantes, chairwoman of the National Private Investment Agency, said in an interview on Oct. 1.

Expand Networks

Four landline operators, including state-owned Angola Telecom and MS Telecom, a subsidiary of state oil company Sonangol EP, will be allowed to compete with mobile operators Movicel Telecommunications SA and Unitel SA in both landlines and mobiles as part of the investment plan, Sebastiao said.

“It’s still being analyzed to see if companies will pay a fee for the frequency spectrum or for a universal license,” he said. “We still need to work on the legislation so it’s too early to say when it will be implemented.”

Movicel was spun off from Angola Telecom in 2010 with a 40 percent share going to closely held Portmill Investmentos e Telecomunicacoes, which is run by army generals. Unitel is partly owned by Portugal Telecom and Isabel dos Santos, daughter of Angolan President Jose Eduardo dos Santos. Portugal Telecom anticipates revenue of $280 million from its stake in Unitel this year, while Angola’s Central Bank has approved the delivery of about $94 million to date, the company said on an Aug. 14 conference call.

Satellite Project

Angola’s fixed-line and mobile operators are part of a consortium called Angola Cable that will operate the 6,000-kilometer (3,730-mile) sub-sea cable to Fortaleza, Brazil, and talks are under way to arrange financing, Sebastiao said. Brazil was Angola’s fourth-largest trading partner last year, behind Portugal, China and the U.S., according trading economics.com.

Russia’s state-controlled VTB Bank has arranged financing for Angola’s first satellite while Russian technicians are training Angolans to operate the craft, Sebastiao said. The satellite will help Angola provide better connections in areas of high-volume data transmission, such as when oil companies are prospecting and drilling, he said.

“The satellite will also give national operators independence from one another and they will have cheaper service, which will lead to lower costs for consumers,” the director said. “The government is subsidizing, but in the long term there will be recovery.”

Moscow backed Angola’s struggle for independence from colonial ruler Portugal in 1975 by supporting the Popular Movement for the Liberation of Angola, the political party that has governed since then.

Angola’s telecommunications sector has also collaborated with companies from China, Sweden, Japan and Portugal, and is seeking to connect networks with neighboring Namibia, Zambia and the Democratic Republic of Congo, Sebastiao said.

To contact the reporter on this story: Colin McClelland in Luanda at cmcclelland1@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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