Hits Telecom enters joint venture with French firm
HITS Telecom has entered into a joint venture with France Telecom to provide the Orange mobile phone brand in the country, media reports have revealed.
By Ibrahim Kasita
HITS Telecom has entered into a joint venture with France Telecom to provide the Orange mobile phone brand in the country, media reports have revealed.
The new company will be called Orange Uganda Limited. Last year, Hits Telecom, which is owned by Middle East investors, acquired a telecom licence.
Yesterday, The Financial Times reported that France Telecom will own 53% of the venture and provide roughly half the $200m (sh360b) investment planned over the next three years to roll out Hits’ network countrywide. The Orange brand will also be marketed from next year.
Anne Bouverot, the head of international development at Orange, said Uganda presented a good opportunity for France Telecom since mobile penetration is low at 17%.
A large population and growing economy made Uganda a market with “a high potential for growth,†Bouverot said.
However, France Telecom will face strong competition from African groups MTN and Zain, uganda telecom and Abu Dhabi-based WARID telecom.
The Uganda investment is the first concrete evidence of France Telecom’s revived African ambitions.
Didier Lombard, the chief executive, told the Financial Times last month that France Telecom was turning its attention back to Africa after the French group’s abortive $41b (sh73,800b) bid for TeliaSonera, the Nordic operator.
Lombard is hoping that Africa could be to his firm what Latin America has been to Telefónica of Spain: fast-growing emerging markets with potential to outstrip revenues from its home market.
France Telecom has operations in 16 African countries, mainly in French-speaking west Africa. Last year, it made its first major foray into English-speaking Africa – considered to have larger potential markets and more wealth – with the 400m euros purchase of a 51% stake in Telkom Kenya.
France Telecom has struggled to secure sizable acquisitions and is facing increasingly fierce competition from other foreign telecom groups like Vodacom of South Africa and Vodafone of the UK.
France Telecom recently lost out to Vodafone in the privatisation of Ghana’s incumbent operator.
The Uganda deal shows that the French group is having to settle for smaller operations, often starting from scratch. Although Hits has a fledgling network, largely based in the capital Kampala, it has not yet marketed services.
Hits was set up in 2007, with equity financing of $200m from investors led by International Investment House, an Abu Dhabi-based private equity firm targeting infrastructure projects.
HITS Telecom has entered into a joint venture with France Telecom to provide the Orange mobile phone brand in the country, media reports have revealed.
The new company will be called Orange Uganda Limited. Last year, Hits Telecom, which is owned by Middle East investors, acquired a telecom licence.
Yesterday, The Financial Times reported that France Telecom will own 53% of the venture and provide roughly half the $200m (sh360b) investment planned over the next three years to roll out Hits’ network countrywide. The Orange brand will also be marketed from next year.
Anne Bouverot, the head of international development at Orange, said Uganda presented a good opportunity for France Telecom since mobile penetration is low at 17%.
A large population and growing economy made Uganda a market with “a high potential for growth,†Bouverot said.
However, France Telecom will face strong competition from African groups MTN and Zain, uganda telecom and Abu Dhabi-based WARID telecom.
The Uganda investment is the first concrete evidence of France Telecom’s revived African ambitions.
Didier Lombard, the chief executive, told the Financial Times last month that France Telecom was turning its attention back to Africa after the French group’s abortive $41b (sh73,800b) bid for TeliaSonera, the Nordic operator.
Lombard is hoping that Africa could be to his firm what Latin America has been to Telefónica of Spain: fast-growing emerging markets with potential to outstrip revenues from its home market.
France Telecom has operations in 16 African countries, mainly in French-speaking west Africa. Last year, it made its first major foray into English-speaking Africa – considered to have larger potential markets and more wealth – with the 400m euros purchase of a 51% stake in Telkom Kenya.
France Telecom has struggled to secure sizable acquisitions and is facing increasingly fierce competition from other foreign telecom groups like Vodacom of South Africa and Vodafone of the UK.
France Telecom recently lost out to Vodafone in the privatisation of Ghana’s incumbent operator.
The Uganda deal shows that the French group is having to settle for smaller operations, often starting from scratch. Although Hits has a fledgling network, largely based in the capital Kampala, it has not yet marketed services.
Hits was set up in 2007, with equity financing of $200m from investors led by International Investment House, an Abu Dhabi-based private equity firm targeting infrastructure projects.