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Perspectives on building technology businesses and AcceleratorIndia from Cartezia

African Mobile Players IPO

Monday, June 16, 2008

The telecoms scene in Africa is changing rapidly as evidenced by the recent IPOs on African stock exchanges for shares in major cellular operators. Celtel Zambia sold 20% of its equity on the Lusaka Stock Exchange whilst Safaricom, part owned by Vodafone Kenya, released 25% of its shares on the Nairobi Stock Exchange. After these IPOs the Zain Group’s stake in Celtel Zambia stands at 78.9% and Vodafone now owns 35% of Safaricom.

Both operators are dominant market leaders in their respective countries. According to WiDAR, in Q4 2007, Safaricom had 9.25 million subscribers, corresponding to 81% of the Kenyan market, whilst Celtel Kenya had just 2.1 million subscribers or 18% of the market. In Zambia, however, it is Celtel that dominates with 1.97 million subscribers, representing a 74% market share. Its nearest competitor is MTN Zambia with 262,000 subscribers for the same period, just 10% of the market.

With Kenya’s penetration rate at just 30% and Zambia’s at 22% there is still considerable opportunities for expansion. In Lusaka, Celtel is only the 19th company to be listed on its stock exchange, a further indication of the extent to which the wireless industry is becoming a driving force in African economies.