Celtel Reports 16.9 mil. African GSM Subscribers

Kuwait's Mobile Telecommunications Company (MTC) has announced that its revenues had doubled from US$2.00 billion in 2005 to US$4.18 billion for 2006, and that the group also had record net profits of 305.3 million dinars (US$1.056 billion) in 2006, a 67.9% year-on-year rise, according to its year-end annual financial statements (see Kuwait: 19 February 2007: MTC Kuwait Posts Record 2006 Profits). The majority of growth was stimulated by the increase in the overall customer base from emerging markets, which increased from 14 million subscribers at the end of 2005 in 19 countries, to 27 million at the end of 2006 in 20 countries.

MTC’s subscriber growth has primarily been driven by its African operations through the acquisition of Celtel in 2005. Celtel’s African subscriber base has grown by 8.063 million net new additions since December 2005, driven by the 2006 acquisition of V-Mobile in Nigeria, which recorded 6.396 million subscribers as of 31 December 2006. The fastest-growing markets were in Zambia, which saw an 89% growth to 1.325 million subscribers; Congo-Brazzaville, which saw an 81% growth to 683,000 subscribers; and Malawi, which saw a 79% growth to 357,000 subscribers. The success of MTC’s expansion strategy is continuing to deliver strong financial results, and the operator is now looking at further growth opportunities through acquisitions or the winning of new licences in Saudi Arabia and elsewhere in Africa.

Outlook and Implications

During January, the MTC/Celtel group outlined a new growth strategy for the five-year period ending 2011 through which MTC would become one of the top 10 operators in the world by market capitalisation. Called ACE (Acceleration, Consolidation, Expansion), this strategy has set the target of achieving market capitalisation of US$30 billion, exceeding 70 million customers, and attaining EBITDA (earnings before interest, tax, depreciation, and amortisation) of US$6 billion by 2011. "Integrating all of our operations will yield more benefits and better results in the future," said the MTC deputy chairman, Dr. Saad al-Barrak. "The transformation of MTC into a global company will come as a result of disciplined execution of vision and the achievement of ambitious objectives. To this end, at the beginning of 2007, MTC launched ACE—an implementation strategy to realise the target of the 3x3x3 vision. ACE seeks to extract superior value from existing assets through three main thrusts: accelerating the growth in Africa, consolidating the existing assets, and expanding into adjacent markets."

Celtel is the third-largest mobile operator in Sub-Saharan Africa in terms of subscribers after MTN and Vodacom. Discounting South Africa, where Celtel does not compete, it is the second-largest operator by a very slim margin. MTN reported 20.3 million African subscribers (excluding South Africa) by 30 September 2006, whereas Celtel had 19.634 (if Sudan were included) by 31 December 2006.