Telecel set for IPO in 5 years

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Telecel
Telecel

The CEO of Telecel Group, Moh Damush has said that the company plans to go public in the next five years.

Telecel, an Africa-focused telecommunications company, recently got approved to purchase 70% majority shares in Vodafone Ghana, which becomes its biggest purchase on the continent yet.

The all-cash deal was part of Telecel’s expansion strategy ahead of the planned initial public offer (IPO), Chief Executive Officer Moh Damush said in an interview.

“The Ghana deal is important because it’s shifting the group from one size to another,” Damush said.

Initially, the National Communications Authority (NCA) had turned down Telecel’s offer to purchase Vodafone Ghana, claiming the sale deal did not meet regulatory requirement. Ghana government also claimed Telecel has not got the financial and technical muscle to do the to job.

But NCA now says it is satisfied with the additional evidence provided by Telecel to show it is competent and ready to handle a company the size of Vodafone Ghana and to expand access across the country.

Telecel is one of the first telecom operators in Africa acquired by Damush, Hugues Mulliez and Nicolas Bourg in 2017. The firm operates in Central Africa Republic, Liberia and has a service provider and partner in Mali. It also has presence in several other African countries, particular through its start-up accelerator program dubbed Africa Start-up Initiative Program (ASIP).

 

It is still not clear how much Telecel paid to Vodafone Group for the Ghana operations, but the company has earmarked to invest at least US$700 in Africa over the next fives year, prior to its IPO. The funds, which it sourced from a number of banks and investors, will go into more acquisition and the expansion of existing ones.

The company had early indicated that it was ready to spend US$500 million in Ghana alone over the next three years, for network expansion after acquiring Vodafone Ghana.

Damush said Telecel plans to double the number of towers it operates in Ghana, in the next two years in a bid to compete with market leader, MTN. Vodafone’s network consists of about 2,000 towers, compared with MTN’s 5,000.

The group also plans to provide rural areas with connectivity via satellites, according to Damush. New regulations in Ghana to foster competition in the market will also let Telecel offer roaming on the MTN network while its network expansion is being carried out, he said.

Africa is home to the youngest and fastest-growing population in the world, making it an attractive growth market for mobile companies like Telecel. However, operators face an array of regulatory and policy risks in many jurisdictions across the continent, while having to navigate poor markets that often lack adequate energy supplies.

In a recent example of the troubles such companies can face, the biggest operator in Ghana, MTN was hit with a surprise back-tax bill of $773 million that it disputes. The tax was based on a supposed audit done by an entity called Safaritech Ghana Limited, which has very shady public information.

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