Belgacom, MTN merge carrier services operations

Belgacom’s International Carrier Services (ICS) division has extended its long standing partnership with pan-African carrier MTN, with the combination of the two firms ICS units and MTN’s acquisition of a stake in Belgacom ICS.

From December 1, Belgacom (BICS) will begin integrating MTN’s international wholesale subsidiary and will act as the official contact for MTN’s carrier services globally. Belgacom will own 57.6 per cent of BICS’ shares, Swisscom will own 22.4 per cent and MTN 20 per cent.

The move will give the new entity an even stronger foothold in the African market, where local telecoms operators have faced several challenges in 2009. The global economic downturn, a fiercely competitive landscape, and pressure to expand networks into rural areas have tested the mettle of the region’s carriers both big and small.

Read the Africa Com 2009 special focus

And yet, forecasts from Informa Telecoms & Media show that mobile subscription growth in the region is still set to increase by 26.6 per cent year on year in 2009, with the total number of active subscriptions to exceed 473 million by the end of the year.

This figure is projected to increase to approximately 800 million by 2014, by which time SIM penetration across the region should reach 70 per cent, the analyst predicts.

“African operators have always recognised the need for innovation in meeting the demands of a low-income population, but the need to stand out from the crowd and differentiate from one’s competitors is taking this requirement to a new level,” said Nick Jotischky, Informa’s principal analyst covering the Middle East & Africa.

A sign of the harsh operating environment facing African telecoms firms is the need for operators to manage their costs and maintain margins. Informa’s Jotischky notes that offsetting the ongoing fall in voice revenues is becoming central to operator strategies across the world. Not only are data services important as an income generator, but they are also useful as a customer retention tool. Investing in infrastructure to provide reliable data services to corporate and consumers will also be a focus of discussions.

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