France Telecom acquires Congolese operator CCT

France Telecom-Orange has announced that it will acquire Congo Chine Télécom (CCT), a mobile operator in the Democratic Republic of the Congo.

The firm has struck a deal to buy shares in the African operator from ZTE, the Chinese handset manufacturer, and from the government of the Democratic Republic of the Congo.

It will pay $10m for ZTE’s 51 per cent share of CCT’s equity, and $7m for the government’s 49 per cent share.

The company said that it will bring its marketing, commercial and technical expertise to the operator, as well as the Orange brand to leverage CCT’s solid network assets.

As part of the deal, ZTE will provide network equipment and services to CCT as its preferred supplier, and CCT will pay $71m to the Congolese government for improved licence terms, including a ten-year extension to its licences, access to an additional 2MHz in the 1800MHz range for 2G, and access to 10MHz in the 2,100MHz range for 3G.

CCT’s operations will be financed from internally generated funds, restructured external loans and a total of $185m capital provided by France Telecom, in instalments.

France Telecom explained that the acquisition reflects its international strategy, which aims to stimulate growth by entering high potential emerging markets, with a particular focus on Africa. With over 70 million inhabitants, the Democratic Republic of the Congo is the fourth most populated African country but has a mobile penetration rate of only 17 per cent, considerably less than many neighbouring countries. The development of CCT, which holds a national mobile licence and has significant market share in certain regions of the country, offers real potential for growth over the next few years, the company said.

“The acquisition of CCT is an important step in our policy of expansion outside Europe, and contributes to our stated aim of doubling our revenues in Africa and the Middle East by 2015,” explained Stephane Richard, France Telecom-Orange’s chairman and CEO.