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Mozambique Investment Forum Finance Opportunities within Mozambique Paris, 3 October 2003 Rui Fernandes, Chairman, mCel.

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Presentation on theme: "Mozambique Investment Forum Finance Opportunities within Mozambique Paris, 3 October 2003 Rui Fernandes, Chairman, mCel."— Presentation transcript:

1 Mozambique Investment Forum Finance Opportunities within Mozambique Paris, 3 October 2003 Rui Fernandes, Chairman, mCel

2 History In 1997, mobile telephony was introduced to Mozambique Government legislation stipulated that this would be part of TDMs basic service offering A joint venture between TDM E.P. and Detecon, GmbH – Telecomunicações Móveis de Moçambique Lda (tmm) was formed Shareholding of tmm – 74% TDM, 26% Detecon

3 History TDM E.P. own the infrastructure tmm manages the service: –does not own assets –makes recommendation to TDM –maintains infrastructure –promotes the service Detecon responsible for Management of the company for the first three years ( )

4 Beginning of 2001 End of Detecon Management Contract New Management introduced Total staff of 169 Over 52,000 subscribers Number of shops: 7 Number of dealers: 72 Roaming with 64 operators Service limited to Maputo and surrounding areas, Xai Xai, Beira, Chimoio and Manica

5 Beginning of 2001 Network Infrastructure Capacity –NSS: 75,000 subscribers –BSS: 60 sites –prepaid platform: 30,000 subscribers –voic 45,000 mailboxes –SMSC: 10 messages per second –billing system: 50,000 subscribers

6 Changes to the Sector Government changed legislation–opening the telecom sector This allowed competition to the telecom sector–starting with mobile Tendering process for a second mobile license was launched License awarded to Vodacom on 28 August 2002 Until now, Vodacom not operational

7 End of 2002 Government decided separation of TDM and tmm As a result tmm changed from a management company to a fully fledged mobile operator All mobile assets and liabilities to be transferred from TDM to tmm as from 1 st January 2003 Interconnect Agreement to be negotiated with TDM based on the same conditions as those to be applied to Vodacom License to be awarded to tmm on the same conditions as those applied to Vodacom

8 Beginning of 2003 Detecon agreed to sell its shares in tmm tmm 100% fully owned by TDM tmm given a new name – Moçambique Celular, Lda abbreviated as mCel Assets and liabilities transferred to mCel Interconnect Agreement negotiated and signed by end of May 2003 License awarded to mCel of the 30 May 2003

9 mCel Today Company experiences incredible growth

10 mCel Today Total staff of just over 410 Subscriber numbers over 370,000 Teledensity over 2% Number of shops: 17 Number of dealers/outlets: over 800 Roaming with over 140 operators Service extended to all provincial capitals Constant expansion of the service

11 mCel Today Constant expansion of the service

12 mCel Today Network Infrastructure Capacity –NSS: 500,000 subscribers –BSS: 160 sites –prepaid platform: 500,000 subscribers –voic 150,000 mailboxes –SMSC: 20 messages per second –billing system: 150,000 subscribers

13 Achievements New image launched–more customer focused Some services offered free –no connection fee for SMS –no fee for call barring –free voic retrieval –no connection fee for Fax & Data Embarked on a subscriber education campaign Introduced lower denomination recharge vouchers Reduced prepaid starter pack from 650,000MT to as little as 199,000MT

14 Achievements Continue growth in revenue –2001 – total gross USD26 million –2002 – total gross USD42 million –2003 – Expected total gross USD60 million Profit – Over USD5 million – Over USD14 million

15 Average Revenue Per User (ARPU) Source Sunday Times Survey

16 Projections

17

18 Project Financing Financing required for two projects: –Phase 7/2002 Project value: USD 15 Million Financing requirement: USD 13 million –Phase 8/2003 Project value: USD 21 million Financing requirement: USD 12 Million 2004 to 2006 –Project value: USD 48 million –New finance requirements

19 Challenges For mCel: –continual demand for mobile services –pressure to continue investing in the capital program to cater for the demand –financing of such growth For the Financiers: –dont always go for the big players – look at some of the smaller operators –take the risk

20 Thank you very much for your attention


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