Essar is looking to sell its stake in the telecom market in Kenya. It seems that it’s that season when everybody is strategising as Orange has also appointed a transaction advisor, Lazard LTD, to enable it sell its stake in Uganda.
Orange is rumoured to be planning to exit Kenya, DRC, Niger and Uganda as the two markets have proved to be a liability in their books. Orange plans to exist also other markets where it doesn’t hold a number one or two slot.
Orange Uganda is the smallest operator in Uganda behind MTN (8.5 million), Airtel Uganda (7.5 million) and Uganda Telecom mobile unit. Bharti Airtel acquired the third largest operator Warid Telecom for around US$100m from the Abu Dhabi Group in May 2013. The buyouts boosted Airtel Uganda subscriber numbers from 4.5 million to the current 7.5 million.
With MTN’s position as the leading operator not so firm, it might want to acquire Orange Uganda to boost its numbers. Airtel Uganda might also want to take up the lead operator position but its unlikely that MTN will let them gain ground by allowing such a buyout.
Other players like Vodacom might want to retry entry in Uganda after losing to Bharti Airtel in the Warid acquisition. News of sale of Essar Kenya is said to have prompted the hurried move to sell the under-performing Orange units.