Expresso remodeled to host MVNOs

Impeccable information reaching Adom Business indicates Expresso Ghana has been remodeled to host MVNOs (Mobile Virtual Network Operators) instead of just running as an MNO (Mobile Network Operator), which has not been profitable for a long time now.

A highly placed source within the telecom industry told Adom Business “very few people know about the remodeling of the company but I can tell you it formed a major part of how the company was pitched for sale.”

Current owners of the company, Sudan Telecoms (Sudatel), reported on their website that Expresso Ghana has been making losses, but the losses reduced in the course of delivering the company to the new buyer.

Sudatel said “selling of Shares in Ghana operation was concluded in Q2 [second quarter] 2014”.

It added, “Sudatel West Africa operation recorded its first positive net income since the startup of the investment, due to high level of efficiency in Mauritania, change of the marketing strategy in Senegal, stabilization effort in Guinea Conakry, and less losses coming from Ghana as we are delivering the operation to the new buyer.”

Adom Business is reliably informed that the process of delivering the company to the new [unnamed] buyer is currently ongoing in an offshore deal between Sudan and Dubai.

The source said the buyer showed interest in the company particularly because it was pitched as a company well placed to host MVNOs in Ghana.

Government has announced that by the close of this year, it would issue licenses for MVNOs. Adom Business can confirm there will be three MVNO licenses.

Ahead of those licenses, industry regulator, National Communication Authority (NCA) started the process to award MVNO licenses about a year ago. During that period, at least one company applied for a license with Expresso Ghana as its MNO partner.

Industry sources say the other five telcos are not very keen on hosting MVNOs. But one other prospective MVNO is looking at using Vodafone as its MNO partner, even though it is still not clear if Vodafone would like to host one. Meanwhile, Glo is also losing customers month on month, and is believed to be another telco that might consider hosting an MVNO.

Between April 2013 and January 2014, Expresso had exclusive sales negotiations with Subah Infosolutions Limited, a member of the Ghana's Jospong Group of Companies. But the deal fell through due to conflict of interest, stemming from the fact that Subah has a government contract to audit telcos in Ghana.

Prior to that, Expresso Ghana MD, El Amir Ahmed El Amir told Adom Business there were other potential buyers of the company, but did not say whether any of those buyers returned to the table for negotiations.

Issues about the sale of the company, however went on the quiet for a while after negotiations with Jospong/Subah fell through, until Sudatel recently published on its website that selling was concluded second quarter 2014 and that the company is now being delivered to the new buyer.

Expresso is the only CDMA network in Ghana. It has the lowest subscriber base of about 127,000 as half year, June 2014. This represent about 0.4% market share. It subscriber base has been falling month on month for more than one year now. Its data customers have also been rising and falling month after month.

Pundits believe the remodeling of Ghana's sole CDMA network to host MVNOs could be the best thing that happened to the company and to the country with respect to the spectrum band (850MHz) the telco has, which is largely under-utilized due to its low sand ever-decreasing subscriber base.

 
Kludjeson
Kofi Kludjeson, CEO of Celltel Limited, original CDMA licensee

Meanwhile, there are legal battles around the neck of the company. The owner of the Celltel Limited, Kofi Kludjeson, who was originally given the CDMA license that Expresso uses now, is still in court claiming ownership of the company.

He insists he had a partnership agreement with another company, Hutchison Telecoms from Hong Kong years back, but Hutchison never paid him a pesewa so he still owns 100% of the company.

Kludjeson has therefore been describing companies like Sudatel and others, which subsequently claimed ownership of the company as frauds.

But none of his court cases has been determine yet. Story by Ghana|Adom Business|Samuel Nii Narku Dowuona/[email protected]