The path less trodden

Expresso Telecom, the international investment arm of Sudanese operator Sudatel, has kept a low profile as it has gone about acquiring greenfield and operational CDMA operators in West Africa in the past few years. As the company prepares for significant investment into its subsidiaries and for a shareholder restructuring programme, chief financial officer and acting CEO Emad Sukker shares with Michelle Mills how the company intends to grow organically, while extending its geographical footprint

Dubai-based Expresso Telecom focuses on operating CDMA mobile networks across West Africa, having acquired Intercellular in Nigeria and Kasapa in Ghana, as well as new licences in Mauritania and Senegal. Chief financial officer and acting CEO Emad Sukker says the company is trying to distinguish itself in the realm of CDMA technology, which Sudatel also uses for its mobile network in Sudan.

“I believe that by the end of 2009 we will add another two or three operations to our map. Not only acquisitions of existing operations, we might add some new licences,” states Sukker. “We have different deals on the table and we are evaluating them currently.”

Of Expresso’s operational activities, Intercellular, in Africa’s most populous country, Nigeria, will receive a major investment boost of US$500 million over the next two years, as the operator intends to update its network in a bid to improve its market position.

“Intercellular was the first telecoms operator in Nigeria, it was the pioneer. It is a very small company with around 50,000 subscribers and an old network. Therefore we are rebuilding the network from scratch,” Sukker explains. “Nigeria is a large and difficult country, so it will take us some time before the new network is ready and I don’t expect we will launch before the fourth quarter.”

While Nigeria remains one of the most competitive markets in Africa, with five large GSM operators and another five smaller CDMA contenders in addition to Intercellular, Sukker believes the operator can be transformed and succeed in the significant West African market of approximately 140 million people.

As of the end of 2008, Nigeria’s mobile penetration rate stood at 45 per cent or 63 million, according to the Nigerian Communication Commission. Expresso is targeting around 1.5 million subscribers within its first year of revamped operation, and Sukker believes such numbers are abundantly achievable.

“We will not go and compete with the large operators; rather we know what segment of the market we are after. We know what can and cannot be achieved, we know what is reasonable. I think the market can give enough to everyone,” Sukker asserts.

“I’m always proud to mention our success story in Sudan. Sudani was the third mobile licensee behind MTN and Zain, but we overtook MTN to achieve second position. Sudan is a very large country with different cultures, and I believe we have the spirit to understand how to compete in different markets and gain market share,” Sukker adds.

Expresso is also upgrading Kasapa’s network in Ghana, which the company acquired in July 2008. The current network has a limited range of coverage, and Sukker says that as it expands the network, it will acquire more subscribers. Currently Kasapa serves around 400,000 customers, and is the fourth mobile operator behind MTN, Tigo and Ghana Telecom.

In Mauritania, Expresso launched as Chinguitel in August 2007, six and seven years after incumbents Mauritel and Mattel respectively. Sukker says the operator has close to 260,000 mobile customers and is in the testing phase of the country’s first WiMAX network.

He says that depending on licensing and frequency, the company will consider deploying WiMAX networks wherever possible, as a supplementary network to its CDMA network.

Senegal is the latest market that Expresso has entered, with a soft launch in January, and a commercial launch set to take place in the very near future.

Expresso is 100 per cent owned by Sudatel, but is undergoing a process where new shareholders, yet to be named, are to acquire 25 per cent of the company.

“We plan to IPO within the next two years and I believe DIFC (Dubai International Financial Centre) is the proper environment to prepare for this. During this time we will create excellent value in Expresso, which will help us grow and hopefully undertake a successful listing.”