- An international private equity firm focused on investing across the African continent [Emerging Capital Partners (ECP)] on Monday announced a US $20 million investment in Cellcom Telecommunications Limited, mobile telecommunications company with operations in West Africa.
The funds will be used to expand Cellcom's network and operations in Liberia as well as launch services in Guinea and Sierra Leone.
"Cellcom is the leader in the Liberian mobile telecoms market and has a very attractive business model that combines pre-paid services, low cost handsets, aggressive marketing and superior customer service," said Tom Gibian, Chief Executive Officer of ECP.
"We are confident that the company will be able to expand its operations and repeat its success in Guinea and Sierra Leone as well as new West African markets."
With 45% mobile subscriber growth rate, Africa became the world's fastest growing market for mobile telecommunications. West Africa has led the African continent in mobile telecom growth, recording 75% subscription growth in 2006 alone.
The continent is expected record an additional 50% subscriber growth by 2010.
But mobile phone penetration rates in Liberia [17%], Guinea [6%] and Sierra Leone [10%] are among the lowest on the African continent.
Cellcom has seen significant opportunity to expand capacity and coverage in these markets where demand still outstrips supply.
"ECP is well versed in the African mobile telephony industry, and we believe Cellcom has the technical and operational capability to become a leader in the Manu River sub-Region of the West African market," said Bryce Fort, Managing Director of ECP.
"The low levels of current market penetration combined with high demand make wireless
telecommunications one of the most promising sectors in West Africa."
The current investment in Cellcom is ECP's seventh in the African mobile telecom industry, with other stakes in MTN Cote d'Ivoire, Starcomms Nigeria Limited and Celtel Gabon as well as successful exits from Telecel Faso, Orascom Telecom Algeria, Celtel International, and Sonatel.
The Cellcom investment was made through ECP's US $523 million ECP Africa Fund II, the fund
established in December 2005 to capitalise on the numerous investment opportunities throughout Africa in telecom, natural resources, financial services, agribusiness, transportation, and power and water.
ECP is the first private equity firm to raise more than US $1.2 billion to invest in companies across the African continent. Its team has an eight-year track record of pan-African investing through six successful funds.
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