Govt asking for FCFA 150b to grant 3G, 4G licenses

According to the Weekly Reperes, the mobile operators MTN and Orange are currently in negotiations with Government to lower the sum to 75 billion Cfa francs sought for the renewal of their mobile 2G licence, with 3G and 4G.

The amount the telcos consider high was determined by the American firm Maas Telecom, retained as an expert by the Government to financially evaluate the new license.

The 75 billion Cfa francs per operator given by Maas Telecom were determined based on the current financial situation of Orange and MTN, and their financial forecasts for the next 10 years. This new licence term; and renewal of concession procedures have been applied in other countries in sub-Saharan Africa.

According to Maas Telecom, with the 3G, over the next 10 years, MTN Cameroon will achieve 3,571 billion CFA revenues, with earnings before interest, taxes and amortization (EBITDA) of 1,282 billion. Orange Cameroon, will record revenues of 2,147 billion Cfa francs, with an EBITDA of 750 billion Cfa francs.

According to the newspaper the Oeil du Sahel, Orange Cameroon proposed the sum of 40 billion Cfa francs for the new licence while rival MTN proposed 35 billion Cfa francs.

In the event that the two companies would raise the argument of expenses related to the infrastructure investment to justify their desire to lower the amount, according to the Ministry of Posts and Telecommunications, MTN and Orange will spend not more than 18 billion Cfa francs to modernize 900 telecoms sites to keep their 3G network.