Celtel International has asked Celtel Africa to come out with the plans of an initial public offering (IPO) to international as well as local investors.
Since Celtel has a vast presence in multiple countries in Africa, which includes Madagascar, Chad, Burkina Faso and the Democratic Republic of Congo, getting the regulatory approval from different countries will take time. Hence, Zambia won the race among other countries and will be the first to launch the Celtel IPO.
Where does the Celtel Business valuations stand right now?
Celtel is present in 15 different countries in Africa. It has a huge subscriber base of more than 40 million connections. In the Zambia IPO, Celtel plans to sell around 1 billions shares which make around 20% of the total Celtel shares.
Celtel offers voice services, international roaming, SMS and mobile Internet to subscribers in urban and remote rural areas.
Zambia's Minister of Communications and Transport Dora Siliya said the move by Celtel to sell shares is a good response to the growth of information and communication technologies (ICT) in the country.
Siliya said the Zambian government will continue providing a favorable environment that will enable mobile companies in the country to expand to rural areas.
Should I invest in Celtel IPO?
The business looks good, valuations of Celtel are excellent. The presence in more than 15 countries in the continent is a positive sign. The only problem is with the government approvals. It may find it difficult to expand its network to rural areas because government authorities were not giving the company incentives to foster its growth. Celtel wants authorities to reduce import tax on telecom equipment in order to quicken the company's network expansion program.
But several governments in the region are not willing to waive such taxes, claiming telecom companies are making huge profits.
The ongoing Safaricom IPO in Kenya is making waves globally, as it has been opened for foreign investors as well. The IPO of Safaricom, Eastern Africa's largest GSM (Global System for Mobile Communications) company, has stirred up great interest. The offering period began on March 28, is due to close April 23 and is expected to end up being over-subscribed.
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