Millicom Needs To Improve Margins To Unlock Value
Stephen Simpson, CFA
Stephen Simpson, CFA
Fri, May 27, 11:00 AM
- Orange (ORAN -1.3%) is said to be talking informally with Millicom International Cellular (OTCPK:MIICF +3.5%) in order to buy still more African operations.
- Orange -- which has been pouring money into African expansion -- is interested in Senegal, Ghana and Chad, Bloomberg says, as well as East Africa after it sold out of its Kenyan operation.
- Millicom had previously agreed to sell its assets in Democratic Republic of Congo to Orange for $160M. It's looking to get out of West and Central Africa and focus on its eastern holdings. “The market clearly wants an exit from Africa for Millicom,” analyst Stefan Gauffin says.
Nov. 25, 2015, 6:32 PM
- VimpelCom (VIP +6.8%) is looking at stable debt even with ongoing dollar risks, Fitch says, giving the Russia-focused telecom a BB+ Issuer Default Rating with stable outlook.
- While VimpelCom's debt is moderate and declining, 71% is in U.S. currency, which may increase costs for Amsterdam-based VimpelCom as the U.S. raises rates.
- VimpelCom's interests in Italy's Wind are "highly leveraged but ring-fenced," the firm says.
- Fitch expects VimpelCom to stay a strong mobile player in Russia despite competition from Mobile TeleSystems (NYSE:MBT), Millicom (OTCPK:MIICF) and Megafon (OTC:MFOYY): "Although its market share has been on a steady decline over the three years to 2014, a catch-up in capex should allow it to compete on a more level playing field with its larger peers."
- Shares finished strong today after a report the company may be near a settlement with U.S. authorities related to an Uzbekistan corruption probe.
- Previously: VimpelCom up 2.4% on report it's near $775M U.S. settlement (Nov. 25 2015)
Oct. 8, 2015, 8:02 PM
- Boom times for African mobile companies may be coming to an end with growth about to slow down sharply, says industry group GSMA. And that could encourage consolidation.
- Subscriber growth of 13% from the past five years will become 6% in the next five, as Africa faces its own "rural challenge" despite relatively low penetration.
- Low spending power in rural areas means expansion is even more difficult than in the U.S., though not even half the continent's population will have subscribed to a mobile service by 2020, the study says.
- That could drive consolidation so players can achieve economies of scale required to take on that expense. Already dealing: Vodacom (OTC:VODAF) bought Neotel to force competition with Telkom (OTCPK:TLKGY +3.9%); Millicom (OTCPK:MIICF -0.7%) bought Tanzania's Zantel from the UAE's Etisalat. Other key players: Orange (ORAN +0.6%), making a major expansion in the region; MTN Group (OTCPK:MTNOY +1.2%), the continent's biggest wireless operator.
- Previously: Orange shuffles Africa/Middle East leadership (Oct. 01 2015)
Millicom offers digital lifestyle products and services to emerging markets.
Industry: Telecom Services - Foreign
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