Telephone game

In Senegal, telecoms operator Axian takes the helm at Free

By Quentin Velluet

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Posted on August 2, 2023 08:46

 © Mamadou Mbengue, managing director of Free Senegal. Photo supplied
Mamadou Mbengue, managing director of Free Senegal. Photo supplied

The Madagascar-based group has signed a deal to acquire an extra 40% stake in Senegal’s second-largest telecoms operator, putting it in change.

Madagascan conglomerate Axian is no longer sticking to just commercial matters when it comes to Senegalese telecoms operator Free. From now on, the group headed by Hassanein Hiridjee will be able to control the entire strategy of the country’s second-largest phone company.

Axian has owned Free since 2019 via Saga Africa Holding, which consists of three firms: NJJ, Senegalese businessman Yérim Sow’s Teyliom, and French billionaire Xavier Niel’s personal holding company. 

In a 24 July press release, Axian announced that it had signed an “agreement to acquire an additional 40% stake in its Senegalese operations”. The transaction will give Axian 80% control of the company, along with a free hand to steer its overall strategy.

The final agreement is subject to regulatory approval, however.

Growing market

With around 24% of the mobile market, Free Senegal says it has seen a 20% increase in revenues over the past three years. According to the operator, this figure exceeds 100bn CFA francs ($170m).

“This agreement will be beneficial for Free Senegal,” says Mamadou Mbengue, managing director of Free Senegal, when asked about a possible management reshuffle in the near future. Axian’s management did not respond to a request for comment by publication time. 

With the addition of Free Senegal to its portfolio, Axian has again confirmed its appetite for African telecoms.

Axian’s market share has stayed flat since the takeover of Millicom’s assets by Saga Africa Holding. However, that’s no small feat in a growing market that has been severely tested by regulatory sanctions, consumer disapproval and fierce competition in mobile money.

As in Togo, where it controls Togocom, and in Tanzania, where the group took over Tigo’s assets from Millicom in 2022, Axian is expected to focus on expanding and modernising Free’s network in Senegal. Plans to add 500 telecoms towers over the next four years are already in place, while efforts to accelerate the development of financial services and fibre optics (business and home) are expected to continue. 

The subject of 5G will also be on the agenda in the coming months. Sonatel, the incumbent and dominant operator in Senegal, has just been awarded the first 5G licence for 34.5bn CFA francs ($58m). Free’s bid was just 3bn CFA francs ($5m). 

Opportunities abound 

With the addition of Free Senegal to its portfolio, Axian has again confirmed its appetite for African telecoms.

Keeping a close eye on merger and acquisition opportunities across the continent, the group has been in talks with MTN for a number of months, with a view to taking over the South African group’s subsidiaries in Guinea, Liberia and Guinea-Bissau.

Since April 2022, Axian has also been negotiating with the shareholders of Zamani Telecom – formerly Orange Niger – and local authorities for a takeover of the operator.

Like its Senegalese rival Sonatel, Axian is also keeping an eye on Mattel in Mauritania since its aborted takeover by Telecel Group. Finally, in South Africa, the Hiridjee family’s company has been in contact with Telkom to look into opportunities for a partial takeover of the operator.

With 3,500 employees in its telecoms unit, Axian generated sales of $911m from this activity in 2022, excluding non-consolidated activities, such as Free in Senegal and Telma in the Comoros.

The company was able to conclude a $420m bond issue in February 2022 with support from international lenders, such as

  • the World Bank Group’s International Finance Corporation,
  • the German Investment Corporation,
  • British International Investment (formerly CDC Group) and
  • the Emerging Africa Infrastructure Fund.

Axian invests 30% of its telecoms sales in developing its networks. That compares to just 15-20% for other major operators, such as MTN, Orange, Vodacom and Airtel.

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