Societe des Telecommunications de Guinee (Sotelgui)

Cancelled

Societe des Telecommunications de Guinee (Sotelgui) was the national state-owned company responsible for providing local, national and international phone services in the country. The company was partially divested in December 1995 when the government sold through a private sale a 60% stake for US$45 million to Telekom Malaysia (TM). TM was granted a 10-year exclusivity period for the local wire-line and long distance services. The divestiture package also included a license to provide cellular phone services in the country. The company had planned to start providing cellular phone services by the end of 1997. Guinea Sotelgui awarded Telular Corp. a US$8 million contract to supply 17,000 digital fixed wireless terminals in January 1998. An internal audit of Sotelgui in 2002 revealed the embezzlement of Gnf30m (US$140,000) and two senior members of staff were suspended in mid-July pending further investigations. It was only in late 2001, after the sale of the GSM licence to Sotelgui that the company was able to invest in new facilities. As of mid 2002, Sotelgui was by far the biggest mobile operator with 40,000. The company had more than doubled its telephone subscriber base by December 1999 under the new management of Telekom Malaysia. The Malaysians inherited 19,000 customers from the state-owned operation, but increased this number to 40,000 after only six months in charge. As of 2003, only the central business district of Conakry, Kaloum, was well served (with 26,000 lines); other parts of Conakry were without coverage. Coverage was lacking elsewhere and large companies tended to rely on their own systems for nationwide links. In 2003, Telekom Applied Business Sdn Bhd (TAB), a subsidiary of Telekom Malaysia Bhd and a Multimedia Super Corridor (MSC)-status company secured a contract to supply a prepaid fixed line telephony service called Ezeephone System. Sotelgui had agreed to purchase the Ezeephone System from TAB with an initial capacity for 5,000 lines. The company was also expanding its GSM coverage, investing about US$12 million, accomplished through a loan contracted by Sotelgui with local banks. By end 2004, the firm had 150,600 total fixed and mobile subscribers, one-third of the 500,000 new customers that were initially expected. At the end of 2005, Societe des Telecommunications de Guinee had around 165,000 subscribers. In December 2005 TM decided to cease all operational and managerial control of Sotelgui as the initial step to our total exit from Guinea. Sotelgui was henceforth operated by the Comite Interimaire de Gestion (CIG), made up of representatives of the Ministry of Telecommunications, Ministry of Finance, and a Sotelgui director. March 2005- Telekom Malaysia is divesting from Guinea’s telecoms utility, Société des Telecommunications de Guinée (Sotelgui), almost ten years after the Malaysian firm took a 60% stake in the operation. Telekom Malaysia attributes its withdrawal to a new “focus on geographic regions closer to home”. However, the firm is believed to have been frustrated by difficulties in getting the network operational. Sotelgui is also said to be unhappy: the firm currently has only 150,600 subscribers, one-third of the 500,000 new customers that were initially expected. The Guinean government is now seeking a new investor for Sotelgui. None