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History

Mozambique Investment Forum Finance Opportunities within Mozambique Paris, 3 October 2003 Rui Fernandes, Chairman, mCel. In 1997, mobile telephony was introduced to Mozambique Government legislation stipulated that this would be part of TDM’s basic service offering. History.

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History

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  1. Mozambique Investment ForumFinance Opportunities within MozambiqueParis, 3 October 2003Rui Fernandes, Chairman, mCel

  2. In 1997, mobile telephony was introduced to Mozambique Government legislation stipulated that this would be part of TDM’s basic service offering History • A joint venture between TDM E.P. and Detecon, GmbH – Telecomunicações Móveis de Moçambique Lda (tmm) was formed • Shareholding of tmm – 74% TDM, 26% Detecon

  3. TDM E.P. own the infrastructure tmm manages the service: does not own assets makes recommendation to TDM maintains infrastructure promotes the service Detecon responsible for Management of the company for the first three years (1997-2000) History

  4. End of Detecon Management Contract New Management introduced Total staff of 169 Over 52,000 subscribers Number of shops: 7 Number of dealers: 72 Roaming with 64 operators Service limited to Maputo and surrounding areas, Xai Xai, Beira, Chimoio and Manica Beginning of 2001

  5. Network Infrastructure Capacity NSS: 75,000 subscribers BSS: 60 sites prepaid platform: 30,000 subscribers voicemail: 45,000 mailboxes SMSC: 10 messages per second billing system: 50,000 subscribers Beginning of 2001

  6. Government changed legislation–opening the telecom sector This allowed competition to the telecom sector–starting with mobile Tendering process for a second mobile license was launched License awarded to Vodacom on 28 August 2002 Until now, Vodacom not operational 2002 - Changes to the Sector

  7. Government decided separation of TDM and tmm As a result tmm changed from a management company to a fully fledged mobile operator All mobile assets and liabilities to be transferred from TDM to tmm as from 1st January 2003 Interconnect Agreement to be negotiated with TDM based on the same conditions as those to be applied to Vodacom License to be awarded to tmm on the same conditions as those applied to Vodacom End of 2002

  8. Detecon agreed to sell its shares in tmm tmm 100% fully owned by TDM tmm given a new name – Moçambique Celular, Lda abbreviated as mCel Assets and liabilities transferred to mCel Interconnect Agreement negotiated and signed by end of May 2003 License awarded to mCel of the 30 May 2003 Beginning of 2003

  9. Company experiences incredible growth mCel Today

  10. Total staff of just over 410 Subscriber numbers over 370,000 Teledensity over 2% Number of shops: 17 Number of dealers/outlets: over 800 Roaming with over 140 operators Service extended to all provincial capitals Constant expansion of the service mCel Today

  11. Constant expansion of the service mCel Today

  12. Network Infrastructure Capacity NSS: 500,000 subscribers BSS: 160 sites prepaid platform: 500,000 subscribers voicemail: 150,000 mailboxes SMSC: 20 messages per second billing system: 150,000 subscribers mCel Today

  13. New image launched–more customer focused Some services offered free no connection fee for SMS no fee for call barring free voicemail retrieval no connection fee for Fax & Data Embarked on a subscriber education campaign Introduced lower denomination recharge vouchers Reduced prepaid starter pack from 650,000MT to as little as 199,000MT Achievements

  14. Continue growth in revenue 2001 – total gross USD26 million 2002 – total gross USD42 million 2003 – Expected total gross USD60 million Profit 2001 - Over USD5 million 2002 - Over USD14 million Achievements

  15. Average Revenue Per User (ARPU) • Source Sunday Times Survey

  16. Projections

  17. Projections

  18. Financing required for two projects: Phase 7/2002 Project value: USD 15 Million Financing requirement: USD 13 million Phase 8/2003 Project value: USD 21 million Financing requirement: USD 12 Million 2004 to 2006 Project value: USD 48 million New finance requirements Project Financing

  19. For mCel: continual demand for mobile services pressure to continue investing in the capital program to cater for the demand financing of such growth For the Financiers: don’t always go for the big players – look at some of the smaller operators take the risk Challenges

  20. Thank you very much for your attention

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