Africa: Millicom International to Spend US$1 Billion in 2008
Reports by Investor's Business Daily say Millicom International Cellular Company (MICC) expects to spend at least another $1 billion in 2008. Much of that spending is in Africa - Sierra Leone, Chad, Congo, Ghana, Tanzania, and Senegal.
The company upped its guidance for capital spending in November 2007 to $1 billion from $800 million.
"I'm very optimistic for the outlook in the 16 markets where we operate," Millicom Chief Executive Marc Beuls said. "What I see is very strong GDP growth, which should continue in 2008. These countries are inviting in foreign investors, opening up their economies." Some analysts believe that for many developing countries like Sierra Leone, having wireless phone services available is a key part of modernizing economies.
Meanwhile, Beuls affirmed that by building a wireless network MICC helps create economic infrastructure, allows people to communicate doing business and helps create growth in the market.
However, while the company tries to make wireless services more affordable by charging customers on a per-second rather than per-minute basis, one of its challenges is that much bigger telecom firms are now eyeing small developing countries where wireless usage is still low.
Beuls is in agreement: "Africa is very much the flavor of the year, a lot of newcomers are coming into the market," and added. "But some companies underestimate what it means to operate mobile businesses there. It's a much different environment, and you need to adjust your business model."