x Abu Dhabi, UAETuesday 16 January 2018

Zain stays on track with plans to invest

Zain Sudan says $100 million investment in South Sudan is ongoing; has not been asked to rebid for license following independence.

Zain Sudan says it will complete a US$100 million (Dh367.3m) investment plan in South Sudan, unperturbed by speculation it may have to bid again for its telecommunications licence there.

The company, a unit of Zain Group based in Kuwait, said it had not been asked to reapply for its operating licence in South Sudan, which declared independence from the north this year.

Elfatih Erwa, the chief executive and managing director of Zain Sudan, said the company had divided into two separate entities since the country split, but claimed it was not facing licensing issues in the south.

"There's no new bid of the licence. We are continuing working as normal, but we had to split the operation to make a separate operation," Mr Erwa said.

He said the South Sudan government had "encouraged us to put in more investment" into infrastructure in the country.

"This year … before and after the split, we have put close to $100m of investment in the south," Mr Erwa said.

That will include funding of a high-speed fibre network in the country, he added.

Matthew Reed, a senior analyst for the Middle East and Africa at Informa Telecoms & Media, said Zain Sudan had "extended their network extensively into South Sudan in the past couple of years".

However, he added there may be some regulatory pressure in the future. "There's a lack of clarity about what's going to happen on the regulatory side," he said.

"I'm sure the South Sudan government won't want to jeopardise the continued operation of these networks, which are important to the economy.

"But at some point they'll have to move to set up licences to operate in the south of Sudan, and decide on licence fees and so on," he said.

The country is still grappling with the formation of proper regulations, Mr Reed said.

"There's clearly a lack of administrative capacity in the South Sudan government.

"So it could take quite a long time before all those things are decided," he said. "It might just be a formality; they may just award [the license to Zain Sudan]," Mr Reed said.

South Sudan declared independence in July after a bloody civil war that lasted for decades.