The strong presence of the State in the telecommunications sector, where it is an indirect shareholder in seven companies and owner of three others, harms competition in the sector, according to a study by the Competition Regulatory Authority (ARC) for 2021, which recommended reducing participation of the State in the sector. But since then, the presence of the State has even increased as it has strengthened its position in Unitel, but also in Movicel.
This scenario, according to the study, “is worrying”, because “it reduces private intervention and could signal a potential reversal of the sector's liberalization process to the initial phase of greater control of telecommunications by the State”.
This study relates to 2021, a time when the State no longer owned 100% of the main telecommunications operator, Unitel, and when Africell was not yet operating in the country.
The document published on the ARC website states, for example, that in fixed telephony, MSTelcom (from Sonangol) and Angola Telecom (public) held prominent positions, with 55% and 29% of the market share. In mobile telephony, Unitel, which at the time still had two private shareholders, Isabel dos Santos and General Dino (Angola reached an agreement with the Brazilian company Oi in 2020 to purchase 25% of PT Ventures), had a share of market close to that of a monopoly, 90%, with the remaining 10% falling to Movicel, where today the National Social Security Institute (INSS) holds 51% of the shareholder structure.
In terms of Mobile Internet services, Unitel held, at the time, more than 89% of the market share. In Fixed Internet services, ZAP stood out with 42%, followed by TV Cabo with 26%, the latter where the State is a shareholder with 50%, through Angola Telecom (see table).
In terms of satellite television, ZAP controlled 64% of the market share. Tv Cabo had 73% of subscribers to cable television services, followed by Zap with 23%.
“Direct intervention by the State in the sector can create distortions in the market, as a result of possible guarantees and advantages (government guarantees, financing, subsidies or even specific regulatory standards) that are not available to private competitors. This specific asymmetry can also contribute to a potential reduction in private investor interest and, consequently, to a drop in potential competition”, warns ARC.
The State's participation in the telecommunications sector is essentially carried out by the public companies Angola Telecom and Sonangol in various activities in the sector as service providers and due to the close relationship with other operators as a shareholder.
The study points out that these public companies, in addition to providing services in the retail market (telephony and fixed internet), are also present in the wholesale market (including local and international transport).
At a structural level, the regulator's concerns are the high barrier to access both CAPEX (Capital Expenditure, which can be defined as expenses or Investments in Capital Goods) and OPEX expansion (Operational Expenditure, which means the capital used to maintain or improve physical assets of a company) imposed by the lack of infrastructure and basic conditions.
As well as the possible limitation or elimination of access, by competitors or potential competitors, to supply or distribution channels. In fact, just look at the process of Africell's entry into the country, in which the difficulty it faced with Unitel is public, which refused to share some infrastructures with the operator of North American nationality, based in the United Kingdom and with Lebanese origin.
