Unitel, Sonangol and Angola's privatisation programme - disconnected?

One of the key objectives of the Angolan privatisation programme ‘PROPRIV’ set in motion by President Joao Lourenco, was to privatise Angola’s dominant mobile phone operator Unitel, which currently controls over 80% of Angola’s mobile market.¹

In 2019 key stakeholders signalled that the company would be listed on the Angola Stock Exchange and international providers – South Africa-based MTN, Orange of France and Vodafone of the UK – all expressed interest.

However, in January 2020, instead of the privatisation process moving forward, the Angolan state oil and gas company Sonangol acquired a 25% stake in the company from the Brazilian telecoms firm Oi. Following the acquisition, Unitel is now controlled by three Angolan entities:

• Vidatel, controlled by the billionaire and daughter of former president, Isabel dos Santos, with a 25% stake;
• Geni, controlled by General Leopoldino Fragoso do Nascimento, with a 25% stake; and
• Sonangol, via its subsidiaries Mercury and PT Ventures, indirectly holds the remaining 50%.

Sonangol's latest acquisitions
In addition to privatising Unitel, the PROPRIV programme aims to sell Sonangol’s non-core assets. The company is reportedly set to sell at least 50 subsidiary companies, including Sonaid and Sonasurf Angola. However, immediately after increasing their ownership in Unitel, Sonangol also raised its stake in Banco Economico from 39% to 70%.

Sonangol’s chairman, Sebastiao Pai Querido Gaspar Martins, has stated that there is no conflict between the government-led privatisation programme and the state oil company increasing their interest in Unitel and Banco Economico, as long as they prove to be profitable.

Unitel's future
Sonangol’s control over Unitel will undoubtedly change the future of the company. Isabel dos Santos, owner and former chairwoman of Unitel, was recently involved in the scandal dubbed as Luanda Leaks and had her business holdings frozen by an Angolan court order. Its 50% ownership now enables Sonangol to closely manage appointments to the board of directors and have greater control over company decisions.

In addition, with the fall of oil prices, it is unlikely that the state oil company will drop one of their now most important sources of revenue, Unitel. Indeed, Sebastiao Martins has already announced the privatisation process should be delayed until the new leadership team has taken steps to improve its offering.

So, the future of the largest mobile operator of Angola remains unclear. While the Angolan government tries to push the PROPRIV programme and attract foreign investment, state-owned Sonangol is not showing any sign of reducing their interests in non-core sectors. It appears that for now Sonangol has the final say on when international investors may participate in what is an undeniably attractive market.