ORANGE ENTERS GUINEA'S CELL PHONE MARKET

UNCLAS SECTION 01 OF 02 CONAKRY 001219

SIPDIS

DEPT PLEASE PASS TO USTR FOR LAURIE ANN AGAMA
COMMERCE FOR SALIHA LOUCIF

SIPDIS

E.O. 12598: N/A
TAGS: ECPS EIND ECON GV
SUBJECT: ORANGE ENTERS GUINEA'S CELL PHONE MARKET



1. (U) SUMMARY: Orange, Guinea's newest telecom operator, launched
its operations on November 5 with a ceremony and short welcoming
speech by Prime Minister Kouyate. Representing a joint partnership
with Orange Groupe France Telecom, Orange's local business partner
has big plans for Guinea. Local consumers hope that Guinea's newest
telecommunication company can help improve overall communications
and pressure prices downward. END SUMMARY.


2. (U) Prior to the official launch ceremony, EconOff met with
Kalil Aboukhalil, Managing Director of Orange Guinee on October 30.
Aboukhalil, who is also a close friend of President Lansana Conte,
said that his company, Spacetel, decided to go into partnership with
Orange Groupe France Telecom (FT) in order to provide
cost-effective, reliable network coverage. According to Aboukhalil,
FT invested approximately USD 21,400,000 into the project, making FT
the major shareholder in the new Orange Guinea company. Aboukhalil
said Spacetel needed a strong partner such as Orange to compete
effectively with Sotelgui, Areeba, Intercel and eventually Celcom, a
US operator that is also preparing to launch a cell phone network in
late 2008.


3. (U) Orange, noted Aboukhalil, with its experience,
professionalism, and financial resources will be able to introduce
new products and services into Guinea. He contrasted the benefits
of an Orange partnership with those of other local operators, which
he characterized as simple businessmen with no professional skills.
Aboukhalil added that Orange's success in neighboring Senegal, Ivory
Coast, Mali and Guinea-Bissau will provide useful experience as it
seeks to be the leading mobile operator in Guinea. AbouKhalil said
that with its hundred million subscribers around the world, Orange
will make a difference in Guinea.

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WIDER NETWORK COVERAGE
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4. (U) According to Aboukhalil, during the first phase of its
rollout, Orange will cover the following prefectures: Kindia, Coyah,
Dubreka, Boke, Mamou, Pita, Labe, Kankan, Faranah, and N'Zerekore.
The second phase will include Fria, Dalaba, and Siguiri. The
company's immediate target is to have network coverage in at least
limited zones in all prefectures by the end of 2007, and along all
major roads leading to the country's borders by January 2008.
Aboukhalil said he hopes to extend network coverage throughout all
of Guinea by the end of 2008.

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NETWORK CAPACITY
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5. (U) Orange's initial network capacity, Aboukhalil said, is for
1.5 million subscribers and he already has approximately 300,000
subscribers signed up. Foret-Forte, a Chinese logging firm
operating in the Forest region, purchased 2000 SIM cards.
Aboukhalil added that he expects Orange to increase its market share
rapidly. He also disclosed that roaming services will soon be
available within some areas of the U.S. and the E.U.

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JOB CREATION
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6. (U) Aboukhalil confided that as a member of the Economic and
Social Council and the Guinean Patronat, he has always advocated for
youth employment, professional and undergraduate alike. He said he
has hired the Government's former Director of Telecommunications to
provide technical expertise and estimates that Orange will provide
2000 direct jobs and 30,000 indirect jobs. SIM and calling card
distribution alone will create thousands of jobs, in addition to
employment for telecom engineers, technicians, agents, etc.

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CORPORATE RESPONSIBILITY
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7. (U) On the social front, Aboukhalil said that Orange plans to be
a model company and will focus on key social priorities in both
urban centers and villages. Construction of schools, health
centers, provision of ambulances, scanners and clean water will be a
top priority, he said. "We are here to make profits and at the same
time, help eradicate poverty," he noted. Aboukhalil also disclosed
that Orange intends to sponsor Guinea's national team for the
African Cup of Nations Competition in Accra, in January 2008.

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DIFFICULTIES
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8. (U) Aboukhalil reported some difficulties Orange faces in

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starting operations, which include unnecessary government
bureaucracy, uncompromising prefects, inaccessible roads in certain
areas and problems installing equipment in high mountainous areas.

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COMMENT
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9. (U) In a country where land lines frequently do not work,
Guinea's telecommunication sector is currently dominated by two
network providers: Sotelgui and Areeba. Many people subscribe to
both services and carry two phones in order to improve communication
capability. Consumers reportedly hope that the addition of a third
competitor could further improve communications and possibly
encourage market rates to drop. Already, the cost of SIM cards and
rates reportedly went down considerably over the past few months, as
the existing cell phone companies cut rates in anticipation of
Orange's entry into the market.


10. (U) Of note, there was a crowd of approximately 75 people
standing outside the facility waiting to see the Prime Minister
during the opening ceremony. The crowd exploded into cheers,
clapping, and waving when Kouyate drove up to the building. They
then waited outside while the ceremony took place inside the walled
compound. When the Prime Minister left, the crowd repeated its
cheering and waving at the departing caravan. Interestingly, upon
further investigation, Embassy discovered that most of the crowd was
paid to be there, and were brought in from downtown Conakry by
Orange - no small feat given the distance between the facility and
downtown. END COMMENT.

CARTER