Sub-Saharan Africa mobile operator LAP Green Network of Libya is in talks for a sale of the company even as controversy unfolds over how it made its own acquisition of the Zambia Telecommunication Co. (Zamtel).
The Digicel Group, which operates telecom services in the Caribbean, Central America and Pacific regions, is part of a consortium that offered US$270 million for LAP Green Network, according to published reports.
After dominating mobile markets in the Caribbean and Pacific Islands, Digicel founder and Chairman Denis O'Brien now seems to have set his target on the African mobile market. The African region is seen as a potentially attractive market for international telecom operators who can offer reliable and widespread low-cost mobile phone services.
An Irish Times report last week said the deal is subject to approval from the UN Security Council and the European Union. LAP Green Network is owned by a state investment fund set up by Libyan President Muammar Gaddafi in 2006.
The Libyan Investment Authority (LIA), the majority owner of LAP Green Network, which owns 75 percent shares in Zamtel, has said the network has not been sold. LAP Green Network Chairman and CEO Wafik Alshater said, however, "I can confirm that LAP Green Network's previous management had been involved in talks with potential buyers."
But another report in the Times newspaper of London cited documents that suggest that a takeover agreement was signed on Aug. 8, 2011, just two weeks before the overthrow of the Gaddafi regime.
The report added that the deal had been given the green light by Libya's National Transition Council (NTC) and would proceed as planned. LAP Green Network was incorporated in 2007 to invest in telecommunications and technology. LAP Green Network had a stake in Telekom Serbia but sold it this year.
Meanwhile, the future of LAP Green Network, operating in Zambia as Zamtel, is uncertain as the new Zambian government claims the company was fraudulently sold to LAP Green Network.
The report by the Commission of Inquiry appointed to probe the sale of the company by President Michael Sata established last month that the transaction was illegal and fraudulent.
The decision to reverse the sale of the company is yet to be made by Sata, who has never been in favor of the sale of the company to LAP Green Network.
The previous government vice president, George Kunda, told the Commission of Inquiry that Zamtel was genuinely sold in order to save it from closing after the government failed to recapitalize it. Kunda warned that reversing the sale of the company will erode investor confidence and no telecom investor would be willing to invest in Zambia if the security of investments is not guaranteed.
LAP Green Network claims it has invested $170 million in network expansion of the company's capacity and coverage since last year.
The investment, Zamtel managing director Hans Paulsen said, has resulted in the "growing of market share from 3.5 percent at the time of the takeover (July 2010) to now 10.5 percent of the fixed broadband customers."
The company is expanding with the ongoing 2.5G to 3G network rollouts.
The Zambian government has already reversed the sale of the fiber-optic network belonging to the Zambia Electricity Supply Corp. (Zesco), a government-run power utility company. The fiber-optic network was sold together with Zamtel but LAP Green Network has since taken the matter to court, claiming the sale agreement has been breached by the Zambian government.