MTN, Belgacom, and Swisscom in unique 3x3 Telecoms Wholesale Deal

Yesterday MTN - the African mobile operator - completed the purchase of 20% of Belgacom International Carrier Services (BICS) for € 74 million. BICS is the telecoms wholesale joint venture (jv) owned by Belgacom and Swisscom the incumbent operators in Belgium and Switzerland respectively. BICS future revenues will be reported by Belgacom (the majority shareholder with 57.6%) unlike the past where the partners had allocated proportionately.

This is ground breaking on three fronts. Firstly,an African telco buying into European incumbents is unheard of. Investment is usually in the opposite direction - Europe to Africa (e.g. France Telecom, Vodafone). Secondly, a wholesale operator with a three-way ownership is unique - the BICS jv was novel.. This model could realize the true value of the the wholesale function in the future. Thirdly, this makes the new version of BICS entity the leading wholesale operator in Africa.

Last month we published a paper titled The Changing Face of Telecoms Wholesale where we said (amongst other things) that wholesale operators are changing from national to trans regional and global entities, from standalone to collaborative partnership models, and adopting new business models out of commercial necessity. This deal ticks all three of these boxes. In a blog in September we also referred to the new "Scramble for Africa", so BICS including MTN is well placed in this race too. In short, we told you so.

This deal is a sign of the changing times we live in, and quite possibly a signpost of things to come. I am happy to discuss as ever.