(Business in Cameroon) - Mobile phone companies MTN and Orange are currently in negotiations with the Cameroonian government to lower the 75 billion FCFA fee each is required to pay to renew their 2G licensing which goes with 3G and 4G. The fees now deemed to be too high by the telecom companies were determined by the American firm Maas Telecom which the government had hired to conduct a financial assessment of the new licence.

The 75 billion FCFA per company set by Maas Telecom was determined by taking into account the companies’ current financial situation, their financial forecasts for the next ten years (the lifespan of the licence), and the renewal procedures used in other countries of Sub-Saharan Africa. 

According to Maas Telecom, with 3G, MTN Cameroon will make an estimated 3.571 trillion FCFA in profits over the next ten years with gross earnings before interest, taxes, depreciation and amortisation (EBITDA) amounting to 1.282 trillion. Orange Cameroon will make 2.147 trillion francs Cfa with an EBITDA of 750 billion FCFA.

Orange Cameroon is offering the sum of 40 billion FCFA for the new licence, while MTN is offering 35 billion FCFA.  In the event that both companies raise the argument that they have made infrastructural investments in an effort to lower the fees, the Minister of Postal Services and Telecommunications will maintain that MTN and Orange will not spend much: 18 billion FCFA at the most to modernise 900 telecom sites and update their network for 3G.

Viettel’s request

The nation’s 3^rd mobile phone service provider, Nexttel’s Viettel Cameroon had written to the Office of the President to extend its 3G monopoly. According to the contract signed with the government in December 2012, Viettel was to have two years of 3G exclusivity as of the signing date.

Viettel’s heads are seeking to convince the government that the monopoly should have been valid as of “the start of activity” in September 2014 instead of the signing of the contract. If approved, this would extend the monopoly to 2016. 

However, the request comes at a bad time for the Vietnamese company. Indeed, the 15-year contract deals, respectively signed on July 7, 1999 and February 15, 2000 signed by Orange and MTN with the Cameroonian government come to an end this year. Both are currently in the process of renegotiating their contracts with 3G included.