While some U.S. cellular operators are teaming up to offer customers nationwide seamless coverage, one cellular operator with roots here in America is trying to make its mark in faraway, developing countries.
Luxembourg-based Millicom International Cellular, or MIC, was formed in 1990 out of a partnership between Millicom Inc., a New York-based cellular operator, and Industriforvaltnings AB Kinnevik, a diversified Swedish company.
Today, the company owns cellular licenses in 17 countries throughout the world, mostly in nations with developing economies. Landline telephone operations are practically nonexistent in MIC’s cellular markets. Telephone penetration in its Lithuania, Russia and Costa Rica markets reach only about 10 percent.
Other MIC markets, including those in the Philippines, Tanzania, India, Sri Lanka, Pakistan, Ghana, Kazakhstan, Guatemala and Colombia have fewer than 10 phones for each 100 people. By comparison, the United States has about 55 phones for every 100 people.
“We haven’t really focused on those markets (with sparse landline penetration), but we do seek smaller markets that offer good return on capital,” said Shelby Bryan, president and chief executive officer at MIC.
MIC markets worldwide have a population of about 341 million, and as of June, the cellular operator reported about 74,000 customers, excluding Sweden.
Stock analysts, including Alf Humphries of Hanifen, Imhoff Inc. in Denver, believe that subscriber numbers will grow, and that MIC likely will continue to acquire licenses in the next couple of years until most foreign opportunities vanish.
“We continue not only expansion of existing systems, but to look to other markets,” said Bryan, adding opportunities in Asia, Central America and North Africa are being considered.
Financing to acquire other markets could be raised from bank debt, corporate level debt or a sale of assets, Humphries said.
MIC has been known to sell certain cellular assets to finance the purchase and build-out of others. In the past, the company has sold cellular licenses in Mexico, Hong Kong and Chile to generate cash.
“We don’t have any reason to sell any more markets,” Bryan said. “Obviously we would consider it if somebody offered the right price.”
Bryan plans to resign as president of MIC effective Oct. 1, to form an investment partnership. He will remain at MIC as the company’s vice chairman. He will be replaced by Jeremy Metcalfe, currently executive vice president of MIC. Bryan said he intends to focus on forming investment partnerships to develop wireless operations in emerging markets worldwide.
Bryan founded Millicom Inc. in 1979. Last year, MIC acquired most of the assets of Millicom, and today Kinnevik owns about 41.5 percent of MIC, a Kinnevik investor owns 14 percent of the company, and three Millicom executives own nearly 10 percent of MIC.
The remaining percent was floated in a public offering earlier this year.
