The African telecom market is currently undergoing transformation following investments in the telecom sector by international telecom companies that have brought stiff competition in the sector, which is negatively affecting profits of less innovative African operators that are not well-funded.

Telecom Namibia is, meanwhile, pulling out of Angolan fixed operator Mundo Startel, ending the Namibian government's bid to expand the operations of the state-owned telecom company into regional markets.

"Prohibitive restrictions, high taxations and lack of locally sourced, skilled workers raise the cost of running the communication businesses for African operators expanding into other countries," Collins Chinyama, president of Computer Society of Zambia, said in an interview.

African telecom analysts believe that other major operators are also feeling the strain and may divest regional assets to focus on their local markets.

Telecom Namibia, the country's terrestrial telephone operator, invested about N$100 million (US$14 million) for a 48 percent stake in Mundo Startel as part of the company's entry into African telecom markets. The partnership between Namibia Telecom and Mundo Startel was expected to result in the deployment of 100,000 wireless lines providing voice and high-speed data services throughout Angola's capital, Luanda, before extending the service throughout the country.