India’s largest mobile operator, Bharti Airtel, said on Tuesday it had
 sealed a US$10,7bn deal to buy Zain’s African assets, 
ranking it among the world’s top five cellular players.

With the acquisition, the second-largest foreign takeover in
 Indian corporate history, Bharti will acquire Kuwait-based 
Zain’s African mobile services operations in 15 countries, 
including Kenya, Nigeria and Tanzania.

“This agreement is a landmark for the global telecoms industry
 and a game changer for Bharti,” company chairman and founder Sunil
 Bharti Mittal said in an e-mailed statement, calling Africa “the
 continent of hope and opportunity”.

Bharti “will be transformed into a truly global telecoms company
 with operations across 18 countries, fulfilling our vision of
 building a world-class multinational”, the 52-year-old businessman 
added.

The acquisition finally realises a dream by the billionaire 
tycoon to gain a foothold in Africa, one of the world’s least developed telephone markets, after two failed attempts to acquire
 SA mobile giant MTN.

“We are excited at the growth opportunities in Africa,” Mittal
 said.

The number of people owning phones in the countries where Zain 
operates stands at just 32 out of every 100, compared with India’s 
51.

Mittal, a self-confessed business “junkie” always hungering for 
the next deal, is looking to expand foreign revenues amid a savage 
price war at home.

But analysts say Mittal, who signed the deal at Zain Africa BV’s
 headquarters in Amsterdam, will need all his entrepreneurial 
chutzpah to turn around Zain’s loss-making African operations.

In Nigeria, for instance, where mobile phone ownership is 
growing most rapidly, Zain has been losing subscribers to rivals.
Also, Mittal will be entering “not just one market but 15
 markets”, said Romal Shetty, telecommunications head at global 
consultancy KPMG’s India unit.

“You can’t play a single strategy for all of them,” he said. “He
 has a lot of work ahead.”

Bharti, 32% owned by Singapore Telecommunications, said
 in the statement it had “entered into a legally binding definitive 
agreement with Zain Group to acquire Zain Africa BV.”.

Mittal said that the company was betting that the strength of
 its brand, “coupled with our unique business model, will allow us to
 unlock the potential of these emerging markets”.

The trick for Bharti, which pioneered low-cost telecoms in
 India, will be to bring down Zain’s high cost base and win 
subscribers, say analysts — and to get subscribers to talk more
 using lower tariffs.

With this purchase, the second most costly foreign takeover by
 an Indian company since Tata Steel bought Anglo-Dutch steel
 producer Corus for $12,2bn in 2007, Bharti’s
 global customer base will increase to around 179m.

Under the agreement, Bharti will acquire most of Zain’s
 African mobile services with a total customer base of over 42m out of which Zain is a market leader in 10 and second in
 four others.

With the acquisition, which does not include Zain’s networks in
 Morocco or Sudan, Bharti said it would be the world’s
 fifth-largest wireless company by customers.

“We are delighted the African telecoms asset that we so
 assiduously built is becoming part of such a committed and
 reputable telecoms powerhouse,” Zain Group chairman Asaad Al Banwan
said in the statement.

Bharti launched mobile services in India in 1995, Sri Lanka in
 2009 and acquired Warid in Bangladesh in January 2010.  — Sapa-AFP

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