Zain eyes Cape to Cairo coverage

Cape Town, 03 Sept 2008

Kuwaiti-owned cellular network operator Zain has invested $12 billion in its African operations and is investigating 10 potential acquisitions, says Zain Africa CEO Chris Gabriel.

Zain, which in 2005 bought 85% of Celtel, one of the continent's largest cellular operators, has revealed its ambition. Market speculation has been that Zain is eyeing SA's Telkom, or even possibly the country's third and smallest cellular operator, Cell C.

Gabriel, who addressed the World Telecoms Africa 2008 conference, in Cape Town, yesterday, said: "I will not go into the juicy specifics on the deals we are looking at, but we plan to have them completed by 2011."

He later told ITWeb that he would like to see "Cape to Cairo" coverage for Zain's One Network, which allows subscribers to roam freely in any country where the company operates a network.

Gabriel has been credited as being the architect behind Zain's "Accelerate, Consolidate and Engage" strategy, which sets the group the target of obtaining 70 million customers by 2011. Should it reach this goal, it will be placed within the top 10 telecommunications operators in the world.

He also told the conference that other international cellular operators from Europe and Asia were increasingly looking towards Africa for investment opportunities, but that this was expected to bring about consolidation.

"There are a number of cash cows looking at Africa and they are looking at what opportunities exist... However, I see consolidation happening among the big players, but there will be opportunities opening up for the smaller niche operators."

Gabriel said liberalisation of the African telecommunications markets was vital for continued growth and this underlying factor brought competition and explosive growth to the sector.

"Market liberalisation is not about privatisation only, but about opening up specific opportunities across the value chain."

Gabriel noted that the overall trend within the telecoms space is creating two levels of investment: consolidation and smaller direct investments across the value chain.

He said this meant network operators would allow for smaller companies to run various aspects of their networks, such as tower management, or allow for mobile virtual network operator alliances, and a number of other opportunities.