If Kuwait telecommunications company Zain Group sells its African operations to a large company, MTN could face stiff competition on the continent.
Media reports have indicated Zain is in talks with several companies to sell Celtel, its African arm. One contender is said to be a French company, which is reported to be in talks worth $12 billion.
Chris Gilmour, analyst at Absa Investments, says that, if Celtel is sold to a company prepared to put money behind it to take advantage of pending increases in broadband, MTN could face competition in the data arena.
However, should the $23 billion deal with Bharti go head, MTN would also have access to a funding source as a result of the combined entity`s large size, which would "make international investors sit up and take notice".
Gilmour says that for companies to expand on the continent, they would require access to funding to roll-out infrastructure and make sure towers were always connected to electricity.
For sale?
This week, reports from publications such as Next indicated the Zain Group was looking to sell Celtel. But spokesman Emeka Oparah was quoted as saying: "I am not aware of the development. I only saw it as an alert from Google today, so I cannot say anything on it right now."
Business Maktoob reports that bids have come in from companies in the US, Europe, China and India. It says Zain is studying the offers and that the company could take up to a month to decide.
Zain is the fourth largest mobile network in the world in terms of geographical footprint, with commercial presence in 24 countries spread across the Middle East and Africa, providing mobile voice and data services to 64.7 million active customers as of the end of March.
It operates in Bahrain, Burkina Faso, Chad, Congo, the Democratic Republic of the Congo, Gabon, Ghana, Iraq, Jordan, Kenya, Kuwait, Malawi, Madagascar, Niger, Nigeria, Saudi Arabia, Sierra Leone, Sudan, Tanzania, Uganda and Zambia. In Lebanon, the company manages the network on behalf of the government, and operates as mtc-touch. In Morocco, Zain in a joint venture owns 31% of Wana Telecom.
In May, Zain entered into a merger agreement with Palestinian Telecommunication Company that will result in Zain attaining 56.5% of the company, subjective to regulatory approvals.
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