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Buyout time for the big guys

By Nicholas Norbrook
Posted on Wednesday, 29 July 2009 01:42

Buyout time for the big guys

Telecoms have been the undisputed success story in Africa over the last few years, kickstarting the decade of growth that the continent experienced before the world economy derailed. For some, seeing the huge returns made by cellphone operator pioneers, it was proof of Africa’s macrostabilisation. Despite the ‘political risk’ tag so often slapped on, here were investments that were paying off from Dakar to Khartoum, Cairo to Johannesburg.

For others the telecoms boom is a sign that the informal economy is strong enough to sustain a tertiary sector in services, something that nobody previously had thought possible. Africans, so the thinking went, don’t have money to spend on phone calls. Now that the pay-as-you-go business case has been made by the stellar profits of the telecoms operators, other providers, from health to banking, are seeing Africa for what it really is: a market of 900 million people, all willing and able to pay for services. All you need is a smart way of accessing the bottom of the pyramid.

Though some operators have reported a slowdown in earnings in recent months, for others around the globe the credit crunch does not appear to have registered – certainly not slowing down their appetite for expansion.

The biggest story has been the talk of Kuwaiti operator Zain trying to offload its Africa operations, known previously as Celtel. Frontrunner in that race is Vivendi, a telecommunications and media company that operates a cellular licence in France called SFR among other things. Were Vivendi to be successful, it would be the second major French telecoms operator in Africa alongside Orange Telecom.

Africa’s other titan is the subject of the other major bid of the middle of the year. After the speculation last year about which Indian telecoms company would eventually buy South African giant MTN, Bharti has re-ignited its bid to escape slow saturation in the Indian market. Africa’s largest operator would be a prize indeed, the sweet spots being the huge Nigerian market (MTN Nigeria has been the highest earning subsidiary for the group) and the more developed South African market, which is already moving quickly into the data space, providing mobile internet access with dongles plugged into computers on the go.

Internet is certainly coming to Africa through mobile connectivity. This is being boosted by the arrival of several different undersea fibreoptic links to Asia and Europe. First on the scene, Seacom’s 1.28 tbps cable is set to begin service in July 2009, bringing significantly cheaper and quicker internet access to East and Southern Africa.

Currently much of Kenya’s internet arrives over satellite signals. In February, Seacom CEO Brian Herlihy was promising that for a wholesale connection providing 9.6gbps of bandwidth, the rate would be 267 rand/Mb/month. That compares more than favourably with satellite (230 000 rand/Mb/month) and the SAT3 cable (3,500-11,000 rand/Mb/month).

TELECOMS RANKING

Below is a ranking of the continent’s largest telecoms companies from our annual list of the Top 500 Companies in Africa. Figures are based on firms’ 2007 performance.

Rank 08

Rank 07

Company name

Country

Sector

Turnover (Thds $)

Turnover change

Net profits

5

8

MTN GROUP

SOUTH AFRICA

TELECOMS

10 829 117

46,04%

1 764 164

7

7

TELKOM

SOUTH AFRICA

TELECOMS

8 332 994

12,32%

1 209 865

9

11

VODACOM GROUP

SOUTH AFRICA

TELECOMS

7 132 723

20,62%

1 178 123

15

VODACOM SOUTH AFRICA

SOUTH AFRICA

TELECOMS

6 392 843

1 172 008

20

18

ORASCOM TELECOM

EGYPT

TELECOMS

4 905 049

9,80%

2 175 528

25

24

MTN SOUTH AFRICA

SOUTH AFRICA

TELECOMS

4 177 971

18,28%

819 013

31

35

MAROC TÉLÉCOM

MOROCCO

TELECOMS

3 604 489

34,04%

ND

41

48

MTN NIGERIA

NIGERIA

TELECOMS

2 998 013

40,00%

629 953

64

63

TELECOM EGYPT

EGYPT

TELECOMS

1 821 551

12,10%

435 226

65

66

ORASCOM TÉLÉCOM ALGÉRIE

ALGERIA

TELECOMS

1 755 856

14,67%

ND

77

83

MOBINIL

EGYPT

TELECOMS

1 494 783

33,21%

332 734

87

79

ALGÉRIE TÉLÉCOM

ALGERIA

TELECOMS

1 307 040

10,59%

15 560

101

ZAIN NIGERIA (EX-CELTEL)

NIGERIA

TELECOMS

1 171 900

83 200

104

111

SOC. NAT. DE TÉLÉCOM. DU SÉNÉGAL

SENEGAL

TELECOMS

1 132 979

37,51%

361 906

111

88

VODAFONE EGYPT TELECOMMS*

EGYPT

TELECOMS

1 048 579

300 728

118

129

SAFARICOM

KENYA

TELECOMS

970 858

41,60%

219 154

129

104

TUNISIE TÉLÉCOM*

TUNISIA

TELECOMS

884 793

126 888

145

ZAIN SUDAN (EX-SUD MOBILE)

SUDAN

TELECOMS

792 500

263 200

176

156

MÉDI TÉLÉCOM

MOROCCO

TELECOMS

644 912

16,96%

ND

183

276

SUDANESE TELECOM CO.

SUDAN

TELECOMS

621 103

150,73%

216 394

187

MTN GHANA

GHANA

TELECOMS

599 306

137 390

197

282

TUNISIANA

TUNISIA

TELECOMS

558 616

133,97%

ND

228

199

ORANGE CÔTE D’IVOIRE

CÔTE D IVOIRE

TELECOMS

424 267

10,27%

78 600

237

RAYA HOLDING FOR TELECOMM.

EGYPT

ELECTRICAL

414 314

17 309

238

270

SONATEL MOBILES

SENEGAL

TELECOMS

408 671

59,73%

ND

258

259

WATANIYA TELECOM ALGÉRIE

ALGERIA

TELECOMS

371 126

35,52%

-35 220

260

241

MTN CAMEROUN

CAMEROON

TELECOMS

367 756

23,12%

77 874

268

275

VODACOM TANZANIA

TANZANIA

TELECOMS

348 584

40,25%

46 562

278

258

VODACOM CONGO

DR CONGO

TELECOMS

340 012

23,57%

11 874

279

263

MTN CÔTE D’IVOIRE

CÔTE D IVOIRE

TELECOMS

338 886

27,39%

58 776

303

426

ORANGE MALI

MALI

TELECOMS

308 153

158 636

306

MTN UGANDA

UGANDA

TELECOMS

300 838

54 038

311

ZAIN RDC (EX-CELTEL)

DR CONGO

TELECOMS

296 700

25 900

318

292

ORANGE CAMEROUN

CAMEROON

TELECOMS

292 600

29,47%

ND

336

297

CÔTE D’IVOIRE TÉLÉCOM

CÔTE D IVOIRE

TELECOMS

265 983

21,66%

18 054

337

ZAIN TANZANIE (EX-CELTEL)

TANZANIA

TELECOMS

265 000

52 100

347

348

NET 1 UEPS TECHNOLOGIES

SOUTH AFRICA

TELECOMS

254 056

86 695

348

390

PINNACLE TECHNOLOGY HOLDINGS

SOUTH AFRICA

TELECOMS

254 031

66,62%

11 152

350

ZAIN ZAMBIE (EX-CELTEL)

ZAMBIA

TELECOMS

252 100

58 000

364

MTN SOUDAN

SUDAN

TELECOMS

238 509

28 278

367

338

MAURITIUS TELECOM

MAURITIUS

TELECOMS

234 921

27,93%

ND

368

ZAIN GABON (EX-CELTEL)

GABON

TELECOMS

233 100

52 800

383

MCEL MOÇAMBIQUE

MOZAMBIQUE

TELECOMS

223 122

13 322

389

ZAIN CONGO (EX-CELTEL)

CONGO

TELECOMS

211 300

66 100

403

353

DATACENTRIX HOLDINGS

SOUTH AFRICA

TELECOMS

199 419

15,45%

15 081

412

ZAIN KENYA (EX-CELTEL)

KENYA

TELECOMS

194 300

-21 700

435

395

OFF. NAT. DES TÉLÉCOMMUNICATIONS

BURKINA FASO

TELECOMS

175 164

20,99%

14 880

454

TOGO TÉLÉCOM

TOGO

TELECOMS

163 788

40 775

460

388

TELECOM NAMIBIA

NAMIBIA

TELECOMS

158 848

2,91%

-4 288

462

438

SOC. DES TÉLÉCOMS. DU MALI

MALI

TELECOMS

157 150

31,94%

ND

476

VOX TELECOM

SOUTH AFRICA

TELECOMS

146 586

8 130

498

MAURITEL

MAURITANIE

TELECOMS

139 168

ND

2007 RESULTS IN THOUSANDS OF DOLLARS – *IN ITALICS 2006 RESULTS – ND: NO DATA

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