World VoIP NewsBharti targets 100 million African subscribers by 2013 Bharti targets 100 million African subscribers by 2013

Bharti targets 100 million African subscribers by 2013


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India’s Bharti Airtel has announced that it has finalised the acquisition of the African assets of Kuwait-based Zain Group, with the deal valued at USD10.7 billion, the Economic Times reports.
Under the terms of the deal, first announced in March 2010, Bharti will pay USD8.3 billion upfront, followed by a further cash payment of USD700 million after one year, while it will also take over approximately USD1.7 billion of Zain’s debt. Commenting on the closure of the deal, Bharti chairman Sunil Mittal said: ‘We are delighted at the closure of this transformational deal for India and Bharti Airtel. The transaction is the largest ever cross-border deal in an emerging market and will result in combined revenues of about USD13 billion.’

Bharti has taken over Zain’s operations in 15 countries: Burkina Faso, Chad, Republic of Congo, Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia. The Kuwaiti company’s subsidiaries in Morocco and Sudan were not included in the sale. Zain has also agreed to licence its name and related trademarks to Bharti in all of the new countries for an interim period; the Airtel brand is expected to be introduced across its news units by October 2010.

Following the completion of the deal Bharti claims to have become the world’s fifth largest mobile group, with full commercial wireless operations in 19 countries – the 15 newly-acquired African units alongside India, Sri Lanka, Bangladesh and the Seychelles – and a customer base of around 180 million. Bharti has said it plans to expand aggressively in its new regions of operation, and has set a target of 100 million subscribers in Africa by 2012-13, while it expects the region to generate revenues of USD5 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) of USD2 billion by that date, TeleGeography reports.

Despite Bharti’s optimism over the deal, one hurdle has reportedly yet to be cleared. According to the Financial Times, South Africa’s Econet Wireless has said that a dispute over the ownership of Zain Nigeria remains unresolved, with the minority shareholder in the cellco claiming that Zain had ignored its first right of refusal regarding the deal. Econet has said that the matter is under consideration by a tribunal constituted under the United Nations Commission on International Trade Law and before the Lagos State High Court. ‘Econet Wireless can confirm that the dispute surrounding the ownership of the assets in Nigeria which form part of the transaction is not resolved and that Econet is not party to any agreement between Bharti Airtel and Zain,’ the South African group said.


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