Egypt, Elsewedy review progress on Ain Sokhna phosphate complex    US employment cost index 3.6% up in year to June 2025    Egypt welcomes Canada, Malta's decision to recognise Palestinian state    Pakistan says successfully concluded 'landmark trade deal' with US    Sterling set for sharpest monthly drop since 2022    Egypt, Brazil sign deal to boost pharmaceutical cooperation    Modon Holding posts AED 2.1bn net profit in H1 2025    Egypt's Electricity Ministry says new power cable for Giza area operational    Egypt's Al-Sisi, Italian defence minister discuss Gaza, security cooperation    Egypt's FM discusses Gaza, Nile dam with US senators    Aid airdrops intensify as famine deepens in Gaza amid mounting international criticism    Egypt exports first high-tech potato seeds to Uzbekistan after opening market    Health minister showcases AI's impact on healthcare at Huawei Cloud Summit    On anti-trafficking day, Egypt's PM calls fight a 'moral and humanitarian duty'    Egypt strengthens healthcare partnerships to enhance maternity, multiple sclerosis, and stroke care    Egypt keeps Gaza aid flowing, total tops 533,000 tons: minister    Indian Embassy to launch cultural festival in Assiut, film fest in Cairo    Egyptian aid convoy heads toward Gaza as humanitarian crisis deepens    Culture minister launches national plan to revive film industry, modernise cinematic assets    I won't trade my identity to please market: Douzi    Sisi sends letter to Nigerian president affirming strategic ties    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt, Somalia discuss closer environmental cooperation    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Emerging market telco needs skill
Published in The Egyptian Gazette on 11 - 06 - 2010

Potential buyers need to pay attention to detail and keep their egos in check to prevent regulatory and political hurdles derailing the richest-ever phase of emerging markets telecom consolidation.
Last-minute hitches have already thwarted South Africa's MTN (MTNJ.J) and India's Bharti (BRTI.BO), two companies seeking to bulk up in developing countries.
Announced takeovers of emerging markets telecom companies have soared to $64.6 billion so far this year - more than a third higher than the previous record of $39.4 billion in the first six months of 2006.
Companies are looking to increase their footprint in Africa, Asia and Latin America as growth at home slows.
Yet the failure of talks this week between MTN and Egypt's Orascom Telecom (ORTE.CA) was the latest reminder that these deals call for diplomatic finesse as well as financial muscle.
"It is natural evolution of the kind we have seen happening in Europe and the US.... Bharti and MTN are looking to become emerging market titans," said Nick Jotischky of research firm Informa Telecoms & Media, adding that the two had deep pockets and sufficient scale necessary for such a move.
Both companies have had their ambitions halted recently by regulatory and political intervention, however.
MTN's bid to become the world's third largest mobile player and grow beyond its core markets of South Africa, Nigeria and Iran collapsed when the Algerian government stepped in to buy Orascom's money-spinning Algerian unit.
Bharti has just become the world's fifth biggest cellphone company by subscribers after buying Zain's (ZAIN.KW) African operations for $9 billion - but only after two earlier attempts at a tie-up with MTN failed.
The last attempt flopped in September, because the South African Government was unwilling to allow a flagship company to lose its national character.
"Companies need to work harder in private to get these deals done," said an investment banker familiar with emerging market telecom deals who asked not to be identified.
Political risk in these deals was considerable and should be addressed right from the start, the banker said, whereas some recent situations suggested work on wooing politicians and regulators had been left until too late.
"The egos often think they are more important than the country, when in fact they are lower than the politicians who hold all the power," said the banker.
With experts predicting there is a range of telecom assets for sale worth up to $30 billion in the Middle East and North Africa alone, companies have good reasons to perfect their approach to regulatory and political due diligence.
Etisalat (ETEL.AD), China Mobile (0941.HK), India's Essar, Reliance (RLCM.BO), France Telecom (FTE.PA), Qtel (QTEL.QA), Batelco BTEL.BH, Singtel (STEL.SI), Vodafone (VOD.L) and Saudi Telecom (7010.SE) are all named as potential acquirers.
European players are unlikely to play major roles in these upcoming deals because it is more difficult for them to currently finance any acquisitions, Informa's Jotischky said, singling out Etisalat as another company looking to become an emerging markets powerhouse.
The Abu Dhabi operator has said it is looking at options in India, including taking a 26-per cent stake in number two mobile operator Reliance.
Debt-burdened Reliance has said it wants to divest the shareholding to strategic or private equity investors, a stake worth around $2 billion at current market levels.
Bankers say the process is nowhere near as advanced as public perception of the matter and are skeptical that a sale will ensue. With the collapse of its deal with Orascom, MTN may now turn again to Reliance, with which it flirted in 2008.
Latin America, dominated by Carlos Slim's America Movil (AMXL.MX) and Telefonica (TEF.MC) of Spain, could be the next frontier for would-be emerging market titans.
"I wouldn't be surprised if in a few years we'll be speaking about Bharti's aims in Latin America," Jotischky said.


Clic here to read the story from its source.