Telecom Targets Africa

There’s only so much business in the West, especially where players like Apple, BlackBerry and TMobile and Nokia dominate the mobile market. If you have any questions about this, just ask Helio. Thus, the latest trend in mobile is spurring growth by entering emerging economies. There’s a proven need but how is that need best monetized? It turns out that there is a scramble to answer just that question by entering the African market:

In the latest show of interest, private-equity firms Apax Partners Worldwide LLP, Madison Dearborn Partners LLC and TA Associates Inc. agreed to buy a €1.1 billion ($1.7 billion) stake in Weather Investments, a holding company owned by Egyptian billionaire Naguib Sawiris. Among other assets, Weather holds a controlling stake in Orascom Telecom Holding SAE, one of the biggest telecom outfits in subscriber terms in Africa and the Middle East.

That continued a flurry of deal-making. On Monday, news broke that South African businessman Tokyo Sexwale is leading a consortium, including U.S. hedge fund Och-Ziff Capital Management LLC, exploring an acquisition of Telkom SA Ltd., the continent’s largest fixed-line operator in terms of subscribers and revenue. The same day, Vodafone Group PLC, the world’s largest mobile operator in revenue terms, said it wanted to boost its stake in a joint mobile-phone venture with Telkom. Last month, an Indian suitor walked away from merger talks with Africa’s largest mobile carrier, MTN Group Ltd., only to be replaced by another Indian company.

The fact of the matter is African markets have been largely ignored in the past because of the the fear that reports of an unexpected civil war or conflict would send stocks into a nosedive. That was the case but with the Western markets reeling from a pending recession in America and skyrocketing oil prices, the only really risky move is to not take any risks at all! Meanwhile emerging markets are progressing quite well with new opportunities springing up every day:

Excitement over Africa isn’t restricted to big players. Thousands of lower- and middle-class Kenyans lined up at banks and brokerage firms last month hoping to grab shares in the initial public offering of domestic carrier Safaricom Ltd.

Those savvy enough to enter African markets early are the ones that stand to gain the most, meanwhile African nations continue to prosper as their emerging markets create millions of ‘new customers‘.

Read more about the Telecom industry’s push into Africa at the Wallstreet Journal.