China positions itself for acquisitions in African telecoms sector

4 May 2006

London, United Kingdom, 04 May – China is positioning itself for a wave of acquisitions in the African telecommunications sector, in which it will compete with Vodacom, France Telecom, MTN, amongst others, the latest report from consultancy Balancing Act has said.

According to the author of the study, Russell Southwood, Portugal Telecom (PT), which holds stakes in Angola, Cape Verde, and Morocco, amongst other countries, does not have a coherent approach to the African market and “could within not very long be on the list of assets for sale.”

According to the Portuguese company, “any international strategy based on current assets is a fantasy which does not seem to be becoming a reality,” despite the current administration saying it plans to boost its presence on the African market.

The consultancy said that PT’s assets in Africa were an “assortment” with interests that “were largely stagnated,” in Mozambique, Sao Tome and Guinea Bissau, and more developed operations in Angola (Unitel), Morocco (Meditel) and Cape Verde.

According to Balancing Act, the African telecommunications market is going through “a dizzying succession of deals and acquisitions,” and even if many of these do not go ahead, ”the sector’s landscape will certainly look very different in three years’ time.”

Amongst the main world players interested in these assets is China Mobile, which, according to the Financial Times, offered US$4 billion for Millicom, which is listed on the US market and which has interests in Chad, Ghana, Mauritius, Senegal, Sierra Leon and Tanzania.

The Chinese company is expected to face “tight competition” the study added, namely from Egyptian operator Orascom and Kuwait’s MTC.

Chinese telecommunications equipment manufacturers ZTE and Huawei are also moving into the African market by buying operators, the study said.

ZTE’s offer for Niger’s Sonatel accepted and was recently said to be close to acquiring Zambia’s Zamtel.

Hong Kong’s Hutchinson acquired Ghana’s Kasapa, and taking into consideration this operator’s performance “will look to new acquisitions on the continent.”

Amongst the mobile operators for sale are Camaroon’s Camtel, Gabon Telecom, Gamtel of Gambia, Ghana Telecom, Nigeria’s Nitel and Mali’s Sotelma.

Mozambique’s TDM and Zamtel fo Zambia “are in a stage of the political cycle in which privatization is not on the agenda, but could at any time become the order of the day.” (macauhub)