On the Money News: In Brief

Mergers, Acquisitions and Financial Results

* Indian telecoms group Bharti Airtel has said it will spend USD100 million on network expansion in Malawi over the next three years, news agency Reuters reports. Earlier this month Bharti finalised the acquisition of the African assets of Kuwait-based Zain Group, in a deal valued at USD10.7 billion. The company has taken over Zain’s operations in 15 countries, including Malawi, Burkina Faso, Ghana, Kenya, Nigeria, Sierra Leone and Uganda. The Indian company expects to introduce the Airtel brand across its new units by October 2010. ‘We plan to invest USD100 million in Malawi in the next three years to improve coverage and reach out to Malawi's rural farmers ... and help the country's economy grow,’ chief executive officer of Bharti Africa, Manoj Kohli, told a news conference. Kohli added that Bharti plans to increase the number of its subscribers in Malawi from the current 2.5 million to seven million, although no date has been given for the company to reach its target.

*Telkom South Africa said fiscal 2010 full year profit fell because of increased competition from mobile operators and lower price increases. Revenue for the twelve months ended 31 March 2010 rose 0.7% to ZAR37.029 billion (USD4.887 billion), while EBITDA fell 15.2% from ZAR11.574 billion to ZAR9.809 billion. The earnings measure excludes a profit from the sale of its 50% stake in Vodacom Group and ZAR5.2 billion (USD698 million) write-down on its Nigerian unit. Low tariff increases, greater competition in its domestic market and Nigeria, coupled with high, ageing handset stocks and above-inflation wage increases, cut margins. Voice traffic volumes fell 9.3%. Capital expenditure fell by 44.2% to ZAR5.4 billion during the year.

*Zain Kenya has said its plans to start offering 3G phone services in Kenya are at a ‘very advanced stage’ now that the country has reduced the cost of a licence. The Communications Commission Kenya (CCK) last week slashed the cost of a 3G permit by 60% from USD25 million to USD10 million in a bid to boost competition. Safaricom, Kenya’s largest cellco by subscribers and owner of the country’s only 3G licence to date, plans to seek a rebate after it paid the higher amount in 2007 to acquire its permit.