Bharti Airtel Acquires Telecom Seychelles

Telecoms

Zain Kenya's new owners, Bharti Airtel, is determined to expand their footprint in Africa by acquiring Telecom Seychelles Ltd at a cost of Sh4.9 billion. 

This means the Indian telecommunications firm is now in 16 African countries following its acquisition of Zain Africa's 15 operations, including Zain Kenya, for which the deal was closed in June for Sh856 billion. 

Mr Manoj Kohli, CEO (International) & Joint managing director, Bharti Airtel, said, "We are delighted at the addition of Seychelles to our Africa portfolio. These operations will benefit further by leveraging the efficiencies of scale of our African operations." 

When asked whether Bharti Airtel had presence in Seychelles, a company spokesperson clarified that the company never had any stake in Telecom Seychelles and it was only using its brand name. Now Bharti Airtel will acquire all stake from its promoters to make it part of African operations. 

Telecom Seychelles began operations in 1998 by launching mobile services. Today, it offers 3G mobile and integrated wireline services across the island nation under the Airtel brand and has over 57 per cent share of the mobile market. Bharti Airtel had over 183 million customers across its operations at the end of June 2010. 

Bharti plans replicate its minute factory model combined with a low-cost structure in Africa. It will work on infrastructure sharing and forge contracts on a network utilisation-based model, much like it does in India to improve productivity at its Africa operations. 

The company, facing tough competition in a crowded home market, is betting on opportunities in Africa where the mobile penetration level at 32 per cent is less than India's 50 per cent and there are fewer competitors. The Average Revenue Per User in the country remains low. 

In India, subscribers on average use 500 calling minutes monthly while Kenya lays claim to 40 minutes. In addition to voice services, Airtel provides broadband internet and digital television in its home market of India. The acquisition of Zain was Bharti Airtel's third attempt to enter the largely untapped African market after twice failing in merger talks with South African telecom major MTN. 

The firm recently appointed Ogilvy Africa BV to engineer its rebranding. It expects to launch its own brand in the 15 countries by end of October, according to people familiar with the matter.