Dubai Firm to Invest in South Africa’s Telecom Market

Mergers, Acquisitions and Financial Results

Dubai-based telecoms advisory firm Delta Partners has boosted plans to invest in SA by launching an $80m equity fund. It is now seeking telecoms players in which to invest that R825m, with the typical deal worth between $5m and $15m. It expects to make one or two investments in SA in the next six months before turning its attention to the rest of Africa.

Delta Partners is the largest telecoms advisory and investment firm in Africa and the Middle East, and opened regional headquarters in Johannesburg in July. It would invest in different types of companies, which could include cable layers or infrastructure suppliers, said managing partner Kristoff Puelinckx last week. "That may include established telecoms players, new industry entrants, alternative telecom operators and industry suppliers that have proven track-records, solid business models and existing cash flows."

Investments would not only be in the form of cash, as Delta Partners wanted to be involved with the operations at board level and to use its experience to help grow the business to ensure it achieved the return it expected.

Puelinckx said there was an unprecedented amount of development taking place that would increase Africa's bandwidth substantially over the next five to 10 years.

"With the continued liberalisation of the local and regional telecoms markets, more players are expected to enter this market, giving rise to increased competition and more affordable access to communications technology for businesses and consumers," he said.

"There is substantial investment being made into laying cables and providing infrastructure to enable more bandwidth across Africa. But we are yet to see the boom in this region's broadband market."

Delta Partners operates in 25 countries and has invested in north Africa, the Middle East and Russia.

Business Day