Monday, February 23, 2009

Zain aims to invest $1.5bn in Africa to grow its networks

February 23, 2009 - Business Report, By Thabiso Mochiko

ZAIN Africa, which is looking for more acquisitions across the continent, will invest $1.5 billion (R15 billion) in Africa to expand its existing networks.

Chris Gabriel, the chief executive of Zain Africa, said on Friday that there were two or three acquisitions in Africa that were nearly finalised, but he was coy about Zain's plans for South Africa. 

"We are looking at all the opportunities across Africa … There are many opportunities and if it makes sense we will look into it ," Gabriel said.

The company operates in 15 African countries, including Nigeria, Ghana and Sierra Leone. It has operations in seven Middle Eastern countries. 

Zain could have a lot of options to choose from in the country, as the communications regulator recently awarded network and service licences to more than 300 value added network operators, many of which would not afford to build their own networks. 

Zain raised $4.5 billion last year for acquisitions and the expansion and upgrading of existing networks. 

Gabriel predicted that there would be consolidation in the telecoms market in Africa and in the next five years there would only be about four operators serving the entire continent.

Zain aimed to increase its subscribers from 56.3 million at the end of September to 110 million by 2011. The company has invested $12 billion in Africa to date. 

Zain's competitors include MTN, which operates in 21 countries in Africa and the Middle East, and had more than 80.74 million subscribers at the end of September. MTN competes directly with Zain in Nigeria, one of the fastest growing markets in Africa. 

"We are not afraid of competition," said Gabriel. "We welcome rational competition as it brings innovations, which will benefit the economy. We don't replicate competitors; we have our own value proposition. We will stick to our strategy.

He said Zain would expand its One Network in new territories that it entered. 

One Network is a single roaming network across Zain's 22 operations in Africa and the Middle East. Customers pay the same roaming tariff with no excessive roaming charges and can top up their prepaid cards in any country where Zain operates. 

"With One Network, every Zain customer would enjoy the same services and quality," Gabriel said.