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Africa’s telecoms field set for consolidation

17 марта 2009

Africa’s telecommunications sector will undergo a wave of consolidation in the next year or two as new arrivals and established players alike struggle to maintain their margins in increasingly crowded markets, says Phuthuma Nhleko, chief executive of MTN, the continent’s biggest mobile operator.

Telecoms investment has poured into a continent where mobile penetration, at 35 per cent, is far lower than in all other regions.

However, all but the earliest arrivals in most countries have struggled to make inroads, despite often having to build infrastructure from scratch.

For MTN and its half-dozen international rivals, Mr Nhleko foresees a showdown that will lead to “fewer players with larger footprint, bigger balance sheets, more economies of scale”.

2008, in particular, we’ve seen more players coming into small markets that have got three, four, five players,” Mr Nhleko told the Financial Times in an interview at MTN’s Johannesburg headquarters. “It is our view that in the medium term some of the players may have a challenge in sustaining their business model.”

The chief executive – one of Africa’s most influential businessmen – was at pains to say no deals were under way.

However, following the collapse of merger talks last year with India’s mobile groups, Bharti Airtel and Reliance Communications, Mr Nhleko is under pressure to prolong the whistlestop expansion of his six-year tenure.

Mobile banking heads for new frontiers

Africa’s biggest mobile phone operator on Monday launched what it hopes will become the world’s largest mobile banking service, Tom Burgis reports.

MTN’s new scheme, which follows the success of a similar Kenyan venture by Vodafone of the UK and local operator Safaricom, accelerates the provision of basic financial services to people long considered “unbankable”. It uses the popularity of mobile phones to offset the absence of bank branches.

Subscribers in an initial five countries – Uganda, Ghana, Cameroon, Nigeria and Ivory Coast – will be able to deposit, transfer and withdraw funds on handsets.

The Johannesburg-based group is using software from Fundamo, the world’s largest specialist mobile financial services company, in a deal worth $10m.

In a sign of the potential obstacles mobile companies face as they seek to wrest some banking services from financial institutions, MTN has also entered partnerships with local banks in each territory in order to meet central banks’ requirements.

It will generate revenue by charging transaction fees.

MTN is also running pilots in other countries.

The group last year expanded its subscriber base by 48 per cent to 90m in 21 countries from Ghana to Yemen, generating a 44 per cent rise in profits to R17bn ($1.7bn). But it predicts subscriber growth will slow to 25 per cent in 2009. 

Mr Nhleko acknowledges that “to maintain our growth, somehow we need to try and find larger markets”. But he appears focused on African opportunities, such as long-awaited new licences in fast-growing Angola and Ethiopia, one of the few countries that maintains a state-run monopoly.

Fitch, the credit ratings agency, recently predicted “a wave of major consolidations” in which “existing telecoms players have a significant advantage over new entrants given their familiarity with the continent’s challenging technological and regulatory environment”.

MTN’s balance sheet shows it is poised to pounce. It has resisted pressure to increase pay-outs to shareholders and whittled down the group’s ratio of debt to earnings, leaving it with R27bn in cash as of December 31. Even as the group plans another year of record capital expenditure, the chief executive says it is fair to regard that money as a “war chest”.

The Fitch report says Nigeria would be “a principal battleground”.

MTN will spend R12bn of its R37.7bn spending programme in Nigeria to bolster its position as the market leader. But there and across the continent, it faces increased competition.

Zain and Etisalat have been building African empires from the Gulf. France Telecom is broadening its horizons beyond Francophone west Africa. South Africa’s state-owned Telkom has bought a Nigerian operator.

The UK’s Vodafone is spending $2.5bn to secure a controlling stake in Johannesburg-based Vodacom as a vehicle for further African expansion.

Mr Nhleko acknowledges that consolidation is “not an easy thing to do, which is why I’ve spoken about it for three years and nothing has happened”. He believes mobile companies are better placed than most to weather the economic storm. “Whether you are in Sweden or you are in Swaziland or Rwanda, the mobile phone has become almost an essential service.”


Источник: Financial Times

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