African mobile M&A market seen quiet in 2012 - experts.

By bne IntelliNews January 11, 2012
The African merger and acquisition market (M&A) for mobile operators is expected to be quiet this year, with a bleak outlook for significant or highly speculative transactions, Business Day reported, quoting local experts. Higher M&A activity may be observed in highly competitive markets such as Ghana, Uganda and Cote dIvoire, as there are many smaller players, which might consolidate. According to Norton Rose lawyer Oliver Stacey, there are several factors, including a surge in demand for broadband services, competition between mobile operators and a desire to expand in emerging economies, which could lead to increased M&A activity in the African ICT sector. He added that mobile operators aim to consolidate in crowded markets to achieve synergies, economies of scale and improved performance, so there are chances that big operators buy small ones. Ziyad Joosub, telecom and media analyst at JP Morgan in Johannesburg, considers that potential greenfield opportunities exist in Malawi or Ethiopia, but the regulatory hurdles in these markets remain high. He said big operators were reaching mature growth levels and were past their peak capital expenditure levels. According to Joosub, the possibility that Indian-based mobile operator Bharti Airtel, which provides mobile services in 16 African countries, would enter the South African market was very low. Media reports from India last week said Bharti Airtel was considering entering South Africa and Cameroon as it planned to roll out data services on the continent. According to Norton Rose, the next trend on the African ICT market would most likely be towards high-margin services, such as virtual healthcare, smart mobility and cloud computing.

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