Mr. Sunil Mittal is the most determined soul for Wireless African Safari 🙂 After having paid a premium in acquiring Warid Telecom, Bangladesh, this time his company is paying similar hefty premium [even RoE, RoCE are all low and not comparable to Airtel] to acquire the Wireless operations of Zain in Africa with operations in 16 countries including Nigeria, Congo and Tanzania which account for 52-55% of subscribers and revenues.
Even before I could get to my spreadsheets, ready food is on my table and the consensus amongst Analysts is Bharti is paying upto 40% premium to Zain for acquiring Wireless Business in Africa.
Bharti Airtel and Zain Wireless Africa Synergies – Lower procurement costs, replication of low cost business model, market penetration is similar to that of India and offers growth. However, the company will face a big operations overhaul and integrations challenge which is what the Airtel board has been looking for to retain its top talent and give them a bigger and global platform to operate on.
Like India, African market has wireless population penetration already close to 40%-levels. Can Airtel really grow from here ? History tells us that Mittal and his team are capable of coming with newer business models to ensure growth, but not without cut throat challenges like that of DoCoMo in India.
We believe funding will not be a constraint for Bharti Airtel . I’ll write on this in the next post on What is Transpiring Mr. Sunil Mittal for pushing beyond India.