Arab world and India: investments to flow in both directions?

Towards the end of February, I asked here whether 2009 would be the year that a prominent Indian mobile operator will make major moves on the world stage. I noted that the cellco I had in mind was facing a number of competitive pressures on the home front that might soon drive international expansion.

The operator I had in mind was Bharti Airtel, the country's mobile market leader (with 26.24% of the subscriptions on a highly fragmented market, according to WCIS). To date, the company's only significant foray beyond India has been the recent establishment of a subsidiary in Sri Lanka. In the February discussion, I noted that Bharti Airtel had failed in a previous bid to acquire South Africa's MTN. With no particular evidence to support it, I'd developed the gut feeling that if the big Indian cellco were to make a bold move into new territories, somewhere in Africa would be the likely target.

I was surprised, therefore, to read in a recent TotalTelcom article that a quite different Indian operator has turned its gaze to the African continent.

Apparently, state-owned BSNL (Bharat Sanchar Nigam Ltd.), India's oldest and largest communication service provider is likely to get involved in a bid for a telecoms licence in Tunisia. The operator's partner in the proposed bid is consultancy firm TCIL, a fellow state sector enterprise.

The TotalTelecom article contends that BSNL sees overseas expansion as an opportunity to increase revenues, having lagged behind private sector operators on the domestic market. The Tunisian licence, says the article, is of the unified variety, enabling a new entrant to offer mobile and fixed-line services.

A degree of skepticism is reported, with Jithesh K. Gopi, Head of Research at Bahrain-based investment bank Securities & Investment Co. B.S.C. saying "with the current level of penetration [in Tunisia], it won't be an easy market for a new entrant."

In the African context, Tunisia does have a high rate of mobile penetration - currently at 82.73% according to the World Cellular Information Service (vs. 40.16% for the continent as a whole).

In the cellular arena, any new entrant will be seeking to shake up a duopoly situation. The mobile market is presently split very evenly between state-owned Tunisie Telecom and Tunisiana.

My understanding is that it will become known quite soon whether BSNL will take the plunge in the possibly quite challenging Tunisian market.

In the meantime, I spotted news of monies being set to flow in the opposite direction, i.e from the Arab world into India.

I have, of late, been taking advantage of an excellent newsletter from Blycroft Publishing - Africa & Middle East Telecoms Week. The latest edition carries an article about the UAE's Etisalat, currently a minority stakeholder in Swan Telecom, planning to invest a further USD 1 billion in India's telecoms sector. The Etisalat Chairman is quoted as revealing that the company's investments in India "would complement its investments in other countries having growth potential, such as Pakistan, Afghanistan and Indonesia" and that "the current economic meltdown has provided an opportune time for investing in different areas, and Etisalat is ready to exploit the situation and bolster its global presence." For some time now, I've held the belief that the current downturn is set to stimulate acquisition activity on the part of well-funded telecoms groups from the Middle East. This latest tip about Etisalat's plans seems to be in line with that.

Arab world and India: investments to flow in both directions?