My reporting of last week's speculation about Zain selling its entire African portfolio certainly generated a decent number of hits for this blog. I daresay anyone else who blogged about it saw a spike in visitor numbers.
The chitchat on this topic continues this week, with Cellular News feeling around for an explanation for why Vivendi might have been named as a possible buyer, while conceding that we still only seem to have a single report from a Nigerian newspaper as a source for this (non?) story. Undeterred by this, the Cellular News folks wonder whether a Vivendi bid might have something to do with Vodafone eyeing Zain's African assets. The reasoning for this is as follows:
"Vivendi currently owns a 56% stake in French mobile network, SFR - with Vodafone holding the remainder. The joint shareholding in SFR will raise speculation that Vodafone is involved in the talks through its South African Vodacom subsidiary."
Last week, when reports began to surface of a "French company" being involved in all of this crazy hullabaloo, Vivendi was not the first name that sprang to my lips. Instead, I quickly voiced the thought: it has to be Orange. Several days later, with the scribes at Cellular News trying to find reasons for why Vodafone might be the real stalking horse, I am, frankly, none the wiser.
So I looked to my former employers for some inspiration, noting that the good people at telecoms.com have had the time to do a bit of asking around. None of this, however, visits the issue of who might be in the mix to pick up Zain's African operations. Instead the focus is on, why the hell the Kuwait-headquartered would be looking to get out of Africa, a move which the telecoms.com editoral team describe as going "against pretty much every noise the firm has ever made about its strategic ambitions", which is pretty much in line with the thoughts I articulated myself here last week.
The telecoms.com guys asked one of their Informa Telecoms & Media colleagues for her view, quizzing Thecla Mbongue, the firm's senior analyst covering Africa. Thecla was reported to be "bemused" but did reveal that she had picked up on some grumbling from Zain executives about governance problems in certain African countries. This was communicated to Thecla at a "recent ITM event". I guess that must have been the East Africa Com conference in Nairobi back in April, which I attended myself and where I bumped into Thecla and other ITM market watchers. I always seem to miss the real intrigue at these get-togethers. While Thecla was getting useful inside info from Zain-ites, I was merely walking the halls trying to sell my wares.
In last week's chat with telecoms.com, Thecla also suggested "that perhaps the firm is struggling with the low margins on offer in many of its African markets."
Other analysts, according to the telecoms.com article, are divided. One unnamed source claimed that some kind of sale is "extremely probable" because "Zain is highly leveraged and financially constrained"; Angel Dobardziev of Ovum, meanwhile, told telecoms.com that any sale is unlikely because "Africa is very strategic to Zain" and "it doesn’t look like it needs to make the sale" because although "Zain does have a high level of debt... it also has a lot of cash and, if you look at current asset prices, this is not a great time for a seller."
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