Afrique Occidentale & Centrale Com: De retour au Sénégal par demande générale

The Zain-Bharti transaction: How will West African mobile markets be affected?

Mais non! DevelopingTelecomsWatch has not become a francophone blog. The frenchified title of today's offering is in honour of the fact that a noted West African telecoms conference is, after two years in Nigeria, to be hosted in Senegal in June.

Geopolitically, West Africa is defined by the UN as consisting of: Benin, Burkina Faso, Côte d'Ivoire, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo. Of these, just four are countries where English is an official language. Of the others, two are Lusophone states and ten are French-speaking.

The organisers of the aforementioned conference have found that this linguistic diversity in the region creates certain challenges for them. Nigeria, as by far the largest market in West Africa, seemed to be the logical place in which to host the event for the last couple of years. Certainly, relocating the conference to Abuja (from its previous venue of Dakar, Senegal) two years ago paid tremendous dividends in terms of boosted attendance numbers and a good buzz of activity at the 2008 and 2009 iterations of the gathering. This was achieved, however, at the cost of making the event a tad less attractive for delegates from the numerous French-speaking markets. This effect was somewhat mitigated by ensuring that simultaneous English-French translation was available during all conference sessions, but perhaps not as much as was hoped given that this year Informa Telecoms & Media have moved the show back to Dakar again.

Given that delegates from telecoms operators attend for free, Informa monetises its Com World Series events (of which West & Central Africa Com is one) largely by selling sponsorship packages and exhibition space to the telecoms technology vendors that do business with those operators. These vendors will doubtless remain keen on the potential of the large (and fragmented) Nigerian telecoms market and might be concerned about not having a good tradeshow route-to-market to address this now the conference has headed back to Dakar.

With this in mind, I guess, Informa are also running a specifically Nigerian event in Lagos this year. This will make its debut in September.

In the meantime, what can we expect to be discussed at the Dakar gathering?

I guess one hot topic - addressed via offline chitchat if not via presentations and panel discussions - will be the effect of Zain's withdrawal from the region. The Kuwaiti group currently controls opcos in Burkina Faso, Ghana, Niger, Nigeria and Sierra Leone - as well as others in markets elsewhere in sub-Saharan Africa. As discussed ad nauseum in DTW posts passim., all of these are now set to be in the hands of giant Indian cellco Bharti Airtel. DTW's most recent article, mainly a brief exploration of whether India's mobile market is set to consolidate, did a little to talk up the ways in which Bharti Airtel might be able to reinvent Zain Africa by introducing the low-cost business model which it has empoyed on home turf. So let's see how much tougher sub-Saharan markets are set to become for Zain/Bharti's competitors.

This acquistion, however, may yet take a little while longer to conclude. One reason for this could be resistance from the governments of the countries in which the Zain-owned opcos are set to change hands. That said, there have been recent signs of these obstacles being overcome.

Back in March, for example, as reported by India's Economic Times, the Government of Gabon said it "disapproves" of the sale of Zain's Gabonese assets to Bharti Airtel and reserves the right to take "all necessary measures". Late last week, Reuters was reporting that this objection had been resolved.

It will be interesting, then, to see how long it takes to deal with any further problems of this kind. If the difficulties do continue into June, it should be interesting to connect with Tiemoko Coulibaly, Vice President of Zain's Western Africa operations at West & Central Africa Com in Dakar.

There will be many other reasons to attend the event - but connecting with the likes of Mr Coulibaly could be motivation enough for anyone who does business with Zain in Africa and now needs to keep on top of how the change of ownership is set to change the game.

Afrique Occidentale & Centrale Com: De retour au Sénégal par demande générale

Zain Africa Speculation Watch: Episode 4

Much of the commentary on the Zain-quitting-Africa rumours has focused on how such a move seems at odds with the Kuwaiti group's recently stated ambition to be a top 10 global mobile operator by 2011. I thought I'd also like to have a dig around for any recent evidence to suggest that Africa, specifically, continues to be of strategic importance to the company.

I found one piece of such evidence contained within the Q4 2008 Zain update by Gavin Patterson of Informa Telecoms & Media. I'm not 100% sure when this was written (as opposed to published). It refers heavily to Zain's Q4 2008 results announcement, which was made in March and contains references to events which took place in May - but the Informa piece itself is dated 16th June. If Patterson's article was written just this week, I wonder why there is no reference to the current speculation about the group's African assets. Whatever the timing, I find one particular statement from Zain's March announcement to be very interesting in the context of this week's rumours:

"[Zain CEO Saad] Al Barrak said the financial crisis was an opportunity to make more acquisitions in Africa and indicated that the group was "actively" pursuing a number of prospects. He said Zain would adapt its strategy – where it made commercial sense and where it was economically viable – to pursue opportunities involving share swaps and acquiring minority stakes in other telecoms operations."

Specifically in the African context, then, if recent rumours are to be believed, Zain has moved from acquisition mode to selling in just three months.

Share swapping would not be a new experience for Zain. Last month, the group announced a deal of this type with Paltel, owner of the only mobile network so far operating with dedicated coverage of the Palestinian Territories (although this monopoly is set to be broken this year by the entry of Wataniya Palestine, assuming issues around Israel releasing spectrum do not prove insurmountable).

In the context of discussions around Zain getting out of Africa, it's really interesting to see Gavin Patterson's article going into some detail about where in the continent the group might be looking to expand. He writes that "Zain has also made public its interest in South Africa and Mali and was disappointed not to win Rwanda's third mobile license at the end of last year, which went to Millicom International Cellular. According to Patterson, Zain plans to make "three or four" acquisitions in Africa this year.

Expansion of this kind - rather than the recently rumoured shrinking of the group - seems in line with the group's plans to have a subscription base of 150 million by 2011. To reach that figure, however, Informa Telecoms & Media's number crunchers feel that Zain would need to be even more aggressive in terms of acquisitions because, as Gavin Patterson writes, based on its current operations, his company forecasts that the group will fall well shy of that 150 million subs mark, with 83.4 million subs by the end of 2011.

Zain Africa Speculation Watch: Episode 4

Cameroon, Côte d’Ivoire, Ghana, Mali and Senegal stand out among West and Central Africa's booming mobile markets

An article from the African Press Agency this week, picked up by Cellular News, has rounded up a very positive set of Q3 2008 operational results from telcos doing business in West and Central Africa, including MTN, Orange, Zain, and Millicom Cellular International.

The mobile markets of Côte d’Ivoire, Ghana, Gabon and Mali, according to the unnamed authors of a report to which the article refers, are found to be larger than expected. Conversely, the mobile markets of Cameroon, Mauritania and Senegal were found to be smaller than expected by the end of 2008.

This report apparently included a five-year mobile telephony forecast for West and Central Africa which forsees the strongest subscriber growth occurring in Cameroon, Côte d’Ivoire, Ghana, Mali and Senegal. The report adds that in Cameroon and Mali, penetration rates were still relatively low at the end of 2008, giving these markets considerable room for further future growth. The report authors are correct. According to the World Cellular Information Service offered by Informa Telecoms & Media, mobile penetration in Cameroon stood at just over 31% by the end of December 2008 and at just over 28.5% in Mali.

These are the sort of numbers I expected. Much more surprising is the 103.66% penetration recorded in Gabon - and the fact that the Gabonese market has doubled in size over the last two years. True, the relatively small country with a small population (around 1.5 million) has abundant natural resources and has apparently enjoyed decent levels of foreign private investment, all of which has made Gabon one of the more prosperous countries in the region, with the highest Human Development Index in Sub-Saharan Africa. Mobile penetration of over 100% still seems unusually impressive, even in this context. In the rest of Sub-Saharan Africa only South Africa and Botswana have broken the 100% barrier.

This article, then, indicates that West and Central Africa's mobile markets are in rude health. It is certainly the case that the Com World Series conference and exhibition which serves this region was one of Informa Telecom's & Media's more impressive success stories in 2008, with delegate numbers up 72% vs. the previous year's event. I do not believe that all of this growth can be attributed to shifting the conference to Abuja, capital of the continent's largest market, Nigeria. My former colleague, Julie Rey has done a magificent job growing this and other events in Africa in her time with the business.

One of the CEOs who contributed to the 2007 version of the event (in Dakar, Senegal) has been in the news this week, for rather less happy reasons than some new achievement on the part of the cellco which he leads.

Aimable Mpore heads up MTN's operation in C­ôte D'Ivoire, a country from which he has just been expelled according to a Cellular News article I read this week. Mr Mpore (who has dual Canadian and Rwandan citizenship) has apparently managed to embarrass the country's President.

One of the frustrations of doing the same job as Julie in other world regions was having to handle cancellations on the part of keenly-anticipated conference speakers. My view is that everyone who agrees to make a presentation or join a roundtable discussion does so in good faith, genuinely intending to be there as advertised. I therefore realise that it makes sense to take it on the chin when some legitimate cause for withdrawing crops up. I am not sure if Mr Mpore was planning to make it to Abuja for this years's West & Central Africa Com. Unless his current difficulties are resolved soon, I would say he has a legitimate reason to decline the invitation or go back on any arrangement already made.

As I look back fondly on my years of rounding speakers for industry conferences worldwide, this is one aspect of the job I will not miss.

Cameroon, Côte d’Ivoire, Ghana, Mali and Senegal stand out among West and Central Africa's booming mobile markets