Time to Bharti

In­dian gi­ant to launch in Africa

Finweek English Edition - - Tech Trends -

HAV­ING ACQUIRED Zain Tele­coms, In­dian cel­lu­lar gi­ant Bharti Air­tel says it will launch its brand in Africa around Oc­to­ber 2010. CEO Manoj Kohli said his com­pany was “firmly in the driver’s seat” and pre­dicts rich re­wards from the con­ti­nent.

Bharti’s ini­tial at­tempt at break­ing into Africa in­volved a sug­gested merger with South Africa’s MTN that would’ve formed the largest emerg­ing-mar­ket tele­coms com­pany ever. But the deal was doomed be­fore it be­gan thanks to In­dian leg­is­la­tion, dis­in­ter­est from in­vestors and other fac­tors.

Out­go­ing MTN CEO Phutuma Nh­leko was ques­tioned about the failed talks and Zain ac­qui­si­tion at his com­pany’s most re­cent re­sults pre­sen­ta­tion and said: “They have cho­sen to ven­ture into the jun­gle alone. We think they would have been bet­ter off had they done so hold­ing our hand.”

Now the for­mer po­ten­tial part­ners are pit­ted against each other in sev­eral African mar­kets, in­clud­ing Nige­ria – Africa’s largest econ­omy in terms of po­ten­tial.

Kohli is bullish about Africa. He said he be­lieves that Africa will grow to be a big­ger mar­ket than China or In­dia in terms of con­sump­tion. He listed a com­bined GDP of US$1,4 tril­lion for the con­ti­nent and pointed to a level of ur­ban­i­sa­tion of 40% – a most mean­ing­ful statis­tic for providers of telecom­mu­ni­ca­tions.

More im­por­tantly, he cited the large and grow­ing African mid­dle-class that to­day con­sists of 400m peo­ple, but will soon grow to be­yond 500m.

Kohli says that 27 out of 30 economies in Africa are grow­ing well with a 5% in­crease in GDP/year. He also sees pos­i­tive signs in demo­cratic trans­for­ma­tion that has been wit­nessed in the last five years.

To top all that, more than 20% of African GDP is be­ing spent on telecom­mu­ni­ca­tions and in­fra­struc­ture, and trade with other de­vel­op­ing mar­kets is grow­ing well, but with a small pen­e­tra­tion there’s still mas­sive room for growth.

“Peo­ple will soon have to choose just one brand. We will try to make that brand Bharti in the fu­ture,” he said.

With re­gional head­quar­ters es­tab­lished in Nairobi, Bharti is ready ini­tially to tackle 15 coun­tries, ap­ply­ing a three-phase strat­egy. The Zain brand is be­ing re­moved com­pletely.

“First, net­work qual­ity must be im­proved, sec­ond is ser­vice qual­ity with call cen­tres and other such op­er­a­tions be­ing bol­stered, and fi­nally we must have good qual­ity prod­ucts ready be­fore launch­ing the brand. This will all hap­pen by Oc­to­ber,” said Kohli.

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