Bharti Shows Off New Physique
That's because it has closed its acquisition of Zain Group 's African assets, a move that, Bharti Airtel believes, makes it the fifth-biggest mobile operator in the world. It has more than 180 million customers in 18 markets, including 42 million customers in 15 African markets, as a result of the US$10.7 billion deal, and annual revenues of more than $12.4 billion. (See Bharti Secures $10.7B African Acquisition.)
In addition to its existing businesses in India, Sri Lanka, and Bangladesh, Bharti now has operations in Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda, and Zambia. The carrier says it is the market leader in 10 of those 15 African countries and the second-placed operator in four countries.
Now comes the tricky part, as Bharti has to capitalize on the potential those 15 markets offer. According to Pyramid Research analyst Badii Kechiche, Nigeria will provide Bharti's biggest operational and strategic challenge. (See Bharti's African Adventure.)
To add to that challenge, it seems there's an ownership dispute over the Nigeria operations.
African carrier Econet Wireless has issued a statement saying that it's a shareholder in Zain Nigeria, and that the "dispute surrounding the ownership of the assets in Nigeria which form part of the transaction is not resolved and that Econet is not party to any agreement between Bharti Airtel and Zain."
It adds: "The dispute over the ownership of the Nigerian mobile operator, formerly Vee Networks, is the subject of international arbitration proceedings, before a Tribunal constituted under the United Nations Commission on International Trade Law ("UNCITRAL") and proceedings in the Lagos State High Court."
Essentially, Econet says it has the first right of refusal on the sale of any stake in Vee Networks, now Zain Nigeria, and that it was ignored in 2006 when Celtel (now Zain) bought out the other shareholders and took control of Zain Nigeria.
Econet's dispute doesn't look like it would unravel the Bharti/Zain deal, but it could be a thorn in the side of Bharti's developments in Nigeria, where it now has more than 15 million customers and the second-largest market share.
— Ray Le Maistre, International Managing Editor, Light Reading