FT Eyes Emerging Market M&A
The CEO told a conference organized by newspaper Les Echos that FT is weighing up its options in fast-growing, emerging markets, specifically in Africa and Asia/Pacific, but not in Latin America, where Telefónica SA (NYSE: TEF) is the dominant international operator.
A spokesman for the carrier says the firm has been scoping out opportunities outside Europe for some time. FT said in January that it had no further need for any major European acquisitions following its move into Spain with the purchase of mobile operator Amena in July 2005. (See FT Takes on Telefónica.)
Now, France Telecom "will pursue selective opportunities" that offer "high growth potential," notes the spokesman.
It's not the only operator sniffing out such opportunities. Acquisition action in emerging markets has been mounting of late as carriers with mobile experience size up markets with poor fixed-line teledensity (the number of phone connections per hundred people). (See Emerging Markets See More Mobile M&A and Vodafone Unveils Convergence Plans.)
France Telecom isn't identifying any specific markets it's looking at, though it's notable that the carrier's mobile operation, Orange SA (London/Paris: OGE), already has a presence in Africa in countries such as Egypt, Cameroon, Ivory Coast, and Madagascar, but none in Asia/Pacific at all.
India is one market that is displaying rip-roaring growth and which is ripe for overseas investment from major carriers. AT&T Inc. (NYSE: T) and BT Group plc (NYSE: BT; London: BTA) are already preparing to enter the long-distance market there, while Egyptian carrier Orascom Telecom has taken a stake in Hutchison Telecommunications International Ltd. (NYSE: HTX), which has a mobile operation in India. (See BT, AT&T Set Sights on India.)
Now, it seems, FT's international business, Orange Business Services (formerly Equant), is planning to join BT and AT&T in that market, according to local media reports.
FT might also like the look of the Indian mobile market. According to the latest statistics from the Telecom Regulatory Authority of India (TRAI) , mobile subscriber numbers have now reached more than 101 million, up from 55 million a year ago, with 4.25 million new mobile subscribers signing up in May 2006 alone. India's current teledensity is 13.4 percent.
Any such move to invest in India or acquire an operator elsewhere could be funded by the sale of part or all of FT's stake in French directory business PagesJaunes Groupe . The carrier's 54 percent stake is valued at €3.4 billion (US$4.3 billion). (See FT to Sell PagesJaunes.)
— Ray Le Maistre, International News Editor, Light Reading