More M&A activity in Africa as the continent's telecoms retain strong growth

According to my colleague Matt Reed, preparing an M&A strategy is one of the top 10 priorities operators should look at to succeed in Africa’s telecoms market. Looking at the news in the past couple of weeks, it seems that the major groups operating on the continent are already actively working on this strategy.
Since Bharti announced its acquisition of the African operations of Zain, the deal hasn’t gone as smoothly as it could have been. In Nigeria, Zain’s operation is still the subject of an ownership battle; this is the continent’s largest market and the main source of revenue among Zain’s African assets, so it is crucial in the group's success. In the smaller markets of Gabon and Congo, government authorities are objecting to the buy-out of one of their leading operators without being consulted and are threatening to suspend the operators’ licences. Are these mere hiccups or will they seriously affect Bharti’s strategy in Africa?
MTN, which Bharti spent most of 2008-2009 in failed discussions with, is still on the expansion trail. The pan-African group is now talking to Egypt-based Orascom about its African operations in Algeria, Tunisia, Burundi, Central African Republic, Namibia and Zimbabwe. This would potentially create the world’s 3rd largest mobile operator, but Algerian authorities are currently opposing the deal. Algeria is one of the most promising markets left in Africa, with a large young population and 3G services which have yet to be licensed. Without Algeria, the MTN-Orascom deal would lose a lot of its appeal.
Orange/France Telecom posted its financial results this week, and despite lower overall revenues, its African operations registered considerable growth. With this in mind, the group’s new CEO Stéphane Richard also announced a plan to invest 7 billion euros in Africa and the Middle East in the next five years. Orange already has a strong presence in French-speaking Africa: its latest launch was a triple play service provider in Tunisia, but its main presence is in West Africa, where it seems it would concentrate most of its efforts.
Saudi group STC has also expressed an interest in Africa for expansion in the last few days, continuing the trend (reversed only by Zain) of Middle Eastern groups eyeing Africa as the next place for growth.
M&A activity and regional groups’ strategies on the continent will continue to be major topics of discussion at events in the Com World Series, with among others interviews from regional group representatives of Zain and MTN at West & Central Africa Com in Senegal in June, an event dedicated to Nigeria’s market in September, a special focus on Algeria’s market at North Africa Com in October, and keynote sessions on investment and operators’ strategies at AfricaCom in November.