Africa - New playground for Chindia

February 2010 came with events which shows African love for both China and India.
Africa is clearly being identified as next growth markets and is being eyed by Indian and Chinese companies for expansion. We have seen news of active acquisition in field of Oil and Gas and also automobiles, example Mahidra and Tatas setting up shops in South Africa as part of MEA region strategy.
Next in line is telecom business landscape. Chinese and Indian players are currently first and second biggest markets by subscribers in the world and growing at a fast pace.
Wireless story has been successful in both the countries, and private wireless brands like Bharti and Unicom have made healthy balance sheet. There is surely an interesting scene building up in telecom in Asia region. Global telecom brands are actively looking options to enter both these markets whereas domestic telecom brands need to look outside to expand for growth. Bharti aggresive bid for MTN confirmed global ambitions of Indian players to buyout in other markets.
What best can be options for expansion than Middle East and Africa region. MEA telecom landscape had been monopoly driven by state owned incumbents till late, but with MEA countries opening market for new players in both fixed and mobile space, telecom opportunities are showing in ample.Market previously controlled by State incumbents, limited telecom services, low teledensity are just good starters for any telecom players to jump on the opportunity.
Therefore, for China and Indian telecom players, MEA region is a good bet, seeing region proximity, telecom congomelarate opening in multiple countries in MEA, valuations, opportunity are some of parameters to lure them for acquisitions.
An invisible race has just started between Chinese and Indian players to enter MEA market, with Bharti bidding for Zain African operations and China Unicom bidding for Nigeria Telecom.Valuations of both these deals are high like $10bn for Zain and $2bn for NITEL, still these valuations are seen positive by analysts for these players.
I am seeing telecom landscape in MEA and Chindia region wherein, you will have few big brands controling major of the market say 5 years down the line. This is in assumptions that M&A in Indian telecom landscape will kickoff as expected in 1-2 year timeframe.
Africa is surely next playground for Chindia telecom brand to develop and showcase their business muscles.

Telcos growing across boundaries

Where will be next billion subscribers coming from?

As an execution step towards the answer, telcos are all set with cross boundaries growth.

AT&T, one of the early entrant in Indian market made a decent profit of around $250mn after selling its stake in Idea back in early millenium. Thats a different story that current value of same stake is more than $2billion.

AT&T is standing right there waiting for its chance to enter Indian market again. Phenomenon of strong Indian telecom story is definately attracting major player across geography.
The reason is beyond just putting its dot in emerging market map. It is about getting balance sheet strong by matching up slow growth in current geography with fast emerging market for players in saturated market.For emerging market player, it is more to quench their thirst for larger play and ambitious plans.
With Middle east too witnessing fast growth in telecom sector after recent liberisation by the government, players in those region have realised the importance of moving out from reginal shell and spread its business in similar markets.
Etisilat recently confirmed its plan to enter Indian market through an Indian player, it is already in talks with Spice Communications, Datacom to name a few.
Also, there has been lot of unseen synergy which players like MTN and Reliance are working on, after Bharti opted out of race for MTN.

Similarly, players in middle east are actively working on buying stake in Indian wireless players and new greenfield players. This reaction from Middle east players came into picture after Vodafone's strategic acquisition of Hutch India to get emerging market as part of its growth plan. Major players like MTN, Qatar Telecom , Etisilat are all eyeing pie in Indian market since their hoem market will soon start witnessing lot of comeptition from new players. It becomes very important to open international strategy to make sure revenue dependency is not region focused.
Interest developed by middle east players in India and vice versa has opened one more dimension of growing business attractions between middle east and India for telecom landscape. This is an exciting step since it was not predicted or talked about option.
Major telco like Bharti and Reliance have been trying continously to enter Middle east market. They have been trying by bidding for licences but in vain. So now, they see ruote through mergers and acquisition as the best way to spread their expansion plans.
With western players actively eyeing Indian market, middle east players working aggresively to move out from regional shell and Indian players working on their global expansion plans, Telecom landscape is clearly geting more eventful and exciting.