Clash of the Titans

MTN could face its first real competitor on the African continent if exclusive talks between Bharti Airtel and Kuwaiti-based provider Zain produce a sale.

Linsdsey Mc Donald

Zain and Bharti have confirmed they had entered into exclusive talks over the sale of Zain's African presence. The deal will not include Zain's Sudan operation, which currently boasts seven million customers, or the newly created Moroccan operation, of which it owns 30%.

Bharti Airtel hopes to snatch up Zain's substantial African operations for $10.7 billion. According to Frost & Sullivan ICT consultant Lindsey Mc Donald, the move has taken many in the industry by surprise.

"This move would indicate a period in which Zain is set to reconsider its strategy. An additional dimension to this situation is the recent resignation of the CEO, someone widely credited with turning Zain into the success story it has become. The operator also announced yesterday that Nabil bin Salama will now be assuming the role," she says.

Mc Donald says Zain may well be looking to its core assets, possibly pushed home by the global economic downturn. "While there is a lot of potential in the African market, it is an expensive region in which to deploy assets."

She says Bharti would make a perfect partner, especially since it has courted access to Africa through MTN in the past. "This move will pitch them as highly competitive rivals."