A load of crap from an idle brain

After losing out on MTN and pocketing Warid of Bangladesh, it looks like Bharti Airtel is on a tearing hurry.  As the world’s fastest growing telecom market, India becomes more and more competitive with more than 10 service providers already, Bharti is looking to spread the eggs across other markets.

Bharti Airtel is in $10.7 billion talks with Zain to buy most of the Kuwaiti telecom’s cellular assets in Africa — the Indian firm’s third attempt to gain a foothold in the region.

The deal, if clinched, would be India’s biggest overseas acquisition since Tata Steel’s $12 billion purchase of European steel maker Corus in 2007.

Mobile subscriber additions are running at a monthly average of about 15 million in India, making it the world’s fastest-growing wireless market. The rapid pace has attracted new foreign operators such as Telenor and Sistema, making competition more intense.

Call charges have fallen sharply, to as low as a fraction of a US cent per minute, squeezing margins and clouding earnings growth potential.

Bharti reported its slowest profit growth in more than three years for the December quarter, and average revenue per user (ARPU) — a key operational gauge — fell 29 per cent to 230 rupees ($5). The market is also showing early signs of saturation, with penetration reaching about 45 per cent.

To beat the slowdown, Bharti has been scouting overseas, with a focus on high growth-potential emerging markets. After failing to get a deal with South Africa’s MTN Group, the company has set up a new unit to drive overseas expansion. It also agreed last month to acquire control of Bangladesh’s Warid Telecom.

Africa is attractive for Bharti as the mobile user base is low there, with just over a third of the population having a mobile.

Zain’s 15 African operations included in the deal have a combined user base of about 42 million, and the operator is No.1 in 10 markets, ranking second in another four, according to brokerage reports. ARPU in these operations ranges from $3 to $25, with 10 of the 15 having higher ARPU than Bharti.

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In a significant move signaling its continued commitment to the rapidly growing Indian economy, Gulf Finance House, yesterday signed a wide ranging agreement with the Government of Maharashtra to facilitate the creation of one of the largest development projects in the state – a state-of-the-art Economic Development Zone – just outside Mumbai, the country’s financial and commercial capital.

The 1600-acre zone, which will attract a total investment in excess of $10 billion, comes exactly a year after GFH had signed a similar agreement with the state for the development of India’s first energy business district – Energy City India. The bank had floated an immensely successful private placement initiative earlier this year that raised $630 million towards the first phase of its development. The economic development zone announced yesterday will include Energy City India, apart from incorporating three additional components – Telecom City Mumbai , Software City Mumbai and Entertainment City Mumbai.

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