Africa - Foreign investments in telecommunications
By Peter Lange - BuddeComm

With around 13% of the world's population and less than 5% of the world's telephone lines (including mobile connections), Africa can well be regarded as the last unexploited territory for big telecommunications investments. A wide spectrum of opportunities exists for both local and foreign investors.

The combined fixed and mobile investment on the African continent is expected to reach US$65 billion for the period 2000 to 2009. Mobile investment is expected to take the larger share of this with a cumulative amount of US$25 billion in 2004, expected to rise to US$46 billion in 2009.

Telecom investments by foreign partners and lenders are expected to more than double over the coming few years, driven mainly by Middle Eastern and European operators broadening their portfolios beyond their home markets. France Telecom, Vodafone, Portugal Telecom and Deutsche Telekom (see separate reports) have all made significant investments on the continent.

South African mobile operators Vodacom and MTN have emerged as pan-African players, as well as international operators such as Millicom and Celtel (now owned by MTC/Zain of Kuwait). Through its acquisition of Lebanese-owned Investcom, MTN has expanded into the Middle East and additional African markets with now a total of 21 country operations. The company was ranked fourth among the top 60 global performers in terms of its shareholder performance index (SPI) in Oliver Wyman's State of the Industry report for the years 2002 to 2007.

Etisalat of the UAE is another Middle Eastern investor in the process of broadening its portfolio in Africa, along with a number of private equity firms from the region.

For more information, see separate reports:
· Africa - Pan-African Operators - Overview & Statistics;
· Africa - Pan-African Operators - History to 2006.

In addition, virtually all the major telecommunications equipment suppliers have invested in Africa, including Alcatel, Ericsson, Lucent Technologies (Archived), Nokia, Nortel Networks and Siemens (see separate reports), and more recently also Chinese companies, notably Huawei Technologies and ZTE.

Several countries are changing their laws to open up their markets to more competition and offering favourable tax breaks to attract greater foreign investment.

For more information on individual markets, see BuddeComm's Africa Telecom Reports

Click here for a full analysis of the Africa and Middle East Mobile Telecoms Market 4Q 2008 with subscriber numbers and mobile penetration for all operators and States.

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