Bharti Airtel acquires Telecom Seychelles

Indian operator Bharti Airtel is continuing its investment in Africa by acquiring Telecom Seychelles for approximately $62 million.

Telecom Seychelles, which started as a mobile operator 12 years ago, now offers 3G as well as integrated wireline services, and has over 57% of the telecoms market share on the island.

“We are delighted at the addition of Seychelles to our Africa portfolio,” said Manoj Kohli, CEO and managing director at Bharti Airtel International. “Telecom Seychelles has world-class operations that include state-of-the-art 3G services. These operations will benefit further by leveraging the efficiencies of scale of our African operations.”

Bharti recently gained a foothold in 15 African countries following its $10.7 billion acquisition of Zain’s regional assets. It has since committed to a $600 million investment in Nigeria, as well as $100 million in both Gabon and Malawi. The company now has a presence in 19 countries worldwide.

“Nigeria alone represents a large market for Bharti,” said Dobek Pater, a consultant at Africa Analysis. “It is penetrated at about 51% and we expect that to increase to 75% by 2014, with up to 127 million subscribers. Apart from mobile growth, the data and internet market is in a nascent stage of growth with good prospects for future developments. Gabon and Malawi are far smaller markets. In Malawi, Bharti has a 68% market share, and it intends to deploy a 3G network which is where much of the new investment will be committed.”

Pater expects the improvement of ARPU to be the biggest challenge for Bharti in Africa, which he believes it will try to increase through the introduction of new products and services.

Bharti says it will now invest a further $150 million in its Tanzanian operations, and will also put additional funding into Kenya, Zambia and possibly Uganda. “They hold the number two position in the Kenyan mobile market, but they have been losing ground against Safaricom on a large scale,” said Pater. “They are also up against Orange and Essar there. Kenya is an important regional market in east Africa. Bharti has advanced as the main mobile operator in Zambia and has now announced plans for further investment.”

Bharti reported a 32% fall in net profit to Rs16.82 billion ($361 million) for the quarter ended June 30, over the same period of last year. ARPU slipped by 23% year-on-year. The results include 23 days of operations of its African assets.