Zain signals intent to fight for South Africa licence

AFRICAN EXPANSION: Zain plans to bid for South Africa's fourth mobile licence, which could become available next year, Gabriel said. (Getty Images)

Kuwait-based telecom Zain is keen to acquire a licence to become South Africa's fourth mobile operator, which the government has said could become available in 2009, a senior company executive said on Friday.

Chris Gabriel, Zain Africa's chief executive, told newswire Reuters in an interview that Zain was eager to enter the South African market and compete with leading mobile operator Vodacom Group and Africa's dominant operator MTN Group in their own backyard.

"We are interested in the South African market and we heard reports about a fourth mobile licence coming up," Gabriel said.

"There were two to three reports being mooted in the past months about this license, but to date we haven't heard any more. If there is an opportunity we will definitely consider it."

In May, Khotso Khumalo, the chairman of the South African parliamentary portfolio committee, told journalists at a media briefing that government will license a fourth mobile operator and a third fixed line operator in 2009.

Zain operates in 20 countries. In 14 African countries as Celtel and in six others in Africa and the Middle East as Zain. It has operations in Nigeria, the Democratic Republic of Congo and Sudan. The group has invested more than $10 billion in Africa since 2005.

Zain is looking for growth opportunities in the continent and aiming to be a major global player by 2011. As part of its growth strategy, Zain is planning to commercially launch its Ghana operations by the end of this year.

"It's [the Ghana operation] totally funded and we will fund it to pursue growth," said Gabriel.

In April Zain launched a revamped network in south Sudan. It said it plans to spend up to $150 million expanding in the semi-autonomous region emerging from decades of war.

In the second quarter of this financial year Zain invested close to $200 million in Nigeria in network growth and infrastructure.

"We are very well placed now to absorb the growth in the market place," said Gabriel.

He said the group was also expanding in Nigeria to regional and remote areas to actively grow its customer base.

To deliver on its growth strategy the group expects to conclude acquisitions of probably three to four or more mobile operators in Africa in the next six to 12 months, Gabriel said.

"We are looking at a business plan not dissimilar to an airline. We have a plan that has first class, business class, economy and standby. We are looking to adapt our business model," he said.

Zain is considering a European share offer worth up to $5 billion next year and is keen to roll out a third generation (3G) technology network in Africa in the future.

In April Zain's first-quarter profit rose 10% to 73.3 million dinars. (Reuters)

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