By Ed Attwood
African asset deal means end of plans for global preeminence, says consultancy.
Zain’s decision to sell of its African mobile assets to Indian giant Bharti proves that the firm is repositioning itself as a Middle Eastern, rather than a global player, an analyst at UK telecoms consultancy Ovum has claimed.
“If Zain wants to be a portfolio investor running itself as a sovereign wealth fund, this deal makes absolute business sense as the African operations have matured to the extent where it’s difficult to grow further in terms of valuation,” Ovum senior analyst Emeka Obiodu told Arabian Business.
“Selling those assets now gives Zain the maximum return.”
Obiodu indicated that the move would make no sense if Zain had ongoing plans to be a strategic global player in Vodafone’s mould.
“They’ve shown that they prefer to be a Middle East player, with a portfolio of assets around the world, wherever it makes sense,” he added.
On Sunday, Bharti said that it had found all of the $8.3bn financing required to buy out Zain’s African operations, with final confirmation expected within in a matter of days.
The two firms are locked into exclusive talks until March 25.
In May 2008, former CEO Saad Al Barrak told Arabian Business that Zain had plans to enter each of the top 20 economies in Africa.
"We always have acquisition plans in many places, and we are eyeing several countries in the Middle East, Africa and Asia," Al Barrak remarked. "We are the leaders by far in the African market, and the more development we can bring to Africa, the better for everybody."