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Africa is emerging as one of the most sought after destinations for Indian telecom companies, with Kenya taking a key position. Africa requires huge investments from global telecom giants to leap frog in the ICT sector and revolutionize the economy. The recently concluded 'Connect Africa Summit' has received investment commitments worth more than $55 bn with the ICT sector maintaining the lead. The mobile market is one of the fastest growing sectors in the last five years, globally; and in Africa, the growth is twice as fast as the global market.

Growth Potentials
Like the Indian market, mobile phones overtook fixed lines in 2001 and now outnumber by seven to one, with nearly 193 mn cellular subscribers in 2006. This figure is likely to grow to more than 270 mn by the end of this year.

Mobile operators of the GSM Association recently announced $50 bn new investments over the next five years to expand and upgrade networks across the continent. This is expected to offer mobile coverage to more than 90% of the African population. Broadband is also expected to receive enough investment in the coming years.

The World Bank Group recently said it is keen to double its investment commitment in Africa's ICT sector to $2 bn by 2012, from its earlier commitment of one billion dollars.

In the Race
The growth potential had already prompted telecom operators such as Bharti Airtel, Reliance Communications, and Tatas to look for a majority stake in Telkom Kenya. These players are also looking at investment opportunities in other African countries.

However, the Ruias-promoted Essar Communications Holdings, the telecom subsidiary of Essar Global, which is focusing on global expansion with projects and investments in Canada, the US, Africa, Middle East, Caribbean, and South East Asia, is ahead of some of competition as far as the Kenyan telecom market is concerned.

Essar Communications has acquired 49% equity stake in Econet Wireless International (EWI) by subscribing to fresh capital in the company. This strategic investment is expected to benefit Econet Wireless Kenya (EWK), which is 70% owned by EWI, to rollout service in the Kenyan telecom market with a number of special offerings.

This keenness to invest in Kenya shows that the Essar Group is readying to flex its muscle in the overseas telecom market as well, besides India, where it is a JV partner in Vodafone Essar. Econet Wireless is a diversified telecommunications group with operations in nine countries in Africa, Europe, and the East Asia Pacific Rim. Essar says it will actively participate with EWI in the network rollout of EWK.

“Through this alliance, EWI hopes to establish across African markets the successful business models which have emerged in countries such as Philippines, Pakistan, Indonesia, and India. These were built around aggressive network rollouts and competitive pricing, resulting in high mobile penetration,” says Zachary Wazara, executive director, Econet Wireless Group.

As the US and European operators are looking at emerging markets for spreading their wings, Indian telecom players, too, want to spread to emerging markets, Kenya being one of them.

Baburajan K
baburajank@cybermedia.co.in