Mergers. mergers, everywhere. We’re told there are merger reviews on in Pakistan and the Philippines. But it’s the AT&T acquisition of T Mobile that’s getting the media play. Sam Paltridge, Member of the Scientific Advisory Council of LIRNEasia, is quoted on the implications of the merger for visitors: Mr.
In the end, it comes down to the Budget Telecom Network Model. The recent Bharti 10.7 billion USD offer for Zain has depressed share prices and generated a big debate. But it really boils down to this: The trick for Bharti, which pioneered low-cost telecoms in India, will be to bring down Zain’s high cost base and win subscribers, say analysts — and to get subscribers to talk more using lower tariffs. Bharti is famous for its so-called “minutes factory” business plan — the low-cost, high-volume model that has made it India’s leading mobile company.
Two years back China Mobile bought Paktel for US$460 million. That was a legitimate transaction. Last week two Chinese nationals were arrested while the authorities busted a bypass den at Islamabad. They have been allegedly the partner of an “influential Pakistani” in this illegal venture. It claims to have caused an estimated six billion rupees (US$74 million) loss to the exchequer.
Qatar Telecommunications Co QTEL said on Saturday it would begin tender offers for shares in Indonesian telecoms firm PT Indosat on Tuesday to lift its stake to 65 percent, the maximum allowed. Indonesia limits foreign ownership in the telecommunication sector to a maximum of 65 percent for mobile phone operators and 49 percent for fixed-line operators. Two tender offers would begin concurrently in Indonesia and the United States at 7,388 rupiahs ($0.661) per share and would expire on Feb. 18, Qtel said.
In 1997, NTT bought 35 per cent of a badly managed government phone company called SLT along with the right to manage it for five years for USD 225 million. The decision was bracketed by the Central Bank attack (on a per capita basis more devastating than the World Trade Center hit of 11 September 2001) and the bombing of an empty [Sri Lankan] World Trade Center. Many wondered what the logic was. One explanation was that NTT saw Sri Lanka as a stepping stone to India. But no step was taken.
According to TelecomTV, TeliaSonera is acquiring controlling interests in Spice Telecom, the second mobile operator in Nepal and Applifone, the fourth largest operator in Cambodia. This is an intriguing development from a company many thought was withdrawing from the South Asian region. A few years ago there were well publicized negotiations to sell its stake in Sri Lanka’s Suntel, which is believed to have failed for the lack of a high-enough bid. TeliaSonera and its predecessor entities have not shown the nimbleness of its Nordic competitor, Telenor which has strong positions in South and South East Asian countries. One hopes it will.
It would be the biggest thing to pass between India and South Africa since Mahatma Gandhi moved from one country to the other. This week it emerged that Bharti Airtel, the largest mobile-phone operator in India, is holding “exploratory” talks to buy South Africa’s MTN, the biggest operator in Africa. According to the Financial Times, Bharti has indicated it would be willing to pay about $19 billion for 51% of the company. That would make it the heftiest overseas acquisition ever made by an Indian firm, more than Tata Steel paid for Corus, a British steelmaker, and seven times the amount India invested in the whole of Africa over the ten years to 2004. The deal would unite the leading companies in the world’s two most promising mobile markets.