Monday, Jul 20, 2009
Gulf News
Abu Dhabi: The Dhabi Group on Sunday announced that it had agreed to enter talks over a possible investment by the Essar Group into the telecommunications portfolio of Dhabi's African assets.
The Dhabi Group is a holding company for the investments for Abu Dhabi's ruling family. The Essar Group is one of India's largest cellular service providers.
Shaikh Nahyan Bin Mubarak Al Nahyan, Chairman of Dhabi Group, said the transaction would involve an equity infusion into its businesses as growth capital. He said this would be the basis of a partnership to create a significant presence in Africa.
He did not reveal the amount of the investment, but said he sees huge potential in Africa's telecoms market.
"Telecoms is one of the fastest growing sector in Africa today and I see huge potential in this market & billions of dollars," he said after signing a Memorandum of Understanding (MoU) with Prashant Ruia, Essar chief executive.
Owned by the Dhabi Group, Warid Telecom is operating in Kenya, Uganda, the Ivory Coast and Congo.
Ruia, whose company also has a significant presence in Kenya and recently launched Kenya's fourth mobile cellular network under the brand 'yu', said while there is increased competition in the telecom sector in Africa today, there was still untapped potential.
Africa is the first continent where cellular telephony has outnumbered the fixed line network.
There has been rapid telecommunications development in certain parts of Africa in the recent past.
Warid Telecom's subscriber base increased by 45 per cent to 15.5 million, in 2008, while Essar has over 75 million subscribers.
Shaikh Nahyan said the group aims to strengthen its reach and diversify its portfolio through a series of stragic partnerships that will optimise its potential in the emerging markets.
The African market is estimated to have reached about 375 million subscribers in 2008, up from about 280 million in 2007.
The overall subscription base is nearly three times larger than it was in 2005. It has grown by a compound annual average around 40 per cent over the 2005 to 2008 period.
Shaikh Nahyan downplayed the impact of the global economic crisis on his group.
"The crisis has hit everybody across the globe, but our group has been only slightly affected," he said.
He said the partnership with Essar showed the potential of UAE's companies and business executives to compete on the international market and open new markets, especially in the telecommunications sector.
By Samir Salama, Associate Editor
Gulf News 2009. All rights reserved.
