Zain announced today it has satisfied all required conditions precedent to the closing of the sale of 100 per cent of Zain Africa to Bharti Airtel, excluding Sudan and Morocco for US$10.7 billion.

The transaction has resulted in aggregate net cash proceeds of US$8.968 billion. As of June 8, Zain has received US$7.868 billion of cash proceeds from the Indian operator. Over the next six months the Kuwaiti group expects to receive up to an additional US$400m upon certain milestones being achieved. The balance of US$700 million is due one year from completion as per the original agreements signed March 30.

In fulfilment of its debt obligations, Zain has repaid its US$4 billion revolving credit facility which the company entered into in July 2006. Going forward the company intends to utilise the remaining proceeds to pay dividends and to attend to other corporate matters.

Under the terms of the original agreements, Zain has licensed the use of the ‘Zain’ brand and related trademarks to Bharti in all 15 African operations for an interim period.

"This sale crystallises the significant value we have created for our shareholders over the last five years. The board of directors will consider the best use of the remaining proceeds to further enhance value for all stakeholders," commented Asaad Al Banwan, chairman of the board of directors at Zain.

Alcatel-Lucent has signed a turnkey contract worth more than US$500 million with the Africa Coast to Europe (ACE) submarine cable network. ACE will link Cape Town in South Africa to Penmarch in France via a 17,000 kilometre cable, offering 40 Gigabits per second of capability, with a design capacity of 5.12 Terabits per second. The consortium is headed by France Telecom-Orange and consists of 20 operators.

Upon expected commercial launch in the first half of 2012, the network will bring broadband optical data connectivity for the first time to the people of Mauritania, Gambia, Guinea, Sierra Leone, Liberia, Sao Tome and Principe, and Equatorial Guinea.

The other operators in the consortium are: Baharicom Development Company, Benin Telecoms, Cable Consortium of Liberia, Orange Cameroun, Companhia Santomense de Telecomunicações, Côte d’Ivoire Telecom, Expresso Telecom Group, Gambia Telecommunications Company, International Mauritania Telecom, Office Congolais des Postes et Télécommunication, Orange Guinea, Orange Mali, Orange Niger, PT Comunicações, the Republic of Equatorial Guinea, the Gabonese Republic, Sierra Leone Cable, Société des Télécommunications de Guinée and Sonatel.

ACE’s costal route will link South Africa to France via Namibia, Angola, Democratic Republic of Congo, Gabon, Equatorial Guinea, Sao Tome and Principe, Cameroon, Nigeria, Benin, Ghana, Côte d’Ivoire, Liberia, Sierra Leone, Guinea, The Gambia, Senegal, Mauritania, Tenerife (Spain) and Portugal, and will have 21 landing points along the route. 

Zambia’s government has sold a 75 per cent stake in Zambia Telecommunications (Zamtel) to Libya’s Lap Green Networks for US$257 million, and may offer the remaining share to the public in the near future. Lap Green Networks competed with Angola’s Unitel, Russia’s Altimo and India’s BSNL in the bidding for the fixed-line incumbent, which also owns mobile operator Cell-Z and Internet service provider Zamtel Online.

"The government of Zambia has today paved the way for completing the most significant privatisation in the history of Zambia," minister of finance and national planning Situmbeko Musokotwane stated.

According to the deal signed June 7, the Libyan company will invest a further US$75 million in taking over government guarantees and to settle redundancy packages for more than 2,000 Zamtel employees, as well as US$62 million in network expansion, making a total commitment of US$394 million.

Zain currently dominates the Zambian mobile market with an approximately 70 per cent market share, followed by MTN with 20 per cent and Zamtel with 10 per cent.

Lap Green Network’s investments include Uganda Telecom, Sonitel Niger, Sahel Com Niger and Rwandatel, as well as Green Network operations in Cote D’Ivoire, Sierra Leone, Togo and Sudan.

Qtel has upgraded its HSPA network to offer mobile download speeds of up to 14.4 Mbps, and is already working on another round of upgrades which should see speeds as high as 21 Mbps available by August and 42 Mbps later in the year.

More than 50,000 people in Qatar currently use mobile broadband solutions, logging into the Qtel network using smartphones, laptops, gaming consoles and other Wi-Fi-enabled devices. The new speed enhancements will benefit all customers at no extra cost.

"We have a clear road-map in place that will see Qatar emerge as one of the best-connected nations not just in the region, but in the world. The enhancement of our mobile Broadband network sits alongside our plans for fibre-to-the-home and network upgrades that will ensure everybody can have the best Internet experience wherever they are in Qatar," stated Khalil Ibrahim Al-Emadi, executive director of networks at Qtel.

Alongside the network upgrade, Qtel is also offering its new 21 Mbps modem which follows the successful launch in April of its innovative My-Fi personal mobile hot spot, a pioneering device that enables people to create their own Internet access points from anywhere in Qatar. Up to five people can access mobile broadband over the My-Fi solution.

Earlier this week Saudi Arabia’s Mobily announced it had completed trials of its HSPA+ network with speeds of up to 42 Mbps, in preparation for rollout to major cities across the kingdom. This was the first major speed upgrade for Mobily since the launch of the region’s first HSPA network in the second half of 2009 with speeds of 21 Mbps.

The UAE’s Etisalat is in talks with Reliance Communications (RCom) over the potential purchase of a 25 per cent stake in the Indian firm and has already appointed investment bankers to advise on the proposed deal, according to reports. This would give RCom a much welcomed cash injection which it needs to finance its 3G aspirations, while giving Etisalat access to India’s second largest player with a subscriber base of more than 100 million.

RCom won 3G licences for 13 circles in the recently-completed nationwide 3G spectrum auction and will need to dish out INR 85 billion to cover the licence fees. The operator has said it plans to acquire loans from banks to pay for the licence fees, however it will also need additional finances in order offer value added services to its subscribers.

"A high debt level is not the best of situations for the company in current times when the liquidity is likely to become scarce and the interest rates are also likely to go up in the next six to nine months. This will impact the profitability of the company and also its margins,” commented Siddharth Maheshwari, Datamonitor’s R&A director of company and market intelligence.

"Bringing in Etisalat as a strategic financial investor makes a lot of economic sense for Reliance Communications Limited. If Etisalat buys the reported 25 per cent stake in the company for around INR 18,000 crores (INR 180 billion) it would immediately reduce the debt-equity level of the company to a very attractive level and will give the company the much needed financial capital to rapidly launch the 3G and other value added services," Maheshwari added.

Etisalat already has an investment in India through a joint venture with the Dynamix Balwas Group, where the UAE operator has a 45 per cent shareholding in Etisalat DB. However, it has not made much progress to date with rolling out of services. If Etisalat DB were to be part of a larger established Indian telecoms provider, it would make much more business sense.

“However, according to existing regulations the company will not be able to hold more than 10 per cent in more than two entities at the same time. Untangling this complex partnership will require some time and deft manoeuvring. The strategic financial deal, if it fructifies, will be a positive for both the companies and both of them will gain from the partnership in the long term,” commented a statement from Datamonitor.