Emerging market magnetism

Whether a deal does, in fact, come off between an India-based telecoms provider and South Africa’s MTN is not the point. What the discussions between Bharti Airtel and subsequently Reliance Communications with MTN signify is that the scope for cross-regional investment in the communications space is expanding. Just three short years ago, the acquisition of Celtel International in Africa by MTC Group (Zain Group) was viewed as a pioneering development, but since then the flow of cash across continents has evolved quickly.

For reputable Indian companies to be actively pursuing a stake in Africa’s communications sector is surely a good thing for all stakeholders involved. Unlike China, India’s entrepreneurial and economic development has not been catalysed by government intervention. Rather, many of the largest industrialists in India are self-made or family-made behemoths, and the export of such entrepreneurial fervour to Africa is only likely to have a beneficial impact.

In another example of how geographic borders are giving way to economic like-mindedness, on July 28, Hits Telecom is set to launch mobile services in Sao Paulo, Brazil, as part of the Bahrain-headquartered company’s plans to add 50 million subscribers by 2015.

Thus it has become clear that emerging market opportunities remain the most fruitful and the appetite for companies that are themselves based in such markets to seek further opportunities is a true coming-of-age story.

With the summer period across the Middle East historically heralding a slight slowing down in business activity, the fact that ever–increasing numbers of companies have vested interests and activities outside of the region suggests that before long the intensity of business activity in the region is likely to become perennial, arguably boosting productivity for companies and economies alike.

Following on from the inaugural issue of Comm., this month we continue to drill down to the core of strategic issues that are pertinent to all participants within the telecoms value chain. We attended the second annual MECOM event in Abu Dhabi at the end of May, at which convergence – of networks, devices, and content – was a key theme. The presence of Abu Dhabi Media Company at the show, for example, offered a clear indication of the blurring of lines between traditional telecoms and media, while the announcement of the GETMO Middle East content platform emphasised this shift.

Comm. also travelled to Amman, Jordan, where we participated in the Arab Advisors’-organised convergence conference at which many of the Middle East and Africa’s industry captains discussed issues such as the role of the Internet which is proving to be an opportunity or threat for traditional telecoms and media companies.

International Turnkey Systems unveiled its new corporate logo as it looks to energise its expansion into new geographies around the world, and Comm. was in Sharm El Sheikh, Egypt, to discover first-hand what the Kuwait-based company has on its corporate radar.

The provision of third-party voice-over- IP services remains a highly contentious issue in many parts of the emerging world as bloated incumbents look to safeguard the significant contribution to overall profits that international traffic generates. At the VoIP World Congress held in Dubai last month, Comm. sat in on a number of the sessions, with our main take-away being that regulators need to pick up the pace with respect to constructing a framework for which VoIP services can be offered by parties outside of the incumbent communications providers.

All these factors combined leave me in little doubt that business will continue at a breakneck pace over the coming summer months, as executives continue to position themselves in preparation for further industry metamorphosis, which is set to play out in the months and quarters to come.

Tawanda Chihota, Group Editor