Global Telecom Mergers

The global telecom market is prime for consolidation. So far the emphasis was on regional or local consolidation. Now the biggest service providers both in developed and developing world are itching to create a global foot print to offer a truly global and seamless wireless and telecom experience.

On the heals of Deutsche Telekom bid rumor for US operator Sprint, one hears that Bharti, the largest wireless operator in India, is interested in MTN of South Africa. MTN is the largest African operator with service in 21 countries in Africa and Middle East. MTN has 68.2 million subscribers, including 15.2 million South Africa alone. Bharti, which has grown at breakneck speed in India, is now looking to invest in other promising countries and create a footprint across a developing world. Bharti has no other option but to expand in other countries; if it does not create a multinational presence, the western telecom behemoths will capture the developing markets given time and lots of financial muscle. Vodafone is already in India, having acquired a controlling stake in erstwhile Hutch, the second largest India wireless carrier. AT&T is rumored to be eyeing a license bid in India.

Bharti move is in line with the known desire of large firms from newly rich countries like India and China and cash-rich regions like Middle East to assert themselves internationally by acquiring assets across the world.

Separately, France Telecom SA is interested in buying Swedish operator TeliaSonera AB. The global telecom consolidation is all but inevitable. It is just a matter of time. We think in few years, one will see a couple of giant wireless/telecom operators with a footprint on multiple continents offering not only a global scale but also a new level of global mobility and connectivity to their multinational clients and also to the international traveler.

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