atans1

SingTel: African indirect approach is best

In India, Telecoms, Temasek on 23/02/2010 at 5:19 am

I read a media report that some analysts were querying when it didn’t invest in Africa direct, rather than allow Bharti to buy Zain’s African assets.  My tot,” what weed are these analysts on?”

Well for starters, the Indian govt would not be impressed with SingTel, Temasek and the S’pre govt if SingTel used its32% in Bharti to flow Bhart’s African ambitions which have the Indian govt’s blessing. Remember India thinks it has to counteract China’s grow influence in Africa.

And Bharti wants Africa. It made two attempts to merge with MTN,Africa’s largest telco.

If SingTel tried to use its 32% stake in Bharti to kill Bharti’s African ambitions,  SingTel, Temasek and the S’pore govmin would be the losers, just like us footie fans because the EPL bid has caused FIFA to raise the price of World Cup footie for us.

Then also SingTel’s mgt expertise is in developed couuntries — Little Red Speck and the Lucky Country.  Its ventures in India, Indonesia, Thailand, the Philippines, and Bangladesh: countries which once in trlco terms are like Africa today are thru associates where mgt are in the hands of experienced local mgrs who are not SingTel employees.   Zain is selling out partly because it can’t make serious $ in Africa. Africa generated about 45% of group revenues in the first nine months of last year but only 10% of net profits. Its managerial experience like that of SingTel is in developed telco mkts.

And would straight-laced, conservative SingTel be able (or want to or would we want it) to deal with cowboys in chaos. Example:   The privatisation of Nitel, Nigeria’s former state telecoms monopoly, is in a mess.  The Nigerian government found itself arguing with some of the preferred bidders over whether they had, in fact, bid at all. China Unicom – named as part of the winning consortium – said “it had not started any negotiations with respect to any substantive and legally binding agreements. It said its unlisted parent had not had any direct discussions with parties to the proposed privatisations. It said the European arm had been “in contact with potential bidders” for Nitel but did not name them,” according to the FT. At first, Unicom said it knew nothing of the bid.

Nope better for SingTel to let Bharti do the work. With all its experience, its share price is 11% down since the annc. of the Zain deal.  Clearly there is some concern.

If we don’t get to see the World Cup, SingTel will have a massive PR crisis on its hands in its home mkt. It doesn’t need Africa to add to its woes.

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