Zain switches on network in Ghana

Kuwaiti mobile operator Zain launched a hi-tech 3.5G network in Ghana on Monday December 15, 2008 in the latest step in its plans to become one of the world’s top 10 operators by 2011, the head of its African operations said.

Zain, which already operates in 22 countries across the Middle East and Africa, has invested more than $420 million in rapidly rolling out a 3.5G network in Ghana — which the company says is sub-Saharan Africa’s first such network outside South Africa.

With 40 million customers in Africa, Zain considers the continent ripe for growth, despite claims of slow penetration, Chris Gabriel, Chief Executive Officer of Zain Africa, told Reuters in an interview in Ghana’s capital Accra.

“Africa has growth potential. We see it as a growth venture. Although penetration is very, very low, we see it as having very huge potential. A lot of people say Africa penetration is almost saturated, but we don’t because we see that we can optimise our business on the continent,” he said.

Mobile telecoms have seen rapid growth in recent years, eclipsing fixed-line communication thanks to pre-pay models and relatively light infrastructure demands.
With the Ghana launch, Zain has invested about $12 billion in Africa since 2005, and planned more in 2009, Gabriel said.

“We are close to about four or five acquisitions across the Middle East/Africa in the next 12 months,” he added.

Zain’s Chief Executive Saad al-Barrak said last month the company planned to invest up to $4 billion in four to five acquisitions in Africa and the Middle East, both by buying majority stakes in existing companies or through new licences.

“We are looking to expand. We want to become one of the top 10 global networks by 2011 with 110 million customers,” Gabriel said. Zain had 56.3 million customers at the end of September, up 54 percent year-on-year.

“We are looking at acquisitions, and in line with that we recently recapitalised our organisations in Kuwait just ahead of the financial crisis. We recapitalised to the tune of $4.5 billion, and probably we could say the economic crisis was an opportunity because the acquisition targets that we were previously looking at are now more affordable,” he said.

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Zain has been signing up customers to its new services in Ghana since last month and switched on its network on Monday.

The launch makes it the fifth active mobile operator in investor-friendly Ghana, whose teledensity, a measure of phone market penetration, is among the fastest-growing in Africa.

South Africa’s MTN ranks top with about 5 million subscribers in Ghana, followed by Millicom International Cellular’s Tigo with nearly 2.5 million.

Ghana Telecom, in which Britain’s Vodafone bought a majority stake this year, has about 1.8 million mobile subscribers, well ahead of a fourth mobile network, Kasapa, a subsidiary of Hong Kong-listed Hutchison Whampoa. A sixth licensed operator, based in nearby Nigeria, is not yet active.

Credit: Kwesi Kpodo

Source: Reuters

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