Bharti Airtel takes control of Zain's Africa operations

Bharti Airtel today said it has taken operational control of Zain Africa BV, the African business of Kuwait-based Zain Telecom (orginally Mobile Telecommunications Company or MTC), and will launch its brand in 15 African countries in October.

Bharti Airtel acquired 100 per cent stake in Zain Africa BV that included all of Zain's African assets (excluding Sudan and Morocco), for $10.7 billion, in June.

Under the terms of the acquisition, Zain had licensed the use of the `Zain' brand and related trademarks to Bharti, in all 15 African operations, for an interim period.

Bharti plans to invest around $800 million in Africa this year (April-March 2010-11) and expects to finance capital costs from Zain's operations in Africa.

"We have maintained that the Zain operations will be able to fund its capex and interest outgo and will not be a drag on India operations," the company said in a conference call.

Bharti is also looking at economies of scale (in network, IT services, BPO operations and sharing passive infrastructure) to bring down costs and improve profitability. Bharti aims to improve network quality before it rolls out its brand by October this year.