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China Mobile CEO mulls buyout in Africa

2010-06-28 11:06

China Mobile, the world's largest mobile-phone carrier, is looking for acquisitions in Africa but does not have any targets at the moment, its chief executive told Reuters on June 26.

The company would be willing to take either a minority or majority stake in a local African operator, Wang Jianzhou said on the sidelines of the Fortune Global Forum in Cape Town.

He also said he expects subscriber growth to keep the same pace for the rest of the year as in the first quarter.

"We pay much attention to the African operators, but we don't have a target company currently ... It is not easy to get an agreement for M&A (mergers and acquisitions). We can have a majority, we'd also like to be the minority," he said.

Fast-growing Africa is increasingly a focus for wireless operators in developed markets, due to its quickly rising middle class and relatively low mobile-phone penetration.

But the continent is also seeing stiffer competition among wireless carriers.

MTN Group, Africa's largest mobile-phone operator, is facing a threat from India's Bharti Airtel, which recently bought the African operations of Kuwait's Zain

Bharti said this month that it plans to spend a total of $350 million in the next three years to improve its networks in Uganda, Zambia and Malawi.

Wang declined to say if China Mobile had considered acquiring the sub-Saharan assets of Egypt's Orascom Telecom, which may have been part of MTN's recent failed acquisition talks with Orascom.

While China is the world's biggest mobile market, with around 700 million subscribers, operators there face stiff competition and have been forced to chase less lucrative subscribers in smaller cities to maintain growth.

China Mobile added an average of 5.5 million users per month in the first quarter, lower than the average of 6.6 million a year earlier. Wang told Reuters he expects that pace to continue for the rest of the year.

"I think there will be no big changes from now to the end of this year, because the rural areas still have huge potential. The pace will continue."

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