The jinx that kept Bharti Airtel from entering the African telecom market has been broken.
The Indian telecom major finally gained entry into one of the fastest growing telecom markets through a deal to acquire the African operations of Kuwait-based Zain Telecom.
The Sunil Mittal-led Bharti had failed twice in as many years to strike a deal with another African company MTN.
The $10.7 billion Zain deal would not only pave the way for Bharti's entry into Africa, but also catapult the Indian entity into the league of world's top 10 telecom players. Bharti would be placed at seventh position with combined subscriber base of close to 170 million.
Firing up Bharti's global ambitions, the latest acquisition comes in the backdrop of diminishing revenues from its India operations due to hyper competition and rock-bottom tariffs.
The transaction, which excludes Zain's operations in Sudan and Morocco, may, however, pose challenges to Mittal in terms of turning around Zain's under-performing networks, particularly in Nigeria, the Kuwaiti company's most important market.
This is the second overseas deal for Bharti in less than three months, after a not-so-satisfying 2009 that saw the domestic player calling off its months-long discussions for a $23 billion-deal with MTN marred by regulatory hurdles.
In January, Bharti acquired a majority stake in the Bangladesh-based Warid Telecom for $300 million.
The domestic firm also has presence in Sri Lanka.
Bharti had announced exclusive talks with Zain for buying out the latter's African assets on February 15, in the backdrop of state-run telcos - BSNL and MTNL - looking to own a pie in Zain.
In 2009, the two state-run entities, seeking to get a foothold in the African market, had expressed interest in acquisition of a stake in Zain. However, later on they went slow on the plan.