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    Airtel in Africa Questions

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    jlt2014
    Zain's operations in Africa present several acquisition challenges for Airtel, including a centralized and non-local culture at Zain, regulatory difficulties in African countries, and Zain's $1.7 billion debt load. The valuation of Zain at $10.7 billion would be high compared to competitors. Post-acquisition, Airtel would face additional challenges like multiple cultures, currencies, languages and political instability across African markets. Airtel's recommended actions include having local top management, enhancing revenues through scale, and increasing network sharing.

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    Airtel in Africa Questions

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    jlt2014
    191 views5 pages
    Zain's operations in Africa present several acquisition challenges for Airtel, including a centralized and non-local culture at Zain, regulatory difficulties in African countries, and Zain's $1.7 billion debt load. The valuation of Zain at $10.7 billion would be high compared to competitors. Post-acquisition, Airtel would face additional challenges like multiple cultures, currencies, languages and political instability across African markets. Airtel's recommended actions include having local top management, enhancing revenues through scale, and increasing network sharing.

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    Zain's operations in Africa present several acquisition challenges for Airtel, including a centralized and non-local culture at Zain, regulatory difficulties in African countries, and Zain's $1.7 billion debt load. The valuation of Zain at $10.7 billion would be high compared to competitors. Post-acquisition, Airtel would face additional challenges like multiple cultures, currencies, languages and political instability across African markets. Airtel's recommended actions include having local top management, enhancing revenues through scale, and increasing network sharing.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    191 views5 pages

    Airtel in Africa Questions

    Uploaded by

    jlt2014
    Zain's operations in Africa present several acquisition challenges for Airtel, including a centralized and non-local culture at Zain, regulatory difficulties in African countries, and Zain's $1.7 billion debt load. The valuation of Zain at $10.7 billion would be high compared to competitors. Post-acquisition, Airtel would face additional challenges like multiple cultures, currencies, languages and political instability across African markets. Airtel's recommended actions include having local top management, enhancing revenues through scale, and increasing network sharing.

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    Download as pptx, pdf, or txt
    of 5

    Key challenges in acquiring Zains operations in Africa?

    Zains organization culture:


    Centralized top-down approach Not aligned with local culture Weak processes: Lack of sharing of best practices among African units

    Entry hurdles into Gabon & Nigeria


    Multiple time zones, different currencies

    Key challenges in acquiring Zains operations in Africa?


    Deal and Market Perceptions Market perception:
    Regulatory difficulties in African countries Repatriation of money from African countries Lack of clarity on mobile technology in Africa

    Zains debt of $1.7 bn as on 31st Dec 2009 Valuation of USD 10.7 billion =>
    USD 255 per subscriber ( Total subscribers 41.89 mn) 3.6 times revenue 11.6 times EBITDA against

    6.5 times of EBITDA for Bharti Airtel 6 times of EBITDA (2009) for MTN (Competitor in African Market)

    Key Challenges in Africa in recent times


    Challenges post Acquisition Multiple Cultures Multiple time zones Different currencies Different Language Political Instability Recommended Action for Airtel As few expatriates as possible Have most top management from Africa Strong people management

    Principal repayment to start after 2.5 years for the loan of $8.3 bn Annual Debt Servicing cost $ 200 mn to be served by African Operations

    Enhance revenue Avail economies of scale

    Key Challenges in Africa in recent times


    Challenges post Acquisition Recommended Action for Airtel

    Different Regulations: Governments controlling the tariffs Infrastructure Sharing: Big operators unwilling to share network

    Move from fixed cost model to variable cost model Visible increase in network sharing in the markets of Nigeria, Ghana & SA; Likely to pick up in other markets Get into network sharing with big operators

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