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Credit Crisis Unlikely to Dampen Telecom Acquisitions in Emerging Markets

5:45 am on January 28, 2008 | Category: Business, Corporate, Telecom Services, Wireless

Telecom mergers and acquisitions in emerging markets like Russia, the Middle East, and sub-Saharan Africa aren’t likely to taper off in 2008, despite the ongoing global credit crisis.

â€œA large number of executives think emerging markets is the place to be,â€ explained Gavin Owston, head of European telecom, media, and technology investment banking for ABN Amro.

Virgin Mobile’s head of business development, Robert Samuelson, confirmed this trend, commenting that â€œemerging markets is really where all the action is and where all our attention is.â€ Virgin Mobile is already present in the South African wireless market, and plans to establish operations in India in the early part of this year.

As the highly-profitable wireless voice market reaches maturity in North America and Europe, regional carriers operating in developing nations have become attractive acquisition targets for established Western carriers seeking to capture new sources of income.

This newfound focus on global expansion has motivated a number of major acquisitions in recent months, most notably Vodafone Group’s $13-billion acquisition of India’s Hutchison Essar. 47% of last year’s telecom acquisitions took place in emerging markets, according to data from Thomson Financial.

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