Bharti Airtel to Set up it’s Headquarters in Nairobi

Bharti Airtel plans to set up its headquarters in Nairobi, Kenya’s capital as Mr Manoj Kohli, chief executive of international operations was quoted on Dow Jones Newswires.

“The Board is pleased to report that the due diligence process has been completed and that the parties are finalising definitive agreements, which are expected to be signed in the coming days,” read part of the statement.

Zain had been looking for a buyer of its African operations since the first quarter of last year. In Feb this year it revealed that its board had accepted bid from India’s Bharti Airtel, but warned that the deal remains subject to completion of due diligence by the potential buyer and approvals from the relevant regulatory authorities.

“This potential transaction remains subject to due diligence, customary regulatory approvals and signing of final transaction documentation. There can be no assurance that a transaction will be consummated,” as stated in the Bharti’s website.

Bharti is to acquire Zain’s sub-Saharan assets for $10.7bn, excluding Morocco and Sudan. Bharti on Sunday announced that it has already secured the entire financing requirement of $ 8.3 billion for this transaction.

This as I expect, will lead to a fall in the per minute charge on the calls if Airtel will be innovative in pricing. Most tariffs in much of Africa are high compared to those in some other emerging markets. For example, zain Kenya’s lowest tariff is about $0.04 per minute, for on-net calls compared to India, where the lowest tariffs are as low as $0.01.

Bharti’s takeover of Zain’s Africa operations will place it in the league of the world’s top five biggest mobile firms and underscore Africa’s continued attractiveness to global operators looking for a presence in one of the remaining growth markets.

The division, with a footprint in 15 African countries, including Kenya accounts for 62 per cent of Zain’s 65 million subscriber base, but contributes only 15 per cent to the group’s net profit pointing to the low average revenue per user (ARPU) from the region