November 4, 2009 / 9:48 AM / 9 years ago

Millicom eyes Zain Africa assets

STOCKHOLM (Reuters) - The head of niche Swedish telecoms operator Millicom said there could be opportunities to pick up African assets of Kuwait’s Zain if that unit were broken up.

Chief Executive of Africa's Kuwaiti mobile telecommunications service provider Zain Chris Gabriel speaks during a news conference in Nairobi, November 11, 2008. REUTERS/Noor Khamis

“There could be some opportunity around a break-up of Zain Africa’s assets. It’s too big for one operator, but at a break-up there could be an opportunity,” Millicom Chief Executive Mikael Grahne told Reuters in an interview.

Millicom, a Sweden-based group which specialises in emerging markets, has been expanding aggressively although its shares took a tumble after third-quarter results because investors were disappointed by the pace of customer growth.

Zain, the Gulf’s third largest telecoms company by market value, halted talks last month to sell African assets to appease potential buyers of a stake in Zain Group.

Grahne declined to say whether Millicom was in talks with Zain. “I can’t comment on details. But there is a reasonable likelihood that something will happen around the assets.”

Grahne also saw other areas for potential growth activity.

“Then there are a few opportunities in Latin America, there is supposedly a new license coming out in Costa Rica. That is something we are also tracking.”

Grahne said there was no basis to talk Millicom could be interested in Colombia’s ETB. “No that is absolutely not true. We have zero interest in that asset.”


Grahne said the company’s goal was to grow or at least hold average revenue per user. “Our aspiration is to either grow ARPU or to hold it. That’s our internal goal, not a guidance, just our aspiration.”

Third-quarter ARPU increased by 10 cents from the second quarter in dollar terms but fell 1.4 percent in local currency.

He also said Millicom was planning for market share growth in 2010.

Asked about a license dispute in Senegal, Grahne said the company wanted to keep its market position but was not investing there. “This could be a multi-month, multi-quarter thing. Our objective during this process is to hold on to our market position, but we are not investing in growth.

Millicom had a target for an EBITDA-margin of 45-46 percent next year, Grahne said. “That is our goal.” Grahne also said Millicom needed to find other avenues for growth.

“We need to get into new businesses like medical services, savings, banking and so on. We really need to invent new products so we can get a bigger share of customers’ wallet,” he said.

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