Emirates-based Etisalat is set to expand its share in the highly competitive West African telecom market with its takeover of Vivendi's 53 percent stake in Maroc Telecom.
The €3.9 billion (US$5.3 billion) deal, signed on Monday, will let the Middle East's largest telecom operator gain access to Maroc Telecom's operations in West Africa in Burkina Faso, Mauritania and Mali.
Maroc Telecom is Morocco's largest mobile operator, according to data from Informa Telecoms & Media. Its operations will be added to Etisalat's current holdings in Benin, Cote d'Ivoire, Niger, Nigeria and Togo.
Only one in three Africans was subscribed to a mobile service in 2012, according to a 2012 Wireless Intelligence study from the GSMA trade association, highlighting a growth opportunity for regional operators that are able to extend affordable services into rural areas. In comparison, the total number of subscribers worldwide stands at 3.2 billion, accounting for 45 percent of the world's population, according to the study.
The Western Africa region had 103 million subscribers in the fourth quarter last year, according to the Wireless Intelligence study -- just under half of these residing in Africa's single largest market, Nigeria.
West Africa has been a battleground for top telcos on the continent, including Vodafone, MTN, Airtel, Orange, Tigo and Glo. Analysts say since the advent of mobile technology in Africa, West Africa has been a target for these companies due to the sheer size of the region's population.
Five years after launching commercial operations in Nigeria, Etisalat has connected 16 million subscribers on its network. Operating under the brand name Moov in Benin, Cote d'Ivoire, Niger and Togo, the telco is expected to delve deeper, as part of its expansion strategy, into the competition game among top players. Among other strategies, it is expected to leverage its cross-border advantage to push market penetration higher.
Etisalat's African operations also include those in Central African Republic, Egypt, Gabon, Sudan and Tanzania.
Etisalat's move to acquire a stake in Maroc Telecom is part of a consolidation trend among operators in Africa. Just this week, Airtel, Africa's second-largest mobile operator, announced it has entered into an agreement with Warid Group to acquire its Congo Brazzaville operation. New licenses are difficult to get, so big operators are looking to acquire existing operations.