Delta Partners expands into Africa
Dubai, June 5, 2008
Delta Partners, the Middle East and Africa’s largest telecoms advisory and investment firm, has opened up its African headquarters in Sandton, Johannesburg, signalling the organisation’s further expansion across the African continent.
Along with its new advisory presence in the region, the firm brings with it a wealth of telecoms consulting experience, which will be made available to help to bolster new and existing entrants into the region’s telecoms market.
The firm is also focussed on offering corporate finance services for such activities as mergers and acquisitions, operational structuring and equity/debt financing.
The local operations of Delta Partners will be headed by Kristoff Puelinckx, managing partner for Delta Partners, and will initially house ten staff. This is expected to grow to around 20 within 12 months.
Widely recognised as a leader in telecoms advisory and investment, Delta Partners specifically targets high growth markets with a potential for significant growth.
South Africa was chosen, in particular, as the springboard into the telecoms investor community, and as a geographical hub for the current advisory operations.
Another component of Delta Partners’ business is an equity fund ($80m Emerging Markets TMT fund), designed to offer financial backing to telecoms businesses who are seeking further growth and require the financial backing and additional industry expertise to do so.
Following the success of the fund the firm is investigating the possibility of creating an second larger fund with stronger emphasis on sub-Saharan Africa, which mirrors the structure of its first fund.
“Africa is now at a telecoms crossroad,” said Puelinckx. “On the mobile side, the growth so far has come from serving the high-to-middle income segments of the population.
“To date, however, no more than a handful of operators in the region have experimented with new and innovative business models to improve the economics of serving the very vast low-income segment of the population. We believe that the challenge, going forward, is to start serving the low-income segments profitably.”
With the interest that has been shown in a number of mobile telecommunications companies in high-growth markets (e.g., MTN and Vodacom) by investors in other developing territories, it has become apparent that opportunities exist for further investment and development.
On the fixed-line side, Puelinckx says, there has been little to no development in terms of growth, investments, or business model innovations since 2000, when the mobile market started to take the spotlight. As such, penetration is dismally low.
“However, with a wave of technological innovations in wireless broadband, combined with increased interest in Internet access and fixed-line market liberalisation, the stage is set for increased interest and investments in the fixed-line and broadband business as well,” he added.
It is for this reason that Delta Partners has expanded its reach into Africa – placing dedicated focus on what is clearly a very important growth market in telecommunications. – TradeArabia News Service