Kuwait based Zain is looking to raise US$5 billion through a stock market listing in a - currently unspecified - European stock exchange and try to acquire operators in three more African countries within a year. In an interview with South Africa based Business Day newspaper, Zain's Africa CEO, Chris Gabriel, said that his ambition is to turn Zain into one of the world's 10 largest operators by revenue and profit by 2011.

 The company got its original entry into the African market through its US$3.4 billion acquisition of Celtel in 2005 - which has subsequently been relaunched with the Zain brand name.

Gabriel told the newspaper that the company is currently assessing opportunities in seven countries and plans to whittle that down to the three most likely suspects shortly. He did not rule out the possibility of entering the South African market - which may be possible if recent rumours of a fourth mobile license tender prove to be correct. He would not comment on whether Zain may make a bid for South Africa's newest, and smallest cellular operator, Cell C.

Paying for an acquisition would not be a problem as its parent company had access to plenty of cash, Gabriel said. "The listing on a European stock exchange will provide currency for the organisation but there is no shortage of funds if we find the right acquisition," he said.

The company has built a borderless roaming facility between its African operations which would make acquisitions in neighbouring countries more appealing as that helps enlarge the contiguous network coverage.

The borderless roaming - where customers do not pay any premium for using their phones when roaming - was initially launches by Celtel in 2006 and has been expanded by Zain. The countries covered include Republic of Congo, the Democratic Republic of Congo, Gabon, Kenya, Tanzania, Uganda, Burkina Faso, Chad, Malawi, Niger, Nigeria and Sudan.

Considering how much money the company is seeking to raise from the IPO, along with its already deep pockets - speculation about entering the Egyptian market which is rich and also sits right next to the existing contiguous network would not be unreasonable. If such a move occureed, the most likely target would be MobiNil, which is listed on the Cairo stock exchange (29%) - and has two main shareholders, Orascom Telecom (33.1%) and France Telecom (36.3%). There have been strained relations between Orascom and France Telecom, with the latter initiating legal action against FT last December due to disagreement over the strategy of the company.

Source: Business Day