Orange to throw hat in SA telecoms ring?

Frost & Sullivan, the international growth consulting and research firm, forecasts the arrival of a major telecoms operator in South Africa in 2012 – with France Telecom’s Orange potentially top of the list.

“What we anticipate for 2012 is that we will see new mobile virtual network operator’s (MVNO’s) in South Africa and we predict Orange could see the market as a key destination,” said Birgitta Cederstrom, business unit leader, Africa ICT at Frost & Sullivan.

“We already know that the carrier is in talks with BCX (Business Connexion) for Mergers & Acquisition (M&A), and our prediction for 2012 is that a global telco will enter the market,” the analyst said.

A spokesperson for France Telecom-Orange however, told BusinessTech that there was currently no discussions between the group and Business Connexion.

This is contrary to media reports in September which had stated that France Telecom Orange were in discussions with South African IT services provider.

Cederstrom is of the opinion that that there is room for a new major carrier in South Africa, as further competition would benefit consumers and enterprises. “With regards to Bharti Airtel, we know that the company has a clear vision to become a leader for ICT in Africa. Cell C would be a potential entry [point],” she said.

Frost & Sullivan predicts “a lot of consolidations over the next few years,” in the country – with the first already announced on Friday through the acquisition of ATIO by Interactive Intelligence.

“We are awaiting the Orange/BCX deal and then we have KT/Telkom (TKG) as another possibility,” Cederstrom said.

In October, Telkom said it had entered into discussions with South Korean-based KT Corporation to explore KT potentially acquiring a strategic equity shareholding of 20% in the post-issue ordinary share capital of Telkom.

“We will also see smaller transactions whereby enterprises are selling off non-core divisions or assets to raise cash for core capex projects required to stay competitive. One area where we predict to see transactions are with the Internet Service Providers (ISP’s).

“We currently have over 600 registered ISP’s and the smaller ones offering niche solutions for vertical markets would be of interest for the larger ICT players to gain niche requirements, and also a footprint in SME market.”