INDIAN telecoms groups Mahanagar Telephone Nigam and Bharti Airtel are reportedly considering investing in two Zimbabwean telecoms companies.
Reports have linked Bharti Airtel, which has operations in 16 African countries, with an investment in NetOne, Zimbabwe's third- largest mobile company by subscriber numbers. Mahanagar is said to be keen to invest in the state-owned fixed network operator TelOne. Both Zimbabwean operations are owned by the cash-strapped government.
Econet Wireless is Zimbabwe's market leader by subscriber numbers, with more than 5-million customers.
Bharti Airtel's interest in NetOne comes a year after it bought the African assets of Kuwait-based Zain for $9bn.
It also becomes the second high-profile telecoms group to be interested in NetOne after MTN was reported to be also keen to pay either for a 49% stake or a link with local partners to buy a controlling interest.
Mervin Miemoukanda, a telecoms analyst at Cape Town-based firm Scott & Sullivan, said the planned investment into Zimbabwe by the Indian groups was part of their expansion into sub-Saharan Africa.
He was however "surprised" that Bharti Airtel wanted to invest in NetOne, as it was still grappling with improving the profitability of some of the African operations it acquired from Zain.
"It is a good move for Mahanagar because they are trying to extend their footprint into Africa," Mr Miemoukanda said.
"Remember, they are only in Mauritius. As an Indian company they are trying to expand into Africa. As for Bharti, it is a surprise as they are still focusing on investing in their current (African) operations," he said.
Telecom analysts say Indian companies' interest in Africa is partly in response to diversifying away from almost saturated home markets where competition has cut into their revenue, while costs continue to soar.
The other reason was in response to a similar push into Africa by Chinese companies, which have become large investors in Africa. China's telecom equipment makers ZTE and Huawei are already big suppliers to their African customers, with ZTE now running a huge presence in SA which it is using as a launch pad into Southern Africa.
Africa's potential as a market for investors is growing every year, and the Indian companies are keen not to be left behind in the rush to buy African assets.