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The consolidation of the mobile industry in Africa/Middle East continues, with Etisalat of the United Arab Emirates planning to buy a majority holding in Kuwait-based Zain for $11.7bn. This will remove the Zain brand from the map, even though it was once expected to be the major African carrier. Zain has already sold most of its sub-Saharan activities to Bharti of India, while other operators looking to be African powerhouses are Vimpelcom of Russia, which is to acquire Orascom, South Africa’s MTN and France Telecom.

With its purchase of control of the rest of Zain, Etisalat extends its global footprint to 24 markets. The combined group will have a total customer base of 150m, mainly in MEA, but also in Asia. The only country where they overlap is Saudi Arabia, where the Zain unit is likely to be divested to gain regulatory clearance.

Etisalat gains a 46% stake, which gives it control since 10% of Zain is held in treasury shares – so the acquirer gets 51% of issued share capital. The companies have set a deadline of January 15 to close the deal, which may be tough as some smaller Zain shareholders are opposing the transaction, claiming the price is too low.

One of the few African subsidiaries Zain kept after its Bharti deal, Sudan, will be the largest single unit in a combined Etisalat-Zain company. Zain Suden accounts for 28% of the group’s current customer base and 24% of revenue, with 9.7m connections in the third quarter, according to Wireless Intelligence. Zain Iraq is the second largest unit with 33% of Zain customers and 31% of revenue. Otherwise, Zain’s footprint is now mainly in the Middle East, in territories including Kuwait, Bahrain, Jordan, Saudi Arabia and Lebanon, but these markets are nearing saturation.

Etisalat's current mobile footprint covers 16 markets following an aggressive acquisition spree over the past five years, mainly in Africa but also including stakes in Indonesia's XL and Pakistan's Ufone. Its most significant asset outside its home market is its Saudi Arabian Mobily division, the second biggest cellco after STC. In 2005, Etisalat acquired Atlantique Telecom, which brought it activities in seven west African countries under the 'Moov' brand. It has additional African mobile assets in Egypt, Nigeria (EMTS) and Tanzania (Zantel), and a fixed line business in Sudan (Canar). More recently it has snapped up Millicom's Tigo mobile business in Sri Lanka and funded an Indian 2G start-up, Cheers Mobile. Its largest revenue base remains UAE.

The number of active mobile subscriptions in Africa crossed the half billion mark in the third quarter, to reach 506m at the end of September, according to Informa. This meant Africa now accounts for 10% of the world’s mobile subscriptions, with subscription numbers increasing 18% over the year to September. There is also a dramatic increase in smartphone adoption, which should make non-voice revenues rise to 20% of the total by 2014. About 60% of all cellphones sold by MTN in its stores in South Africa are smartphones, according to CEO Karel Pienaar.

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