France Telecom looking to partner with African telcos as well as acquire its own cellcos

France Telecom has recently focused its expansion strategy firmly on the Middle East and Africa (MEA) region, as it seeks to reduce reliance on its saturated European heartlands. CEO Stephan Richard has reiterated the policy and plans to step up M&A activity in the region, making it the most active of the established multinationals in the high growth area, but bringing the firm up against new and powerful rivals based in MEA.

Richard told Bloomberg that FT was looking for partnerships and acquisitions to bolster its MEA position and had "several targets" in mind. Most recently, the telco has bought operators in Iraq and Morocco and has repeatedly said it was interested in the troubled but potentially huge market of Democratic Republic of Congo.

Major emerging market players are also expanding in the region, and FT will have to compete for the prime territories, including DRC, with MTN, Bharti and others. Richard also believes these firms will be likely partners as most countries look for a shared network model to reduce the cost and risk of rolling out mobile broadband services. This is already seen in Kenya, where Vodafone is a strong player via its local partner Safaricom. Richard said in the interview: "There are big players in Africa, and we can have interesting dialogs and even partnerships with other players in Africa."

FT is also expected to leverage its increasingly close alliance with Deutsche Telekom to increase efficiencies. The two giants are already putting their European operations into joint ventures in some countries like the UK, and have extensive partnerships in purchasing and multinational services. DT has focused less on MEA than its partner, but could be interested in pooling resources for a push into the region. It is hoping to pull out of the US by selling T-Mobile USA, and to concentrate primarily on expansion in eastern and central Europe, but even this region is starting to saturate.

FT is also disposing of some assets in overcrowded markets, especially where it does not have a controlling stake, a strategy also being pursued by Vodafone to free up resources for emerging economies. The French giant's Swiss unit is up for sale and it is also said to be interested in disposing of its minority stakes in Orange Austria and Sonaecom Portugal.

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