The growth and success of sub-Saharan Africa’s telecom sector is clearly measurable by not only assessing an increase in multinational interest but also by observing capital raisings and new strategic partnerships within the sector.

Commsupdate, recently reported that Kenya’s Wananchi Group, which offers triple-play services has confirmed that it intends to raise KES 8.9bn (USD 106m) in 2012 to fund its rollout of triple-play services across East Africa. The firm also operates in Tanzania and has earmarked Rwanda and Malawi for future connectivity.

In May 2011, Wananchi raised USD 57.5m worth of growth capital from a group of international investors including US-based firm Liberty Global Inc (LGI). Other new investors included Oppenheimer Funds and Sarona Asset Management, a Canadian emerging markets fund manager.

In another update of the ‘operational footprint’ included on its company website, LAP Green Network has indicated that it is poised to launch services “imminently” in Sierra Leone and Togo. In addition, the company plans to officially inaugurate wireless services in South Sudan. Furthermore, the Libyan telco has designated Burundi, DRC, Ethiopia, Tanzania and Equatorial Guinea as markets in which it has lined up ‘prospective’ acquisitions of either licences or mobile phone operators. In fact, the map on the website is accompanied by a mission statement whereby LAP Green declares its ambition to situate the company alongside MTN Group, Vodacom Group and France Telecom-Orange, all of which boast a strong presence in Africa.

In Southern Africa, Reuters reports that Namibia state-owned fixed phone line operator Telecom Namibia Ltd is in “advanced” talks to buy the second-biggest wireless phone carrier Powercom. Powercom, which trades as Leo, was sold by Egypt’s Orascom Telecom to banks Investec and Nedbank for USD 60m in June 2011. It however appears that negotiations were still on-going. “It’s our serious intention to acquire 100% of Powercom, but it is not a done deal yet. There are still legal and regulatory issues to sort out,” said Telecom spokesperson Oiva Angula, during an interview.

We have also been following developments in Zimbabwe where state-run cellco NetOne has commissioned a new mobile switching centre in Bulawayo at a cost of USD 45m. The switching centre will support broadband internet, mobile voice calls, traffic and is designed to improve network quality in the southern region. The new network facilities were sourced from Huawei Technologies using a loan from China Export & Import Bank.

This development comes after Econet Wireless Zimbabwe (EWZ) made an announcement last month that it had engaged Astellia, a leading provider of monitoring solutions for the optimization of mobile network QoS, to accelerate mobile broadband adoption. It is reported that Astellia signed a EUR 1m contract whereby EWZ will deploy Astellia’s vendor-independent solution on its 2G and 3G networks and will also get expert support from Astellia’s consulting team.

In conclusion, we believe these developments serve as a good signal for investors in terms of highlighting the massive potential within the sub-Saharan Africa telecoms sector. Telekom Networks Malawi (TNM) recently released a statement that it has ended talks with a potential strategic equity partner. We had suspected that South Africa’s Vodacom (majority-owned by UK-based Vodafone Group) had entered ownership talks with TNM. In the statement, TNM cites that the interested party had ‘proposed substantive amendments to the indicative offer terms outlined in its original expression of interest’. Therefore, the proposed amended terms were considered “unacceptable”. Meanwhile, TNM has partnered with Dubai-based Emitac Mobile Solutions (EMS) to introduce Research In Motion’s (RIM) BlackBerry services to the operator’s customers. Maybe, Vodacom’s failure to “paint TNM red”, could indeed be an indication of how hard it can be to get a “cheap” telco.

Imara is an investment banking and asset management group renowned for its knowledge of African markets.