Israeli telecom firm enters Africa market

After years of staying away from the African market, Israel-based ECI Telecom has entered Uganda, with plans to use it as a launch pad for further investment in the region.

The investment in Africa by ECI Telecom is expected to increase competition in the provision of mobile and internet communication by Middle East telecom operators, which are pushing to get a slice of the remaining African mobile market. Despite Uganda already having seven operators including MTN, Warid Telecom and Orange Telecom, ECI Telecom has decided to invest in the country with a promise for better telecom and Internet services through massive investment in infrastructure development.

As with many other telecom companies from Europe and Asia investing in Africa, ECI Telecom is using Uganda as a stepping stone for further investment in other African countries. ECI Telecom, known as a leading supplier of networking infrastructure for carrier and service providers, also offers mobile telecom services and has a presence in many emerging market including India, South East Asia and former Soviet Union.

Africa’s improving telecom infrastructure, rising personal income and growing middle class are among the major attractions for international telecom companies. Despite corruption involved in the acquisition of operation licenses in some countries, Africa remains an indisputably profitable region for the mobile phone business.

“The communication industry drives the countries’ gross domestic products and need to be support with the right incentives including infrastructure development,” Airtel Zambia Managing Director Fayaz King said.

The ability by Middle East telecom companies to take calculated risks in investing in the African region is however, seen as a significant challenge to European companies that have slowed down their investment in the region. Vodafone and France’s Orange telecom are the major European mobile service providers operating in Africa.

Source – Nigerian Compass