Indian telecoms tycoon spooks investors with Africa move

NEW DELHI, March 3, 2010 (AFP) – Indian telecoms tycoon Sunil Bharti Mittal may be known for his Midas touch, but investors are questioning if his multi-billion-dollar bid to gain a foothold in Africa is a step too far. Mittal, chairman of Bharti Airtel, has seen shares of India’s biggest mobile firm tumble since he made his 10.7-billion-dollar offer for the loss-making African assets of Kuwait’s Zain telecom last month.

Mittal, stymied in two previous bids to tie up with South African flagship telecom company MTN, Africa’s largest mobile operator, has staunchly defended his latest attempt to break into the African market.

Africa represents “the most under-penetrated market in the world”, offering huge potential growth, said Mittal, who built Bharti into an Indian telecom powerhouse in just 15 years.

But that hasn’t eased worries over what India’s media has dubbed Bharti’s African safari with investors driving down the value of the company’s shares by eight percent since the bid was announced in mid-February.

Ratings agencies Standard and Poor’s and Fitch have warned about the expected heavy debt burden from the takeover, which Bharti says will be funded through borrowings.

Investors are