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China Mobile is the largest mobile operating groups in the world

According to the latest research by analyst firm Ovum, China Mobile is the largest mobile operating groups in the world in terms of proportionate subscriptions. China Mobile is followed by Vodafone and India’s Bharti Airtel.

Mai Barakat, Senior Analyst, Middle East and Africa, Telecoms (Ovum) says “Based on the rankings in late 2014, Bharti Airtel overtook China Unicom in terms of proportionate subscriptions to become the third-ranked global operator, behind Vodafone in second place, and China Mobile in the top spot, in the new edition of Ovum’s World Cellular Investors database, which provides the proportionate subscriber data for leading cellular investors, showing their equity investment in cellular network operators, as well as last-quarter subscriber data for each network.”

As China Mobile, with 633 million proportionate subscriptions at end-1Q15, and China Unicom, with 299 million, only operate in China, Vodafone and Bharti Airtel are the largest and second largest international mobile operating groups in the world, respectively, because both companies operate in multiple markets. At end-1Q15, Vodafone had 408 million proportionate subscriptions and Bharti Airtel had 314 million.

Bharti Airtel’s telecoms investments are spread across 20 countries in Asia, Africa, and Europe. The groups’ purchase of Zain Africa subsdiaries in early 2010 was its first step in pushing the group up the rankings, as it had gained a footprint in 15 new markets. Following this, Bharti continued to expand in the region: It announced the acquisition of Warid Congo in November 2013, following on from its acquisition of Warid Uganda in April 2013. More recently, Bharti Airtel signed a definitive agreement in September 2014 to acquire Essar Telecommunications in Kenya.

Barakat commented, “Bharti has successfully moved itself up from being sixth in the rankings of the top 10 global investors in 2010 to third by end-1Q15 through its focus on investing in emerging markets which it believes have the potential to develop its brand and see strong growth.”

Meanwhile, Vodafone has maintained its position as the second largest global investor over the last five years, with its main investments in Africa and Europe. America Movil and Telefonica at the end of 1Q15 ranked as the fifth and sixth largest mobile operating groups respectively.

Figure 1: Top 20 global investors and operators by proportionate equity subscriptions, 1Q15
Figure 1: Top 20 global investors and operators by proportionate equity subscriptions, 1Q15

Ovum’s research also shows that mergers and acquisitions (M&A) in the global telecoms market has fallen drastically in recent years, from a high of 67 transactions in 2007 to 21 transactions in 2014, as the sector has become more competitive and mature, leaving investors with less cash and incentive to make acquisitions. Many operators have also been spending heavily on next-generation fixed-line and 4G networks, leaving less money for acquisitions.

M&A activity did pick up again in 2013, as a result of 15 new aquisitions in the Asia Pacific region and six new acquisitions in Eastern Europe. M&A activity was higher in 2014 than in 2012 due to AT&T’s purchase of a 100% stake in Leap Wireless in the US in March 2014, Bharti Airtel’s purchase of Warid Congo in May 2014, and Hutchison Whampoa’s takeover of O2 Ireland in May 2014.

“M&A activity in 2015 only accounts for transactions in 1Q15, of which the most significant was the sale of Global Telecom’s 96.81% stake in Orascom Telecom Algeria, known as Djezzy, to the Algerian state for $2.6bn. Global Telecom, which is a unit of Vimpelcom, has kept operational control of Djezzy,” concludes Barakat.

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