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Telecoms executives keep faith in emerging markets
Wed Feb 18, 2009 12:04pm EST
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By Kate Holton and Niclas Mika
BARCELONA (Reuters) - Telecoms executives are keeping faith in emerging markets despite currency gyrations amid the global economic downturn.
Executives in Barcelona at the wireless industry's leading trade show did however expect a pause in takeover activity.
"Emerging market exposure has been challenged over the last half-year from an investor perspective," Telenor chief executive Jon Fredrik Baksaas told Reuters on Wednesday, adding fundamental drivers of growth were unchanged, however.
"Why does India have a penetration of 30 percent when most neighboring countries are at a much higher penetration level?
"For me it's quite obvious that the mobile market in India will double and that Telenor will take part in that ambition," he said.
Manoj Kohli, chief executive of India's top mobile operator Bharti Airtel, said mergers and acquisition activity would likely remain slow for the time being. "The values (of emerging market assets) are definitely better but the seller also has to be at the table," Kohli told Reuters.
"We're looking at various markets. We're looking at all opportunities but we're not in a hurry. We definitely don't want to pay more than the asset deserves to be paid, so maybe when that opportunity comes in one year or two years we'll look."
China Mobile, the world's largest mobile phone group by subscriber numbers, struck a similarly cautious note on international expansion.
DUST IN THE AIR
Alexander Izosimov, chief executive of Russian Vimpelcom, said the problem was not the long-term outlook, but valuation of emerging market assets.
"The question is now not whether the market is attractive, but how much you are willing to pay for it and what's the fair valuation," Izosimov told Reuters.
"That's where there is too much dust in the air and it needs to settle before valuation frameworks will emerge and proper assessment of risk will be priced in."
Sureyya Ciliv, chief executive of Turkey's largest mobile operator Turkcell, was unperturbed by foreign exchange volatility -- one of the countries Turkcell operates in is Belarus, which devalued its currency by 20 percent this year.
"Emerging markets ... do come with their own risks, sometimes there are devaluations, but we are in these markets for the long term," Ciliv said.
Suryanarayana Valluri, vice president communications and media for IT consulting firm Wipro was less sanguine. Continued...
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