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Tuesday, 22 October, 2002, 16:12 GMT 17:12 UK
Alcatel looks to Africa
Alcatel engineers at work
Alcatel has been hit by the telecoms downturn
Troubled French telecoms eqipment firm Alcatel says it is boosting its focus on Africa, hoping to triple its sales there.

Nigeria and Angola in particular are the biggest opportunities on the horizon, said Gerald Farrenc, Alcatel's vice president for southern and eastern Africa.


We hope to be able to triple our market share in the next 18 months, using Alcatel South Africa as a hub for the region

Gerald Farrenc, Alcatel vice-president
But Africa's contribution to helping Alcatel dig its way out of a massive financial hole - shared, admittedly, by many other makers of telecoms kit - is being held up by a financing roadblock.

In the wake of the billions lost in piling debt onto the tech sector in the 1990s, the financial community has been loath to lend to operators for African network construction.

Alcatel itself is suffering from the fall in spending worldwide, and has been forced to cut its headcount almost by half.

Going wireless

Mr Farrenc's comments came as Alcatel relaunched its South African unit on 22 October, having bought out former joint venture partner Allied Technologies' 40% stake for 335m rand ($33m; �21m) earlier this year.

Only 5% of the company's business comes from Africa, but with Europe, the US and much of Asia - outside the huge Chinese market, of course - approaching saturation point, Africa could offer a way out for hard-pressed kit vendors.

Most of the continent has woeful fixed-line telecoms infrastructure, so almost every new mobile phone network has been met an enthusiastic response from customers.

The International Telecom Union says the number of users has surged to 30 million, from 2 million in 1998.

The figure is expected to top 100 million - almost a fifth of the continent's population - by 2005.

Nigeria's new Globacom operator has hired Alcatel to build its new network next year, while the recovery of the oil-rich Angola from more than two decades of civil war.

And South Africa itself opens the door to fixed-line phone competition next year, with Telkom SA's loss of its monopoly having the potential to spur extra spending.

"We hope to be able to triple our market share in the next 18 months, using Alcatel South Africa as a hub for the region," Mr Farrenc said.

Unrest

But aside from the financing issue, there remain other problems.

Political and military upheaval and rampant corruption throw up huge roadblocks to both signing deals and implementing them in a number of African countries.

In Nigeria, the bidding process for fresh telecoms licences has been delayed time and time again by such factors.

And in some countries racked by internal conflicts, shares in telecoms privatisations are thought to have formed part of the pay-off for Western mercenaries "advising" governments.

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