Johannesburg — CASH-flush Asian investors are scrambling to carve up Africa's telecoms market and steal a march on their western competitors, whose appetite for risk has been bruised by the effects of the global recession.

Reports this week that an Indian-led consortium was in the race to acquire a significant stake in Kuwait-based Zain, a few days after MTN and Bharti Airtel dumped a 23bn merger deal, showed that investor interest has shifted from European telecoms operators to Asian investors with a penchant for taking risks.

Major European operators in Africa are Vodafone and France's Orange. Vivendi, the French telecoms-to-media group that this year showed interest in Zain, is said to be looking elsewhere, especially Latin America.

Zain's Arab owners are reported to be keen to reduce their stake , or even to sell a majority portion if the price is right. But Asian investors had decided Africa was a market they could not ignore any more, analysts said.

Already MTN, Africa's largest cellphone operator by subscriber numbers, has been courted by two Indian companies , Bharti and Reliance Communications , although both attempts stumbled over regulatory and ownership hurdles.

With the Bharti-MTN deal off for now, attention is shifting to another major African operator, MTN's rival, Vodacom .

But Vodacom is off limits after its majority acquisition by Vodafone, and is believed to be mulling over its own expansion options .

"Africa is the place to be, despite the political and regulatory risks involved," a telecoms analyst said yesterday.

Indian state-run telecom firm Mahanagar Telephone Nigam (MTNL) is joining a consortium with another Indian firm, Vavasi, and a Malaysian investor to buy a 46% stake in Zain. It is also interested in buying a stake in Zambian telecoms firm Zamtel, according to Reuters.

There are also reports that both MTN and Bharti could be eyeing Zain. MTN yesterday declined to comment, citing its policy of not confirming speculation related to its investment and expansion strategy.

"The story of MTN and Bharti should not be seen as a one-off incident though, (and we) expect it to be the start of a trend," Frost and Sullivan ICT analyst Lindsey McDonald said yesterday.

"With the ability (of Asian firms) to offer lower prices and the gumption to take calculated risks, these companies are posing a significant challenge to their western counterparts.