Zain Africa expects savings after outsourcing

CAPE TOWN, AFRICA: Kuwaiti mobile firm Zain would save 30 percent year-on-year in its first year of outsourcing key aspects of its African business to help weather the downturn, its Africa chief said Wednesday.

As part of efforts to weather the global economic downturn, Zain has embarked on a restructuring programme that has seen it outsourcing its network building, operations and information technology systems.

"Through the deals we are doing at Zain we are going to realise in the first year of operations, savings approaching 30 percent year-on-year -- which is phenomenal," Chris Gabriel, Zain Africa Chief Executive Officer, said at an African telecommunications conference.

Gabriel said it was up to Zain's shareholders to decide whether the group's Africa assets should be sold.

"What I'm saying is Zain Africa is the growth engine of the Zain group... and whether the shareholders want to sell that's entirely up to them," he said.

Zain, the Gulf's third largest telecoms company by market value, halted talks last month to sell African assets to appease potential buyers of a stake in Zain Group.

The group, which plans to become one of the top 10 global mobile operators by 2011 with 110 million customers, has cut sales forecast by $1 billion due to the global financial crisis.