Poor infrastructure, fragmented markets and stiff competition mean Africa poses risks as well as potential rewards for telecom operators hunting for growth in countries like oil-rich Nigeria and post-revolution Libya and Tunisia.
With new cheaper smartphones set to drive sales, a growing corporate market, and the fact that most in Africa will use mobile phones to access the Internet and do business, many operators are seeking acquisition targets in the continent.
France Telecom and Vodafone now present on the continent could expand, but they'd have to compete with new emerging market players like Russia's Vimpelcom, South Africa's MTN or India's Bharti Airtel.
Chinese companies, which already sell telecoms equipment in Africa, could move up the value chain by buying operators or licenses. In 2010, China Mobile lost a bidding war to Bharti that saw the Indian operator snap up telecom units in 16 African countries for $10.7 billion.
But making money in Africa, one of the last remaining emerging telecoms markets not yet sown up, has proven very difficult, as some of the existing players have discovered.
The market is fragmented in 56 countries, some of which have dozens of operators, while consumers in Africa tend to spend between $1 to $10 per month on telecommunications, far less than in Europe or the U.S., but still more than in India.
Operators have also realised that the cost of running networks is high due to poor infrastructure, executives told Reuters this week at the Mobile World Congress in Barcelona.
Operators, including France Telecom, are now looking at ways to share costs through network sharing deals.
Bharti Chairman Sunil Mittal said Africa was in many ways tougher than his home market of India, itself marked by ferocious competition and unpredictable regulation.
"There are two differences between what we saw in India and Africa," he told a panel session. "One, the cost of operations is extremely high and that was a big surprise for us. And the second is that there is no middle class."
"You either have a handful of people in the affluent part of the society or you have lots of people who can't afford the services."
Colin Brereton, a telecoms expert at consultancy PWC, acknowledged that Africa held promise and peril for operators.
"Africa is where it is," he said. "That doesn't mean to say it's going to be easy or soluble in the short term. It's going to take a long time and it's going to be difficult."
Two of the most interesting markets are Libya and Tunisia, which are expected to open up after the Arab Spring.
Libya, which is struggling for stability after a bloody civil war last year, has two state-owned mobile operators, Al Madar and Libyana. The new government is expected to open up the sector by selling new licences or stakes in existing companies.
Gulf operators Qtel and Etisalat, as well as Egyptian businessman Naguib Sawiris told Reuters in interviews that they were interested by Libya, and others might jump in as well.
Tunisia is also ripe for development since it is affluent and already has decent fixed infrastructure. Its three mobile operators, two of which are partly owned by France Telecom and Qtel, are eager to launch smartphones and new services.
The new government may also revive a planned public listing of state-owned Tunisie Telecom, which was scrapped in early 2011 amid political chaos brought on by the revolution.
Meanwhile, Vodafone and France Telecom might be tempted by Nigeria since the oil-rich country is the third-largest economy in Africa behind South Africa and Egypt and offers critical scale with 160 million potential customers.
Globacom Limited, which operates in Nigeria, Republic of Benin, Ghana and Ivory Coast, has long been mooted as a target if the Adenuga family that founded it decides to sell.
Vodafone did due diligence on Globacom in 2009, according to a banker, but stepped away from a deal .
"There is real potential for a deal in Nigeria," said the banker. "If something big happens it will happen there, but foreign companies have mixed feeling about it because they are worried about the safety of their employees," the banker said.
Both Vodafone and France Telecom have said they could pick up small assets to complement their existing footprint.
France Telecom has been beefing up in Africa in recent years, buying Morocco's Meditel and Egypt's Mobinil, but recently indicated that it would slow its expansion this year.
"If there is an opportunity that comes up in 2012, we will look at it, but we don't plan to proactively seek significant deals," said Elie Girard, head of strategy and development. He added that "it would make a lot of sense" for France Telecom to be in Burkina Faso, Benin, and Togo.
However, despite the obvious appeal of Africa's rapid growth, there are also many challenges.
In a bid to shake up the market, Bharti slashed prices for consumers, and was again surprised to see that it had little impact in terms of how many calls were made or texts sent.
"We found that every time we saved money on telephony (for the consumer) it went on food," Mittal told the Congress.
Another issue that causes some pause is the unpredictable nature of regulation.
Qatar Telecom, which snapped up assets in 16 countries from Algeria to Indonesia in a rapid 10-year expansion plan, told Reuters it had in general preferred to operate in Asia and the Middle East.
"We get a lot of invitations to go and operate in Africa," Chief Executive Nasser Marafih told Reuters. "There appears to be no control over how many licences are issued. We are amazed."
The challenges are leading some to look for exits. Gulf-based operator Etisalat is weighing a sale of its weaker operations in seven markets in the French-speaking West.
"It's not that they want to sell because they need the money, but they are not that happy with the African market," said a banker who knows the company.
"A deal process hasn't really been started yet but the day they launch the sale, they will have bidders."