Investcom charts course into mature markets

Beirut-based telecoms group, Investcom Holding, has secured its first foothold in Europe with the acquisition of a licence to operate the second mobile network in Cyprus.

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By  Richard Agnew Published  November 30, 2003

Beirut-based telecoms group, Investcom Holding, has secured its first foothold in Europe with the acquisition of a licence to operate the second mobile network in Cyprus.

The company's subsidiary, Scancom Cyprus, secured the licence for CYP12.75 million (US$26million) after an eleven-round auction against Cosmote Telecoms Cyprus, a subsidiary of Greek mobile operator, Cosmote.

Both firms had pre-qualified for the licence with Atlantic Crest, the Monaco-based telecoms group.

The licence, part of Cyprus' liberalisation plans to ease potential entrance into the EU, stipulates that Scancom be set up by the start of May, 2004.

The operator will be licensed for 20 years, five of which will be on an exclusive basis.

And with the contract covering GSM, GPRS and 3G networks, Investcom has a range of technical options available.

"We will launch a full set of 2.5G (GPRS) services. [With] 3G, we're thinking at a strategic level whether to launch it from day one," says Maher Mikati, head of Scancom Cyprus.

With the government-owned incumbent, CYTA, having built up a penetration rate of around 50%, Scancom is also likely to focus on value added services (VAS) and key verticals to make an impact.

"It's going to be a tough task to compete but there is potential, especially in niche markets such as teenagers. We would also like to address the tourist market, to offer good coverage for roaming or a good service if they buy a prepaid card from us," says Mikati.

But the move also represents something of a departure from Investcom's strategy of primarily focusing on markets with low penetration but high growth potential.

"Investcom is used to going into markets where there is high risk but high returns," says Mikati.

"Cyprus will be not only our first foothold in Europe but also our first operation in a mature market. The prices in Cyprus are high, so it's a different type of country to those we are used to," he adds.

Investcom currently has a presence in various markets in the Middle East and Africa, including Syria, Yemen, Saudi Arabia and Egypt.

It is also shortlisted in the contest to purchase or manage the two mobile networks in Lebanon, Cellis and Libancell, the latter of which it partly owns.

As with other participants in the bidding, however, it has mixed views on their value.

"We're very keen to participate in the bids. We're a Lebanese company and it would be a shame not to have our flag there. [But] the issue is really political and we will not participate in that. We will assess it from an economic perspective and give a price we believe the operation deserves," says Mikati.

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