Wataniya sets up overseas arm

Wataniya Telecom has set up a dedicated arm to coordinate its overseas units and devise future plans to grow regionally.

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By  Richard Agnew Published  September 22, 2004

Wataniya Telecom has set up a dedicated arm to coordinate its overseas units and devise future plans to grow regionally. The operator, which now has a presence in four markets in the Middle East and North Africa following the launch of its Algerian network in September, intends to use the group to exploit synergies between its regional businesses, such as vendor partnerships and value added services. The division will also be responsible for hunting new business opportunities, including licences, acquisitions and planned moves by Wataniya into technology-related sectors beyond GSM. It currently has 15 employees covering marketing, IT and finance, but could be expanded as other opportunities come up. “We don’t want each of the properties doing their own thing without any overall strategy,” says Ahmad Haleem, chief executive officer, Wataniya Telecom International. “But we won't take away their management responsibilities. The individual units are empowered to run their own companies — it's not a ‘you report to us’ thing,” he adds. The division’s creation follows a two-year phase of expansion which has seen the Kuwaiti operator pushing beyond its saturated home market and establishing GSM networks in Iraq, Algeria and Tunisia. The unit will also assess the viability of future opportunities for growth. “We’re constantly reviewing new opportunities,” says Haleem. “There is money available for acquisitions. Also, our charter is not to just look at pure GSM operations, but also technology-related opportunities that may add value to the group,” he adds. In terms of licences, the next step for Wataniya looks likely to be to expand its network in Northern Iraq nationwide. According to Haleem, the Wataniya-led AsiaCell consortium is close to achieving coverage targets which would allow it to compete with Orascom's Iraqi division in Baghdad and the country’s central area or Atheer Telecommunications, led by Kuwaiti rival MTC, in the South. Under their licensing agreements, the country’s three regional operators were to have been allowed to expand outside their zones once 80% of their roll out obligations had been completed, and after a year of their contracts had passed — in December 2004. But Wataniya says it is in discussions with Iraq’s recently formed regulator about moving into new areas sooner. It has drawn up a plan to build up its network outside the Northern region and says it could start doing so within a month. “We’ve just about completed our coverage requirements for the year,” says Haleem. “We’re having discussions with the authorities to clarify what is required of us in order to be able to go into new areas. They’re encouraging us to go to the other regions to create competition, but we want something in writing that says that we're allowed to,” he adds. The operator, however, is somewhat cautious about the move because of the regulatory situation in Iraq, which remains ambiguous concerning both the opportunity to expand nationally and the likely situation that will arise when the operators' two-year contracts come to an end. “It’s been changing so much that it's not clear. The US brought in the telecoms group that created the whole licensing process but it changes every three months so you have a new group of people to talk to,” says Haleem. “There hasn’t been anything official said about [what will happen when the licences expire]. But I'm confident because we haven't seen anything else going on and the authorities are not exactly going to tell us to pack up and go home,” he adds. Beyond Iraq, Wataniya intends to expand further but says it will retain its typically careful approach when studying licences and acquisition targets. The operator, for example, was put off Saudi Arabia's second GSM licence — awarded to Etisalat recently for US$3.5 billion — because of the likely price tag and length of time before the new entrant would be able to turn a profit. “We knew that there would be that kind of price for the licence and it's an extremely long range return on investment opportunity,” says Haleem. “We’re in the game for the long term but we're not into putting that kind of money into a new venture and waiting eight years or so to get it back,” he adds.

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