Telecom Italia receives Turk Telecom boost

Telecom Italia’s move to gain a controlling stake in Avea was boosted late last week by reports that the Italian telco’s bid for Turk Telecom is among the top six offers submitted.

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By  Tawanda Chihota Published  February 28, 2005

Telecom Italia’s move to gain a controlling stake in Turkey’s third mobile operator Avea was boosted late last week by reports that the Italian telco’s bid for a 55% stake in Turk Telecom is among the top six offers submitted. Telecom Italia already owns a 40% stake in Avea, in which Turk Telecom also holds a 40% stake. The balance is held by local banking group IS Bank. Officials at Turkey’s privatisation authority are reported to have said that together with Telecom Italia; a joint venture led by the UAE’s Etisalat; Telefonica of Spain; Saudi Arabia’s Saudi Oger; and two Turkish bidders; Koc Holding/Sabanci Holding and Oyak are the forerunners in the privatisation process. Thirteen bidders pre-qualified to participate in the privatisation process in January and have been given until May 31 to submit final bids. Since then, however, the number of interested parties has fallen to twelve following the decision by Belgian telco Belgacom in early February to withdraw from the process. Two further pre-qualified bidders – Turkey’s Mapa Inse and Malaysia’s Multi Global Link are not participating in due diligence exercise, according to local reports. This effectively rules them out of further participation in the process. Interestingly, a consortium in which Turkish cellular market leader Turkcell holds a minority stake is ranked outside of the top six bidders. For its part, the operator refuses to accept that its chances of successfully competing for the stake are in any way diminished with a company spokesman telling Comms MEA that as far as the operator is concerned, it stands a good a chance as any of the pre-qualified bidders in being awarded the stake. “Turkcell, through its 100% subsidiary Turktell remains one of 14 consortium members in a bid vehicle established to compete for the stake in Turk Telecom,” the Bahar Erbengi, head of international corporate communications at Turkcell. “As far as we are concerned, there have been no developments in our position over the past few weeks.” Turkey’s Dogan Holding, SK Telecom and Turkish Privatization Investors are the other pre-qualified parties conducting technical and financial analysis of Turk Telecom. Turk Telecom has around 19 million fixed-line subscribers, while its mobile unit Avea counted around 5.7 million users at the end of 2004.

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