Sawiris to continue European comms invasion

EGYPTIAN billionaire Naguib Sawiris has revealed he is set to continue his raid on European telecoms companies. The move comes as his deal to acquire the Italian phone and internet firm Wind nears completion.

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By  Rhys Jones Published  May 29, 2005

EGYPTIAN billionaire Naguib Sawiris has revealed he is set to continue his raid on European telecoms companies. The move comes as his deal to acquire the Italian phone and internet firm Wind nears completion. A second acquisition in Europe looks likely to occur in 2007 after the takeover of Enel’s Wind has been fully digested. Furthermore, the Netherlands and Spain are believed to be Sawiris’ prime targets for the possible second acquisition. “We would like do one more acquisition in Europe,” he said at last week’s World Economic Forum (WEF) meeting in Jordan. “I need to have another foot in Europe so that when people look at my portfolio, they will see a good weight in Europe, something in the Middle East and Asia, that the portfolio is somehow balanced in geography, in risk and in quality of clients,” he added. The 50-year-old chairman of mobile operator Orascom Telecom Holding said he is confident he will beat the May 31 deadline to reach an agreement with Enel to buy Wind. The Italian company is valued at US$15.3 billion. Sawiris, who is bidding with fellow billionaire Wilbur Ross in his personal capacity and not through Orascom, intends to increase Wind’s market share in Italy to as much as 25% from 19% now. He aims to achieve this by offering better services and more competitive packages, not by resorting to a “price war,” he said. Sawiris looks set to cut costs at Wind despite the company being on track to post its first profit since 2002. Cost-cutting at Wind will include equipment supplies, now provided by Munich-based Siemens and Stockholm-based Ericsson. In February Ericsson shares suffered their biggest drop in 11 months after the company said gross margins were below analysts’ forecasts, because of costs to install new networks. “The suppliers will have to make a choice,” said Sawiris. “Either to meet the price requirements we have, in our own networks right now on the Orascom side, or we will go back to our own suppliers,” he added. Rome-based Enel is selling Wind to focus on its electricity and gas businesses. With 12.1 million mobile-phone customers, Wind is Italy’s third-biggest wireless provider, after Telecom Italia Mobile SpA and Vodafone’s Italian unit. Wind’s first-quarter earnings before interest and tax were US$92 million, compared with a US$56 million loss the previous year. Meanwhile, sales rose 8.8% to US$1.5 billion. In 2004, Wind’s loss before interest and tax narrowed to US$572 million in 2004 from US$1 billion a year earlier. During this period sales rose 7.6% to US$5.9 billion.

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