Investcom IPO to fuel further expansion

The international mobile operator has indicated that fast growing markets such as Iraq are on its radar, as it hopes to build on the 3.3 million subscribers it has in sub-Saharan Africa and Arabian countries.

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By  Alex Ritman Published  September 19, 2005

International mobile operator Investcom is set to become one of the first companies to list on the new Dubai International Financial Exchange, set to launch on September 26. The company, which is backed by the Lebanese Mikati family, has moved its financial base to the Dubai International Financial Centre from Luxembourg, is also planning a secondary IPO of global depository receipts in London as it looks to fund plans for international expansion. Sources have suggested the 25% share offer would be worth in the region of US$750 million, putting the total value of Investcom at around US$3 billion. The company has indicated that fast growing markets such as Iraq are on its radar, as it hopes to build on the 3.3 million subscribers it has in sub-Saharan Africa and Arabian countries under its Areeba brand. Recently the operator won an 18-year mobile licence in Guinea for US$30 million. With a population of approximately 10 million, the West African nation is a good opportunity for the company, according to Investcom CEO Azmi Mikati, nephew of former Lebanese prime minister Najib Mikati. A larger market opportunity has come from Afghanistan where Investcom won one of two licences awarded by the Afghan government on September 15. Bidding as part of a consortium with the Alokozay Group of the UAE, Investcom beat a host of international partnerships, including such companies as ZTE of China and Siemens. Costing US$40.1 million, each GSM licence has a term of 15 years, renewable for a further 10, and gives Investcom access to a country of 30 million with a mobile penetration estimated at around 3%. The second licence was handed to Watan Mobile Afghanistan, a consortium comprising Al Houbi Telecom from Saudi Arabia and US companies Cellular One and GlobeCom Systems, which agreed to match the US$40.1 million bid. Two operators are already present in Afghanistan. In the two years since launch in July 2003, Roshan, owned by Cable & Wireless and MCT of the US, has built up a subscriber base of around half a million. Afghan Wireless, owned by entrepreneur Ehsan Bayat, had 361,600 subscribers at the end of June 2005. Investcom currently operates GSM mobile networks in Benin, Cyprus, Ghana, Guinea Bissau, Liberia, Syria, and Yemen, focusing mainly on countries with underdeveloped fixed-line infrastructure. The 3.3 million subscribers it had at the end of June 2005 represented a 72% increase on the previous year, pushing up half-year gross operating revenues by 44% to US$395.6 million and net profit by 22% to US$90.1 million. Operations in both Afghanistan and Guinea are expected to be commercially launched by Investcom under the Areeba brand during the first half of 2006.

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