Etisalat strikes deal to enter Afghanistan telecoms market

Etisalat, the ever-expanding telecommunications giant, is preparing to enter the Afghan telecoms market.

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By  Andrew White Published  January 29, 2006

Etisalat, the ever-expanding telecommunications giant, is preparing to enter the Afghan telecoms market. The company — which recently finalised a deal to buy a significant stake in Pakistan’s telecoms system — is in final talks with Afghan authorities to obtain the licence to operate Afghanistan’s third GSM mobile phone network. “Etisalat officials completed two rounds of negotiations with the Afghan government,” confirmed the UAE minister of communications, Sultan Bin Saeed Al Mansouri. “The results are positive and we expect that the coming months will see the establishment of the third GSM network there,” he added. Al Mansouri also revealed that UAE companies that invest in the redevelopment of Afghanistan will receive property and telecommunications concessions in return. “Afghan president Hamid Karzai told me in Kabul two months ago that our companies can enter any sector," Al Mansouri commented. “He encouraged UAE companies to participate in the development of the new Kabul.” The minister was speaking in Dubai at a conference on Defining Trade and Investment Opportunities in Afghanistan. He outlined a number of potential infrastructure opportunities for UAE firms. “We discussed the viability of getting ‘build-operate-transfer’ contracts in roads, launching a few air and marine transportation links between the two countries, and the participation of UAE banks in financial operations in Afghanistan,” he said. While Al Mansouri admitted that Afghanistan was at a “critical juncture” in its history, he also emphasised the Afghan government’s desire to attract foreign investment in order to rebuild the country’s shattered infrastructure and economy. “Of course conditions in Afghanistan are much better than in Iraq,” he said. “The Afghan government has good plans to develop the country’s economy.” The move is the latest in a series of bids by Etisalat to develop its overseas operations. Set to face competition for the first time in its home market this year, the UAE operator has built up a portfolio of investments across the Middle East, North Africa and Asia. As well as Pakistan, it holds stakes in Thuraya, the global satellite-based telecom services provider; Qatar Telecom; Zanzibar Telecom and multiple investments in Sudan. Last year, Etisalat also entered into a strategic partnership with expanding West African mobile operator Atlantique Telecom and acquired a 50% stake in the group. It also recently bid for a stake in Turkey’s telecoms market through the sell-off of GSM firm Turkcell, but was beaten by British giant Vodafone. Currently, the company is also rumoured to be considering acquiring Luxembourg-based mobile telecoms provider Millicom International Cellular, which operates networks in Iran, Africa, Latin America and elsewhere. The blossoming business relationship between the UAE and Afghanistan was underscored last week when the Dubai-based Al Yaquob Group (AYG) became the first UAE firm to sign a major deal in Afghanistan, acquiring a major stake in the InterContinental Hotel in Kabul. The arrangement represents a longer term joint venture with the Afghan government and the InterContinental hospitality chain. AYG plans to renovate the hotel and manage it alongside InterContinental International. Afghan minister of civil aviation and tourism, Dr. Zalmai Rassoul, signed the agreement in the UAE on behalf of Afghanistan's government. “We are delighted to see investments from the Gulf region for the rehabilitation of Afghanistan’s infrastructure. Afghanistan is witnessing an increasing number of visitors from all over the world, and they need to be accommodated comfortably,” Dr. Rassoul said. D.S Al Yaquob, executive chairman and founder of AYG, stressed the firm’s commitment to the redevelopment of Afghanistan, and the significance of securing the support of the Afghan government. “We have been eager to associate ourselves with any project in Afghanistan. I personally feel very proud to be part of the development of Afghanistan’s hospitality sector, which has great potential. Our aim is to offer world-class services, which are lacking in Afghanistan at present. “We desire to invest more capital in different potentially profitable sectors in Afghanistan, and plan to expand our business with four new projects in the pipeline. These projects will be jointly carried out with British and American companies in the near future,” he added. JOINT VENTURE: Etisalat’s Dubai office. It has struck an alliance with Afghanistan government alliance with Afghanistan’s government.

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