Etisalat and Orascom lose out

Despite making it to the final rounds of the auctions, both operators have missed out on acquistion targets, Etisalat in Armenia and Orascom in Serbia.

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By  Alex Ritman Published  July 31, 2006

Etisalat has lost the bidding for Armenian fixed and mobile operator ArmenTel. According to the Russian news agency ComNews, the 90% stake currently held by Greek telco OTE will go to a consortium consisting of India’s VTEL holdings and Knightsbridge Associates, and also believed to include Sistema Group of Russia. The Russian company is thought to be taking control of ArmenTel’s monopoly fixed-line business with the Indian and Armenian side of the consortium taking responsibility for its mobile operations. Following OTE’s announcement that it was to sell its 90% stake in April, 10 parties announced their interest, including Etisalat, Sistema, MTC of Kuwait and Belgium’s Belgacom. In June, OTE reduced the number of bidders to four, namely Vimpelcom and MTS of Russia, an Etisalat-backed consortium, and the winning group. While the amount of the winning bid is as yet unknown, the 90% stake is estimated to be worth over US$300 million. As of April 2006, ArmanTel had a fixed-line subscriber base of around 595,000 subscribers and a mobile subscriber base of around 320,000. Egyptian operator Orascom has also missed an expansion opportunity, losing out in the auction for Serbian mobile operator Mobi 63 in the Balkan country’s largest state-owned asset sale. Mobi 63, which has over two million subscribers, eventually went to Norway’s Telenor for US$1.9 billion. Telekom Austria was also involved in the auction.

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