Make It Happen

The amount of time that it is taking the Jordanian government to offload its 41.5% stake in Jordan Telecom Group (JTG) is running the real risk of impeding the telco’s development on both the domestic and regional front. Since 2003, the government has talked-up its intention to sell down its shareholding, but to date the process remains locked in consultation and negotiation.

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By  Tawanda Chihota Published  March 22, 2006

|~||~||~|The amount of time that it is taking the Jordanian government to offload its 41.5% stake in Jordan Telecom Group (JTG) is running the real risk of impeding the telco’s development on both the domestic and regional front. Since 2003, the government has talked-up its intention to sell down its shareholding, but to date the process remains locked in consultation and negotiation. France Telecom, JTG’s strategic partner with an effective 35.2% stake, is desperate to gain equity control of the operation and has made this ambition clear. Goldman Sachs, the bank charged with maximising the value of the sale of the stake on behalf of the Jordanian government has organised a road show around the financial centres of the world in order for JT’s management to meet with prospective investors. The shape and nature of the potential sale has shifted many times in the years since the government articulated its plans to divest completely in JTG and this metamorphosis continues to this point. Talk of listing part of JTG on the Dubai International Financial Exchange has made way to speculation that an 11% stake will be offloaded to Joint Investment Telecoms Company (JITCO), an entity which owns a 40% stake in JTG and which is 88% controlled by France Telecom. This transaction would hand France Telecom its coveted controlling equity stake in the Jordanian operation, affording it fresh impetus to use its investment in Jordan to spearhead further investment in the region. There is suggestion the government will then sell 3% of JTG to employees in the kingdom’s security services and negotiations over the status of the remaining 27.5% are ongoing. This included the international road show started in the middle of March with scheduled stopovers in seven countries in the Gulf as well as engagements in London, New York and Washington. It is hoped that the Jordanian government will undertake a definite course of action following the conclusion of the road show. Laurent Mialet, JTG CEO has made it clear that should France Telecom gain control of the company, the French telco would be keen to utilise it to target opportunities throughout the Levant region, the Gulf and Egypt. “In my mind, Jordan Telecom Group is or will very soon be a wholly-owned subsidiary of France Telecom,” Mialet told CommsMEA last year. Already, Mialet has expressed JTG’s immediate interest in entering markets such as Bahrain and Egypt, and the backing of France Telecom would go a long way in offering JTG the necessary firepower to compete with highly acquisitive counterparts. The deal should therefore be concluded without further delay. A part of the region where government indecision is not a potential hindrance in the telecoms space is Saudi Arabia, where last month the Communications and Information Technology Commission (CITC) issued a statement describing its plans to grant a new mobile and a new fixed line licence by the end of this year. The new licences will break the monopoly of Saudi Telecom (STC) on landline phone services and add at least a third mobile phone operator to the market, which is currently serviced by STC’s Al Jawal service and Etisalat’s Mobily. The CITC is set to publish the licensing schedule in the third quarter of this year and evaluate, select and award the new licences by the end of the fourth quarter. Earlier comments attributed to the head of the CITC, Mohammed Al Suwaiyel suggested that declining international interest in landline services could hurt Saudi plans to issue a second fixed licence and that a third mobile licence would be issued by September - possibly more than one. Saudi Arabia’s willingness to foster competition and innovation is an example to be held up across the region, and its ascension to the World Trade Organisation late last year should only drive the momentum further. ||**||

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