Another player joins the game

The regional telecoms scene is already bustling with operators looking to get a sizeable footprint. Liberalisation has happened and the opportunities are drying up, but the number of players looking at expansion is anything but decreasing. The victory of the UAE’s TECOM in Tunisia and the emergence of the operator on the international scene means one thing: yet more competition.

  • E-Mail
By  Alex Ritman Published  April 4, 2006

|~||~||~|The regional telecoms scene is buzzing with operators attempting to create an international footprint. While the sheer number of companies looking to make their mark in new geographies continues to climb, the actual number of investment opportunities available is severely restricted as the liberalisation process matures and the availability of new licences dries up. The recent victory for UAE-based TECOM in Tunisia and the emergence of the operator on the international scene means one thing for the market: even more competition. Previously part of Dubai Holding, with operations that included Dubai Internet City and around 19,000 fixed-line subscribers in various Dubai free zones and development projects, TECOM is now positioning itself as a serious player in the regional telecommunications market. The move into Tunisia is separate from the 20% stake that TECOM holds in du, the newly formed second operator in the UAE. TECOM and du have close links, with Ahmad Bin Byat serving as chairman of both. Let’s not forget that du bought TECOM’s telecommunications arm earlier in the year for the princely sum of US$330 million (roughly US$17,000 per subscriber). In the short period since it won the auction for a 35% stake in Tunisie Telecom – beating established international players including Vivendi, France Telecom and Etisalat – TECOM has made another plunge abroad, and has been named as the Maltese government’s preferred bidder in the 60% privatisation of incumbent Maltacom. Its bid of US$258 million, plus the US$2.24 billion it put forward for Tunisie Telecom, makes a combined investment promise of over US$2.5 billion in less than a week - a considerable sum for a company with limited telecoms experience but massive ambition. Bin Byat has indicated that there is more to come, and that TECOM plans to establish its own international unit. Much like Etisalat International, this as yet unnamed company will manage overseas opportunities. Bin Byat claims there are several in the pipeline across the Middle East and Mediterranean Basin. With telecoms liberalisation well underway across the region, almost every single operator has announced that they are looking at international opportunities. The major such as Etisalat, Kuwait’s MTC and Wataniya have been spreading their wings for a few years, but now previously quiet operators such as Qtel in Qatar, and even newcomers such as Umniah, the third GSM licence holder in Jordan, want to join the fun. Quite where all the opportunities will come from to satisfy so many expansion-focused companies remains a mystery. Qatar and Palestine are the only remaining MENA countries with just one mobile licence holder, and fixed-line opportunities are scarce. One option appears to be consolidation. Rather than chasing new licences, taking the plunge and purchasing a stake in existing operators (or even buying them outright) could be the way forward. Several companies claim to have received offers, including pan-African outfit Millicom International Cellular. However, this looks like an expensive option (especially for the smaller players) when you consider the prices being paid, such as the US$3.4 billion MTC forked out for Celtel. Against this backdrop of intense interest in international expansion, the award of a third mobile licence in Egypt through auction this year is set to be a fiercely contested affair. The country’s low mobile penetration rate and large, young population has attracted the interest of nearly every regional operator, and plenty of international names too, each declaring the licence among their highest priorities. The jampacked Cairo auction room will be a veritable who’s who in the telecoms world, and with confidence brimming among all contenders, it should be a high stakes showdown with plenty of money on the table. The auction has the potential to raise a huge amount. MTC took it to the line in Turkey in the bidding for mobile operator Turkcell, finally beaten by just US$20 by Vodafone with a US$4.55 billion bid. Meanwhile, Etisalat has been playing it quiet since its drawn-out affair in the privatisation of Pakistan Telecommunications Company Limited, failing to make the final stages in Tunisia and Turkey, and could be holding back for Egypt. TECOM, however, will not be present. Bin Byat claims that TECOM’s international unit, will not be looking at greenfield opportunities, preferring instead to concentrate on investments in up and running operations. Whether it is bidding for licences or buying stakes in existing operators, the remainder of 2006 promises to be a frenetic financial affair for the MEA telecommunications sector, as operators from around the world line up alongside the indigenous players to try and grab a slice of the action in one of the world’s fastest growing markets.||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code