Fighting to talk

Two of Middle East's heavyweight telcos are facing off in the battle to secure Qatar's second mobile licence.

  • E-Mail
By  Andrew White Published  October 25, 2007

In the red corner: the old master, UAE-based Etisalat. Weighing in with over 20 years of experience, a US$8bn warchest, and operations in Afghanistan, Benin, Burkina Faso, the Central African Republic, Ivory Coast, Egypt, Gabon, Niger, Saudi Arabia, Sudan, Tanzania, Togo, Pakistan, and the UAE.

In the blue corner: the young tyro, Kuwait's Mobile Telecommunications Co (Zain). Rebranded, refocused and connecting people across 21 different markets: seven Middle Eastern and 14 sub-Saharan African countries.

Just last week, both Etisalat and Zain continued their headlong charge deep into the African market.

According to industry analysts, the two will most likely go head-to-head in the battle to secure Qatar's second mobile licence - the victor ending the monopoly of incumbent operator Qtel on the provision of the mobile services in the country. Two of the Middle East's heavyweight telcos are facing off, and the whole region has tuned in to watch.

"We are optimistic about the result," Etisalat International Investments chief executive Jamal al-Jarwan said last month, when it was revealed that the two companies had bid for the licence. Jarwan would not say how much Etisalat was willing to pay for the privilege, but Etisalat Chairman Mohammed al-Omran said in July the firm planned to "compete fiercely" to enter Qatar.

Despite having a comparatively high mobile penetration rate - 120% in a population of more than 628,000 people - the Qatari market is widely considered a good bet for an investor as it is a high growth environment with high average revenues per user. The country will become the last Gulf state to open its telecoms market to competition, and is expected to be receptive to a new entrant.

"Qatar is actually a small market, but its revenues are quite high compared to its small size," says Jawad Abbassi, general manager of the Jordan-based Arab Advisors Group, a consulting firm focused on the communications, media and technology markets. "It's also a market where there has been a massive population increase. Basically, when you look at the Qatari market, you shouldn't look at the current size, you should look at the how big a country it can be in the next 10 or fifteen years."

However, he is less sure that the race for Qatar will go down to the ‘big two', Etisalat and Zain. The other pre-qualified candidates for the licence are ACE Consortium, Argos Consortium, AT&T, Batelco and Vodafone, and all seven bids are currently under technical evaluation, with the announcement of the winner expected in early November. In such a cash-rich race, there's plenty of time for one of the chasing pack to shock the favourites.

"The Gulf markets are always surprising everybody," says Abbassi. "Yes, they are the big players, but you can never underestimate other groups who are eager to expand. It really boils down to how badly everyone wants it."

So who wants it? At the moment, sources close to the bidding suggest that Zain has slipped behind the leading pack. Etisalat has instead been joined at the head of the queue by Argos Consortium, whose partners include Verizon Communications, Virgin Mobile, and QInvest, part of Qatar Islamic Bank.

The mind-games have certainly begun in earnest, and in direct contrast to Etisalat's unwavering enthusiasm for the market, Zain chief executive Saad al-Barrak said earlier this month he did not expect to win the licence because the firm was not willing to overpay. It has been reported that the licence might cost more than US$300m, and Zain's reluctance to overpay chimes with the suspicion that it might no longer be seriously in the running.

"Maybe Zain's statement was a smokescreen, maybe he really meant it - who knows?" says Abbassi. "It's essentially going to be down to the bidders, and how eager they are to expand. Who knows how much they will be willing to pay?

"It's not a sure thing for the big players, because let's face it, the big players can afford to be very rational," he argues. "Sometimes you have family businesses or major groups that want to enter telecoms and are willing to pay premium prices, even over the odds, to do so. There's no way to guess - you just wait for the surprise once they open the bids."

4241 days ago
John Bright

Does your 'novella' have anything to do with this article about comms whatsoever? If you want so badly to be a journalist go and be one, or write a book (fiction?). Your above comments whether accurate or not have no place here. However I cannot resist poinitng out that the existence of benificent government in South Africa is due to it's lengthy period as a British colony or protectorate, instilling strong and fair governmental and judicial systems, as can be said for your own highly successful motherland. Of all the countries worldwide which currently have true 'democratic' governmental systems, the majority of them were at one time under British protection. Most African nations unfortunately never benefited from this and, currently pay a heavy price.

4254 days ago

A study by Oxfam International has revealed that between the years 1990 and 2005, the wars in Africa have cost USD 300 billion. They further reveal that is the exact amount of aid pumped into Africa during that period. Furthermore, conflicts cost the continent, around USD 18bn per annum.  
Africa is abjectly poor, and will continue to be so, not due to wars, but due to the absence of strong, able visionary leaders, who can transcend tribal, ethnic boundaries.  
In Africa, aid is almost seen as a birthright! Africa does not need mere dollars. It needs brilliant, selfless leaders, who place country before tribe. It needs massive investments in education, vocational training. Education should be priority No 1 for the continent. 
Take the case of Cote D’Ivoire. The root cause for of the intense poverty in Cote D'Ivoire, amongst those who grow coca, is not the corporations, or the rates they pay for coca, but the governments, which run the country haphazardly. President Laurent Gbagbo's reign of the country has been filled with vicious civil wars, curfews, and the production of the coca has in fact declined sharply. 
The political upheavals, non-availability of labor from surrounding countries, evacuation of foreign nationals in the last 5 years, have depressed the cocoa harvest. There has also been an exodus of workers from Burkina Faso and Liberia. Many farmers have abandoned their farms. The crops rotted. The output of coca has dropped by about 30%.  
When a new Prime Minister was selected about 5 years ago, his plane could not even land at Abidjan airport, because the followers of the President invaded the airfield!! Helicopters armed with French soldiers, armed to the teeth, were landing on the road in front of my house, to control swelling crowds. And from the gallery of my apartment, I could see army helicopters shooting at mobs that were indulging in looting in the streets.  
Every night when I slept in Abidjan, I did not know whether I would wake up the next morning. Every morning, in Abidjan, I woke up with the sounds of bullets echoing in my ears. In some parts of Africa, I got habituated to sleeping with a pistol under my pillow and a spare magazine at my feet, every night. Even now, if I wake up in the middle of the night, my hand immediately reflex dives under the pillow, though life is principally peaceful in my current habitat. 
It was impossible to travel to the interior areas on work. Local youngsters casually carrying guns, rifles, checking the papers of every traveler, guarded every village. These youngsters were not unformed soldiers, but village residents, self-appointed vigilantes, with their fingers perpetually on the triggers.  
A Lever 4 emergency was declared. A level 4 emergency means that the normal law and order machinery has collapsed and is unable to protect the citizens of the country. The African Development Bank, a tall skyscraper, disbursing funds in the continent, shuts its swanky offices and moves on to Tunisia. At nights, the empty shell of the building seems surrealistic, with the generators humming. The evacuation of all foreign nationals was under police/military/French troops escorts. 
All foreigners were the targets of the wrath of some political parties, though the French were the principal beneficiaries of their insults and humiliation. French citizens who were being evacuated had to face venom right till the time they boarded their flights, to depart from the country. 
“Carry your valuables with you,” is the advice given to all foreign expatriates being evacuated. What valuables can you carry during an evacuation, within 24 or 36 hours? Your valued paintings, wardrobe, books, furniture? No. When the chips are down, you just pack your passport, chequebook, some cash, and most important, your family photographs. The family photos, become the most crucial valuables, when you have to leave suddenly, with no prospect of return. And you work on the basis that all your precious paintings and dainty furniture, collated over the years, could be gone forever.  
Then life administers, one of its toughest lessons: to walk out into the cold night and never look back. 
Had it not been for the peace fostering endeavors of the Presidents of South Africa, Ghana and Senegal, Cote D'Ivoire would have seen more violence and economic decline. 
South Africa under Mr. Nelson Mandela, Tanzania under Mr. Nyere and Mr. William Makpa, and Ghana have shown great results due to enlightened leaders who have fostered good governance despite many handicaps.  
Sadly, these countries are exceptions. Therefore, even though Africa is a repository of minerals, culture, art, tradition, the world perceives the continent as an international natural zoo, where you go to a “safari” to see the “simbha”, the lion, ruling his jungles.

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