Etisalat mulling bid for Lebanese telco

UAE operator may take over one of two mobile phone firms gov't is planning to sell for as much as $7bn.

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By  Daliah Merzaban Published  December 24, 2007

UAE operator Etisalat said on Monday it was considering a bid to take over one of two Lebanese mobile phone firms that the government has said it wants to sell for as much as $7 billion.

Etisalat, the second-largest publicly traded Arab telecom firm, would decide on whether to compete for Alfa or MTC Touch by the end of next month, Jamal Al-Jarwan, chief executive of Etisalat International Investments, said.

"We will decide by the end of January whether to bid, after completing our study of the market and valuations of the companies," Al-Jarwan told Reuters.

"Right now, we are studying the market, looking at what the business drivers are and what the growth prospects are," he said.

Lebanon expects to sell majority stakes in two state mobile phone firms in February and offer the rest to the public to raise as much as $7 billion, the country's telecommunications minister said in October.

The country planned to use the funds to service huge public debts of about $41 billion, or 180% of gross domestic product (GDP), Marwan Hamadeh said at the time.

Lebanon's population of about four million pay among the most expensive mobile phone charges in the Middle East, with average revenue per user of above $50 a month, Al-Jarwan said.

Mobile phone penetration in the country was about 28%, Hamadeh said in October.

"It is always appealing to buy existing assets which have a subscriber base," Al-Jarwan said.

Etisalat, which has operations in 16 countries including Egypt, Saudi Arabia and Pakistan, has been expanding outside of its home market, where mobile phone penetration exceeds 150%.

It lost a telecom monopoly in the UAE this year after Du started a mobile phone network in February.

The state-controlled firm said this month it would buy 16% of PT Excelcomindo Pratama for $438 million to enter Indonesia, the world's fourth most populous country.

In the last month, it has lost bids to enter mobile phone markets in Kuwait and Qatar after its bids came in too low. Etisalat led a group in 2006 that paid 16.7 billion pounds ($3.1 billion) for Egypt's third mobile phone licence.

"We will not be value destructive. We will only bid what we believe the asset is worth," Al-Jarwan said.

Lebanon's Western-backed ruling coalition and the pro-Syria Hezbollah-led opposition have been locked in a dispute over sharing power, virtually paralysing the country. (Reuters)

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