Zain to expand footprint with Paltel deal

Kuwaiti operator set to take control of Palestinian operator

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By  George Bevir Published  January 28, 2009

Zain is set to extend its reach across the Middle East with a deal to take control of Palestinian incumbent operator Paltel, with CEO Dr Abdul Malik Jaber exiting the company as part of the deal.

A statement to the Kuwait stock exchange said that Zain is “engaged in negotiations to enter a strategic partnership in Paltel”, while a similar statement on the Palestine stock exchange announced the cessation of Paltel from trading “until the completion of the strategic partnership with Zain”.

A spokesman for Zain confirmed that “advanced discussions regarding partnerships” were taking place.

He said that as a matter of policy, Zain looks to achieve either management or ownership control and that upon successful conclusion of the negotiations one or both of those conditions would be fulfilled.

“Anything we take over or acquire will be called Zain,” he added.

A source at Paltel told CommsMEA that talks had already concluded and that the operator would be rebranded ‘Zain.’

A spokesman for Paltel confirmed that the operator’s CEO, Dr Abdul Malik Jaber had resigned “contingent on the new ownership structure”.

PalTel would provide a strategic fit for Kuwait-based Zain, which already has operations in nearby Jordan and Lebanon.

PalTel, which was established in 1997 under the brand Jawwal, has a dominant position in the market without any official competitor, although some Israeli operators provide services that ‘leak’ across the border.

A second operator, Wataniya, was awarded a licence to operate in Palestine in 2006. Last year, Wataniya CEO Scott Gegenheimer said he expected to launch in “early” 2009.

Last month, PalTel warned that Gaza was at risk of a telecoms blackout after it said that the Israeli attacks had caused 90% of its network to be shut down due to combination of damage and a loss of electricity.

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