Orascom amasses $5 billion war chest

Egyptian mobile operator fails to bag India’s Hutchison Essar but cash is ready for new acquistions.

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By  Rob Corder Published  February 14, 2007

Egyptian mobile operator Orascom Telecom is sitting on a $5 billion acquisition war chest after losing out to Britain's Vodaphone in the battle to buy India's Hutchison Essar.

The company's Chief Executive Naguib Sawiris told Dow Jones' MarketWatch news wire today that it remains active in the M&A market, but will focus for the next six months on completing the integration of TIM Hellas Telecommunications, a Greek mobile phone company that it agreed to buy last week.

"We have the financial resources, but we don't want to take management's focus away while they work on the Hellas integration," Sawiris told MarketWatch.

Orascom already has operations throughout the Middle East and North Africa including Pakistan, Algeria and Bangladesh. It also controls Italy's third-largest mobile operator, Wind, and Greece's Tim Hellas.

The company has a customer base of 50 million subscribers, and hopes to double that by the end of 2007.

Industry observers say that consolidation in emerging markets is likely to accelerate, with India, China and the Middle East providing high growth opportunities for mobile operators.

China Mobile, the world's largest mobile operator by subscribers, Orascom Telecom and Kuwait's MTC are thought to be front runners.

Kuwait's Wataniya could become a target, or may itself look for small operators to acquire in order to step up into the bigger league. The company today announced it is securing funding of $1 billion for future investments.

Orascom confirmed that it was actively pursuing Indian operator Hutchison Essar, but Vodaphone had deeper pockets.

"The problem was the price. It's as simple as that. We couldn't afford what they could afford," Sawiris admitted.

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