France Telecom eyes fresh opportunities in the Middle East
JORDAN TELECOM is set to become France Telecom’s investment vehicle throughout the Levant, the Gulf and Egypt, according to its chief executive officer, Laurent Mialet. New markets such as Bahrain and Egypt are already being eyed as part of the expansion, which comes as France Telecom looks to increase its stake in the Jordanian telco.
The French telecoms giant currently owns an 88% portion of a 40% stake in Jordan Telecom, with the kingdom’s government holding a direct 41.5% share, although France Telecom has management rights. However, the Jordanian government has stated its intention to sell-down its stake and has appointed Goldman Sachs as an advisor.
France Telecom would prefer a block trade sale, and has expressed an interest in acquiring all of Jordan Telecom, bringing it wholly within the France Telecom Group. Jordan Telecom’s Mialet expects information to be published on the Jordanian government’s decision at the end of this month.
“In my mind, Jordan Telecom Group is or will very soon be a wholly-owned subsidiary of France Telecom. So we are totally linked to the future of France Telecom,” Mialet told Arabian Business.
France Telecom’s improved financial position has also freed Jordan Telecom to become more acquisitive in its outlook. As a result, Mialet said he and his management team have been given authority by the French company to seek investment opportunities throughout the Levant, the Gulf and Egypt.
“The important point is that money is back in the [France Telecom] Group. So there is money to develop products, to develop business and it is back to expansion because as the value of each market declines, the Group has to expand to ensure growth,” Mialet commented.
Jordan Telecom carries no debt and is no longer having cash drawn from it by France Telecom to consolidate its own debt, so Mialet says shareholders have been asking him and his management what they propose to do with the surplus cash.
“I will mention two countries that Jordan Telecom is looking at investing in,” said Mialet. “We are not ready to sign anything yet… but the markets we are interested in are Bahrain and Egypt. Why? Because they attacked us. Batelco and Telecom Egypt are in Jordan and we cannot accept that. So we must be offensive and go to their countries as soon as the opportunities arise and make them (Batelco and Telecom Egypt) weaker,” he added.
Last month, France Telecom announced its biggest foreign foray for more than four years with the US$8 billion purchase of an 80% stake in Spain’s third-largest mobile network operator, Amena. It follows the near collapse of the group, which was struggling under a debt mountain only three years ago.
Meanwhile, Jordan Telecom last month became the first operator in the Middle East to launch an internet-based telephony service on a commercial basis. Having originally announced the service earlier this year, Jordan Telecom intends to use it to help reinvigorate its fixed-line business. “The uptake of ADSL was three times higher in Jordan last year than in the last three years combined, and we see this new product, the Livebox, as the new residential gateway,” commented Dissa Jaimoukha, the operational marketing director of Jordan Telecom.
Through the move, residential broadband subscribers will be able to maintain their original phone lines, but will also gain a new internet telephony device with a completely new number. According to Jordan Telecom, customers will be able to reap 20% savings on monthly calls.