Etisalat to splash $4bn on India expansion
UAE telco looking at acquisition or new licence to enter India, chairman says.
UAE telecom Etisalat said it could spend as much as $4 billion on an acquisition or a licence to enter India, the world's second largest mobile phone market.
Mohammed Omran, chairman of the Arab world's second biggest telecoms firm, said the time was ripe for a purchase.
"The market value for shares [in India] have gone down a little so it's a good time for us to consider entry," he told newswire Reuters in Abu Dhabi.
"We could spend in the range of $1 billion to $3 to $4 billion; that depends on the opportunities and on how much of a percent we buy," Omran said.
The price also depended on whether state-controlled Etisalat bought a piece of an existing operator or began a new one, Omran said.
Etisalat said earlier in April it was in talks with several Indian telecoms companies, including Spice Communications.
"Our aim is to buy into an operator that covers most of India, and Spice is one possibility," he said on Tuesday, adding that no decision has yet been made.
India has 12 firms providing wireless and fixed-line telephone services in some or all of its 23 telecom service areas to over 290 million users, and has issued 120 new licences this year.
More than eight million new mobile phone subscribers are signing up each month, reflecting a growing economy, cheap handsets and low call rates. India now has more than 250 million mobile users.
Etisalat, which has operations in 16 countries and 51 million customers, has been on a four-year, $5 billion spending spree, setting up mobile operators in Egypt and Saudi Arabia as well as buying a stake in a Pakistani unit.
In December, it said it would buy 16% of PT Excelcomindo Pratama to enter Indonesia, the world's fourth most-populous country. It is also starting an operator in Nigeria.
Omran said Etisalat is preparing a bid for a second fixed-line licence in Egypt and said the company expected its mobile operations there to become profitable by early 2010.
"We think we will make the right bid," he said of Egypt. "Because we [already] are a mobile operator, we are in a better position than others to bid for a licence."
He noted the Egyptian market was attractive due to economic developments, population growth and new services being offered on fixed-lines such as video and high-speed internet.
Etisalat's Egyptian operation now has more than 3.5 million customers and is targeting 10 million users by 2010.
Omran said the assets the company acquired since 2004 have doubled in value and are now worth $10 billion.
"Our target is that international operations contribute 20 to 30 percent of net profits in three to four years," he said, adding the segment had contributed "very little" in 2007. (Reuters)