Egypt's OT says Mobinil row not hurting ops
Orascom chairman claims France Telecom in the 'business of value destruction'
Orascom Telecom's chairman said on Tuesday that France Telecom, its partner in the jointly owned Egyptian mobile firm Mobinil, was in the "business of value destruction".
Naguib Sawiris' comments in a Reuters interview are the latest in an acrimonious battle over Mobinil that has involved court arbitration and interventions by Egypt's market regulator.
Sawiris said FT's head of international operations, Jean-Yves Larrouturou, was prepared for a five-year legal battle despite acknowledging that Mobinil's value would be affected.
"He is in the business of value destruction. We are not in that business and we will defend Mobinil's interests as much as we can," Sawiris said from the Cairo offices of Orascom Telecom that has operations from North Korea to Morocco.
"And I don't think the Egyptian government will watch any party trying to destroy a national company like Mobinil," said Sawiris, also OT's chief executive officer.
The rival companies earlier submitted their case to an arbitration court, which ruled that OT sell its stake in a holding company that owns 51 percent of Mobinil to FT.
The deal did not go through because OT and Egypt's regulator said the ruling also obliged FT to bid for the remaining shares in Mobinil at an equivalent price per share. FT has disputed this and the regulator has since rejected two of FT's offers.
Sawiris, a billionaire businessman, said that while the row was affecting morale at Mobinil, it had not impacted operations.
"Honestly, I must say on an operational level we have a good understanding," he said, adding the status quo could hold for years but there was also a possibility of further arbitration.
"We have tried to keep the operational issues away from shareholders until now. It's been working OK," he added.
Sawiris also said OT, the largest Arab mobile operator by subscribers, planned to launch a mobile banking operation in Pakistan this month and will list shares in two North African subsidiaries by early 2010.
"We are going to announce very soon, before the end of the month, we are going to launch our first real offering on mobile banking," he said, adding that OT's Pakistani operation Mobilink would offer M-commerce in association with Citibank .
OT is bidding to buy Royal Bank of Scotland's Pakistani operation, and Sawiris said if this deal goes through it would add value to the mobile banking initiative.
"We believe there is a lot of value of being on both ends of the formula," he said.
OT already offers money order services with Pakistan's postal service and access to bank accounts via phone.
Sawiris said OT would list between 20 and 30 percent of its Tunisian and Algerian operations, making cash available for acquisitions.
"Tunisia will happen definitely this year, and Algeria I believe will take longer, it might happen the beginning of next year," he said.
Sawiris declined to give guidance on OT's outlook for 2009, citing the Mobinil dispute and currency fluctuations in key markets.
"All we are saying is we expect this quarter to perform better than the quarter before," Sawiris said.
The firm posted a 66 percent drop in net profits in the first quarter to $72 million, blaming devaluations in Algeria, Pakistan and Tunisia for some of the decline.
OT operates in countries such as Algeria, Tunisia, Pakistan, Bangladesh, Zimbabwe and North Korea, in addition to Egypt. (Reuters)