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Orascom Scopes Out Africa

Orascom Telecom has set up a subsidiary to handle investments in small operators in Africa and Asia

May 15, 2008

2 Min Read
Orascom Scopes Out Africa

Egypt-based Orascom Telecom has set up a new unit, Telecel Globe, to scope out investments in small operators in Africa and Asia.

Orascom Telecom runs mobile operators in six countries in the Middle East, North Africa, and Asia -- Algeria, Pakistan, Egypt, Tunisia, Bangladesh, and Zimbabwe -- and had 74 million subscribers at the end of the first quarter.

Naguib Sawiris, Orascom's chairman, has previously said the company is in talks to acquire three or four mobile licenses in Africa. In a statement filed with the Cairo Stock Exchange, Orascom says Telecel is yet to acquire any licenses.

That Orascom is looking at Africa again is a sign there's money to be made as mobile subscriber growth has taken off over the last couple of years. (See Africa Adds 65M Subs in 2007.)

Back in 2003 and 2004, Orascom sold off 11 mobile operators in the sub-Saharan region that were part of its Telecel International subsidiary because they were swamped with debt.

The five West African businesses (in Gabon, Benin, Togo, Niger, and Burkina Faso) were sold to Atlantique Telecom, which was acquired by United Arab Emirates-based carrier Etisalat in 2007. (See Etisalat Ups Atlantique Stake.)

More recently, Orascom has been making tentative moves to step back into sub-Saharan Africa, but without taking on the full load of running the operations. Last summer it was in talks with unnamed partners to set up a pan-African operator that would incorporate its one remaining Telecel unit in Zimbabwe. (See Orascom Ends Brazil M&A Talks.)

In a statement from the GSM Association touting Africa's mobile growth, Sawiris said, "Telecel Globe will be fully staffed on its own. Orascom Telecom will only support its procurement power and commercial know-how." (See GSMA Touts Africa Growth.)

Burned, perhaps, by previous experience, Sawiris added, "We call on African governments to reduce the taxation and regulatory burden on mobile users so we can maximize the positive impact of this investment."

Orascom is known for venturing off the beaten track into difficult business environments, such as Zimbabwe, where it's in an ongoing conflict with the regulator over foreign ownership rules, or Iraq where it sold its Iraqna subsidiary to Zain for $1.2 billion after it pulled out of the license auction. (See Orascom Loses Zimbabwe License, Orascom to Sell Iraqna, and Orascom Drops Iraq Bid.)

Orascom picked up North Korea's first mobile license in January, and is reportedly eyeing Cuba now that the country's president, Raúl Castro, has lifted restrictions on mobile phones. (See Orascom Wins N Korea License.)

— Nicole Willing, Reporter, Light Reading

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