More Mideast M&A Mania

The Middle East continues to be a hive of telecom activity as operators in the region reach into their deep pockets to go shopping. (See Mideast Carriers Line Up Credit.)

Here are some highlights from the past week.

  • Twelve companies are vying for Qatar's second mobile operator license, having been pre-qualified by regulator icQatar. Qatar, which is set to award the license in October, is the last country in the Middle East to liberalize its telecom market. The auction has attracted the usual suspects, including Etisalat , Mobile Telecommunications Co. (MTC) , and Orascom Telecom , as well as AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ), and Vodafone Group plc (NYSE: VOD). (See Qatar Shortlists Mobile Cos.)

    Previous license auctions in the region have run into the billions of dollars -- MTC bid $6.1 billion in March for Saudi Arabia's third mobile license, and Etisalat paid $2.9 billion in July 2006 for an Egyptian license. Etisalat also shelled out $3.25 billion in 2004 to create Saudi Arabia's second mobile operator. (See MTC Bids $6.1B for Saudi Mobile License .)

    Operators have been prepared to overpay to break into those countries because, according to market research firm Analysys , the Middle Eastern mobile market presents greater potential for revenue growth than markets in Europe with similar levels of average disposable income. (See Analysys Reports on Middle East.)

  • Egypt is preparing to provide another license opportunity -- the National Telecommunications Regulatory Authority (NTRA) has set conditions for the auction of a second fixed-line licence next year, which will create a competitor to incumbent Telecom Egypt .

  • Oman Telecommunications Co. (Omantel) is preparing a bid for a majority share of WorldCall Broadband Ltd. , a wireless local loop operator in Pakistan. The operator confirms it has formed a negotiating team to bid for the company, which is valued at around $220 million. Omantel, the operator with the smallest market value in the Middle East, is on the acquisition trail as it prepares for the loss of its fixed-line monopoly later this year.

  • One of the fastest growing emerging markets, Pakistan has attracted several Middle Eastern operators looking to expand abroad. One of those, Orascom Telecom, has consolidated its ownership of Mobilink , picking up the remaining 11.3 percent indirect stake it didn't already own for $290 million. It now holds 100 percent of the operator through direct stakes held by its wholly owned subsidiaries. Orascom will fund the purchase with the proceeds from a $750 million Senior Notes issue it closed in February.

  • Saudi Oger is buying Telecom Italia (TIM) 's 10.36 percent stake in Oger Telecom for $477 million. (See Telecom Italia Sells Oger Stake.) Oger Telecom has operations in Saudi Arabia, Lebanon, Jordan, Turkey, and South Africa.

  • Saudi Telecom Co. (STC) has made its first overseas investment, paying $3.05 billion for a 25 percent stake in Maxis Communications Bhd. , which operates in Malaysia, Indonesia, and India. STC had been the only major operator in the Gulf region not to have made the move into foreign markets. (See Saudi Telecom Invests $3B in Maxis.)

  • Companies in the region have also been doing some selling. Abu Dhabi Group, based in the United Arab Emirates, has sold a 30 percent stake in Warid Telecom Pvt. Ltd. , the third largest mobile operator in Pakistan, to Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY). The deal, valued at $758 million, is "part of a strategy to support Warid Telecom's continued growth and enhance its market position," the company says. (See SingTel Buys Warid Stake .)

  • A year after its parent company Investcom was acquired by MTN Group Ltd. , Areeba Syria has merged with the South Africa-based operator. On Friday, a company controlled by Areeba Syria's directors said it had completed the sale of 64.5 million shares in the telco, which will be renamed MTN Syria. Areeba also has operations in Africa and Eastern Europe that will be rebranded as MTN companies.

  • In other financial news, Kuwaiti heavyweight MTC has denied a report in The Times that it's set to announce a £2 billion ($4 billion) IPO in London. A company spokesman was quoted by Emirates Today as saying that while the operator is considering going public on the London Stock Exchange or the Euronext early next year, a final decision is yet to be made. MTC, which has operations in 20 countries across the Middle East and Africa, is listed on the Kuwait stock exchange, but its international division -- including pan-African player Celtel International B.V. -- is privately owned.

  • On the subscriber front, two operators in particular are touting milestone figures: Etisalat's new Egyptian mobile carrier has signed up close to 1 million customers in its first 50 days of operation, while Emirates Integrated Telecommunications Co. (du) in the United Arab Emirates has surpassed 500,000 -- more than 10 percent of the population -- in its first five months.

    — Nicole Willing, Reporter, Light Reading

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