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Kurt Sansone
The two-horse race for the sale of government’s 60 per cent shareholding in Maltacom, valued at around Lm133 million at current market prices, could turn out to be an interesting affair as both consortia, led by Tecom Investments and OgerTelecom respectively, are also bidding for a 35 per cent stake in Tunisie Telecom.
The final bids for the Tunisian government’s 35 per cent shareholding in Tunisie Telecom are expected to be submitted by 17 March and both OgerTelecom in partnership with Telecom Italia and Dubai-based Tecom Investments are reported to be interested in the sale. According to media reports the bidder will eventually be allowed to purchase a further 16 per cent shareholding over a period of time to give it majority shareholding.
The privatisation of Maltacom is currently well on track with the Privatisation Unit evaluating the bids submitted by Tecom and OgerTelecom.
The timing of negotiations is crucial since parallel developments, unrelated to Maltacom’s privatisation could influence the final deal.
The part-privatisation of Tunisie Telecom and the reported interest of the only two bidders still in the race for government’s shareholding in Maltacom is a development that either of the Arabian companies can use in their bargaining power with government according to industry observers.
The Tunisian bid also shows that the Arabian companies are hungry for expansion and have the cash to go for growth. According to banker Tom Willet of ABN Ambro, telcos from the Middle East are a very active source of capital aimed at Western European technology, media and telecommunications. “We’ve only seen the beginning of their appetite,” Willet said during Telecom Finance 2006.
Like it did in the privatisation of Turk Telecom last year, Saudi Arabian-based OgerTelecom is partnering with Telecom Italia for both the Tunisian part-privatisation and the Maltacom bid.
The Saudi Arabian bid for Maltacom is particularly attractive because Telecom Italia already owns 50 per cent of the telecommunications backbone between Malta and Sicily; Maltacom owns the other half.
Recently published financial results show that Telecom Italia is in a very healthy position both in the Italian market and overseas. The company is also part-owner of an underwater cable link between Tunisia and the Italian mainland.
But observers point out that the more interesting development is the recently announced mega project Smartcity@Malta. The principle investor currently negotiating with government for the creation of this hi-tech internet city at the Ricasoli Industrial Estate is Tecom Investments, which is also in the running for Maltacom.
Although both initiatives are officially distinct from each other, the common presence of the Dubai investors has created ripples in the market. In Dubai Internet City run by Tecom Investments in the United Arab Emirates (UAE), the company has the special privilege of being the sole communications provider despite the monopoly position of telecoms company Etisalat in the UAE.
Government was supposed to sign the heads of agreement with Tecom Investments over the Ricasoli investment some time this week according to what Investments Minister Austin Gatt told The Times in an interview. The signing of any agreement with the Dubai investors over the internet city is of crucial importance to the timing of Maltacom’s deal.
Government has already announced it will have a five to 10 per cent stake in Smartcity@Malta and despite government’s insistence that Maltacom’s privatisation has absolutely nothing to do with the Ricasoli development, observers are particularly keen to see what type of arrangement will be reached with Tecom Investments.
Ricasoli is also home to Maltacom’s Innovate Centre, which according to the company’s web site is a data centre connected to a “state of the art gigabit network” offering “cost-effective and totally integrated IT solutions” to predominantly business customers.
It still has to be seen what the status of Innovate will be during negotiations with Tecom Investments both as the promoters of ‘Smartcity’ and bidders for Maltacom.
ksansone@mediatoday.com.mt
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