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Tecom-Dubai Investment Group and the Tunisian government put ink to paper on the agreement which sees the Emirates company pay USD2.25 billion to purchase a 35 per cent stake in Tunisie Telecom.
The agreement was signed this week after Tecom and DIG held their own turf in a bid war for a stake in the Tunisian national telecoms company.
Tecom paid USD1,500 per fixed line customer for their 35 per cent shareholding of Tunsie Telecom.
The bid process started with 13 telecom operators at pre-qualification stage express an interest. These dropped to six when formal offers were presented. A competitive process ensued with Tecom outbidding French telecom operator Vivendi in the final two-horse race.
Speaking at the signing, Tecom CEO Ahmed bin Bayat said that his firm’s entry into the Tunisian market was a unique and unprecedented opportunity to form a strategic partnership.
TradeArabia News service reports that Tecom’s other overseas interests include Axcom, the largest mobile distributor in the Middle East and Interoute, a next generation IP network connecting most European countries.
In Dubai, Tecom has commercially deployed the first converged service over a single IP network offering triple play. This is welcome news for the Maltese consumer as Tecom is the preferred bidder for government’s 60 per cent shareholding in Maltacom.
Tecom has ambitions plans. The Emirates Today news service reports that by 2010 Tecom aims to have 20 million mobile subscribers throughout the Mediterranean. Their first batch of 3.4 million has been obtained through their investment in Tunisie Telecom. Maltese mobile phone users can expect to be part of this ‘club’ once Go Mobile, a subsidiary of Maltacom is owned by Tecom.
Bin Bayat did not divulge details of Tecom’s specific plans for new bids but insisted that he wanted the Tunisian market share to rise from 60 per cent to 70 per cent by the end of next year.
But Bayat’s statement that the 35 per cent stake in Tunisie Telecom will not be simply a “financial interest” is probably good news for Malta since with a 60 per cent controlling stake in Maltacom it prospects to be an active strategic partner.
Bin Bayat also spoke on exporting the Smart City concept. Apart from plans for the creation of hi-tech cities in Malta and India there are ongoing negotiations with three other countries to be completed by 2010.
Bin Bayat said Tecom and Dubai investment group may consider forming a venture company to manage international operations where the bulk of their business may be located. However, both parties seem to be happy with the current arrangement of working as separate entities.
“They understand money and we understand telecoms. That is a good combination,” Bin Bayat said.
The Dubai Government is using Etisalat and Tecom for different investments in different countries. In the first quarter this year, Tecom also invested in du, a new operator in the domestic UAE telecom market.
Bin Bayat said: “We are building an international company which will focus completely on telecoms.”
Bayat said that Tunisia was “only a start” for them and Tecom will be concentrating on the Middle East and the Mediterranean basin countries. “This will be achieved through the lookout for existing operations which will come available on the market through government privatisations.”
Maltacom falls within this category. Tecom’s thirst for more investment is welcome news for Malta, which will be benefiting from the direct investment of Tecom in Smartcity@malta.
If government goes ahead with its 60 per cent sale in Maltacom to Tecom, the Maltese telecoms company may have found the ideal strategic partner.
Tecom’s bid for the 35 per cent stake in Tunisie Telecom was calculated to be at a price earnings ratio of 34.5 times. Last Friday Maltacom was trading at a PE ratio of 16.35 times.
It still has to be seen whether government would be able to negotiate a price that is comparable to what Tecom was ready to offer for a minority stake in Tunisia.
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