Africa / Middle east telcoms - the market gets bigger, more competitive and valuable

Speaking at Egypt's ICT Cairo Conference in Cairo in February where Celtel had applied for a third GSM license Mohamed Ibrahim, Chairman of Celtel International, said ,

“The communications market in both the Middle East and Africa is one of the fastest developing markets in the world, especially since penetration rates are still far from those in Europe. We believe that mobile telecommunications is essential in developing the economies of these countries, while providing better means of communication for rural areas. By combining both our experience in Africa with that of MTC’s experience in the Middle East, we are confident that we can provide a competitive service for Egypt.”

Well the market just got hotter and tougher and bigger with fewer bigger players.

Lebanon's Mikati (Chairman Taha Mikati CEO 34 yr old Azmi Mikati)family, founder and owner of controlling 70.6% of Beirut based Investcom have accepted an offer of US$5.5 Bn. in cash and shares from MTN (= $19.25 per global depositary receipt,= = 5 shares, is 27 % over closing price 28/4/06 London)giving the combined group a value of US$23 Bn and a footprint over 21 countries (488 Mn people) and subscriber base up to 28 MN (said to be 9% penetration) to form the largest mobile group in Africa.This works out at US$1,120 per customer.

Deutsche Bank advised MTN and provided loans of $3.85 billion, while Citigroup Inc. advised Investcom.

Invesco sold $741 million of shares in an initial public offering in London in October last year, the biggest-ever internatial stock sale by a Middle East company.

The combined company will have an enterprise value of $23bn, compared to the $15bn value of Orascom Telecom, currently the Middle East's pre-eminent mobile operator.Investcom has franchises in five West African countries and Sudan, as well as a presence in Cyprus, Syria, Afghanistan, and Yemen. MTN has operations in 9 African countries outside SA, and is due in August to launch a greenfield operation in Iran plus the Guinea republic .Mobile users in Africa grew by 72 % to 117 million at the end of September from a year earlier, according to U.K.-based Middle East & Africa Wireless Analyst.

Orascom has about 30m subscribers, 2m more than MTN will have after the acquisition is completed.

MTN's biggest rival in Africa, Vodacom, has about 19m subscribers. Africa and the Middle East are among the industry's fastest growing regions.

Kuwait's Mobile Telecommunications Co. agreed in Fwebruary to pay $3.4 billion for African mobile-phone company Celtel International BV. Celtel has more than 5 million mobile customers in Kenya, Chad, Uganda and other African nations. MTN had bid $2.7 billion for Celtel.

Azmi Mikati, Investcom's chief executive, told the Financial Times that operating in emerging markets had "inherent risk," but that this was outweighed by their growth potential. "If you operate over 21 countries, you spread the risk," he said.

Kuwaiti mobile telcoms boom ...Postman Patel Feb 23rd

Orascom Telecom Holding S.A.E.(OTH) established in 1998, now a major player in the telecommunication market in the world. OTH is one of the largest and most diversified network operators in the Middle East, Africa and Pakistan. It is a leading mobile telecommunications company operating in seven emerging markets in the Middle East, Africa and South Asia having a population under license of 460 million in total population with an average penetration of mobile telephony rate across all markets of 11.5%. (?)

Orascom Telecom operates GSM networks in Algeria ("Djezzy"), Egypt ("MobiNil"), Pakistan ("Mobilink"), Iraq ("IraQna"), Bangladesh ("Banglalink"), Tunisia ("Tunisiana") and Zimbabwe (“Telecel Zimbabwe”). Orascom Telecom subscriber number reached over 25.5 million subscribers as of September, 2005.(See map of operations)

OTH is dedicated to provide the best quality services to its customers, value to shareholders, and a dynamic working environment for its nearly 15,000 employees.

Vodacom is an SA based pan-African cellular communications company providing a GSM service to millions of customers in South Africa, Tanzania, Lesotho, Mozambique and the Democratic Republic of the Congo. Vodacom's South African operations also offer a UMTS or 3G service.

Vodacom has a 57% share of the South African market, Africa's largest and most profitable cellular market. Vodacom's South African GSM network consists of nearly 6400 base stations and covers more than 6% of the total landmass of South Africa and 97.1% of the population. Shareholding: Telkom SA - 50%, Vodafone Group - 50%.