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DUBAI/RIYADH Jan 20 (Reuters) Saudi Telecom Co <7010.SE>, the largest Arab
telecom firm by market value, said on Sunday it had agreed a $2.6 billion deal
to buy 35 percent of Oger Telecom, gaining access to markets from Turkey to
South Africa.
Oger, controlled by the family of late Lebanese prime minister Rafik alHariri,
was in talks to sell a stake to French telecom group Vivendi after
scrapping a public share sale. The talks ended without a deal, Vivendi said in
November.
Gulf Arab telecom operators are expanding out of their home markets, where most
have been riding a wave of economic growth spurred by a fivefold increase in
oil prices since 2002.
Saudi Telecom lagged its regional rivals, making its first foreign acquisition
only last year, when it bought 25 percent of Malaysias Maxis in a $3 billion
deal that gave it access to India and Indonesia, the worlds second and fourth
most populous countries.
It was a natural step after the deal with Maxis, which opened the door to large
Asian markets with big Muslim communities, Saudi Telecom board member AbdulRahman
Mazi told Reuters.
Oger Telecom is present in two of the largest markets in Middle East and
Africa, he said of Ogers operations in Turkey and South Africa.
Oger Telecom operates in the two countries and Saudi Arabia, Lebanon and Jordan,
providing fixedline, mobile and internet services. Its parent, Saudi Oger, is a
construction company controlled by Hariris family.
PROFITABLE
Saudi Telecom secured a 26 percent stake in Kuwaits third mobile phone company
with a $908 million bid in November in its second foreign venture.
The Kuwait business has yet to start operations, while Mazi said the Maxis
networks in Indonesia and India were yet to make money.
They are still making losses but the potential is tremendous, he said.
Oger Telecoms business in Turkey and South Africa is very profitable.
Saudi Oger has been looking to sell shares in its telecom business for more than
a year.
Dubaibased Oger Telecom announced a $1.25 billion initial public offering in
2006 but cancelled it at the eleventh hour on fears that tumbling Gulf Arab
markets would hit the share price after listing in Dubai and London.
Vivendi said in September it was in talks with Saudi Oger about possibly buying
a stake in Oger Telecom. Sources told Reuters in Paris the initial stake would
be about 33 percent.
Saudi Telecom, controlled by the government of the worlds biggest oil exporter,
was the last one of the five largest Gulf Arab telecom operators to start making
foreign acquisitions.
Saudi Telecom lost its mobile phone monopoly in 2005 to Etihad Etisalat
<7020.SE> (Mobily), which had seized 40 percent market share by the end of 2007
from 30 percent a year earlier. Mobily is an affiliate of Emirates
Telecommunications Corp .
A third operator, affiliated with Kuwaits Mobile Telecommunications Co
(Zain), plans to start a network this year and Mobily says the kingdom already
has more mobile phone connections than people.
Groups headed by Bahrain Telecommunications Co. , Hong Kongs PCCW
<0008.HK> and Verizon Communications of the United States have initial
approval to operate fixedline phone networks in Saudi Arabia. (Editing by Dayan
Candappa)
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Source: http://africa.reuters.com/country/ZA/news/usnL20155371.html
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