JOHANNESBURG, South Africa-Orascom Telecom (OT) is emerging as the winning titan in the conquest of cellular operations in Africa and the Middle East. With GSM cellular licenses firmly secured in the last few weeks in the Cameroon and Niger, Orascom now boasts more than 1.5 million subscribers in 20 countries, three of them in the Middle East-Egypt, Yemen and Jordan.
The operator’s reach was extended earlier this year with the acquisition of a controlling stake in MobiLink, Pakistan’s sole operating GSM network. The total number of subscribers of all Orascom’s holdings is anticipated to exceed 2 million by 2001.
“Now that we are the largest mobile operator in the region, our next step is consolidation-to expand regional policies and to group operators into hubs of similar demographic characteristics, such as language and currencies,” said OT Chairman Naguib Sawiris. “We have not yet defined the regional hubs, but believe there will be four or five. We will centralize all our operations, which are currently run from our head offices in Geneva and Cairo.
“We are also looking at increasing our equity stakes in what we believe are some of our most important operations in Jordan, Egypt, the Ivory Coast and Zimbabwe. We are also currently holding discussions with several international operators for possible mergers and acquisitions, which will enable us to increase our stature as the leading Arab-African operator,” he said.
These potential acquisition partners include France Telecom, OT’s partner in the MobiNil Egyptian mobile consortium.
“GSM 900 is our technology of choice,” Sawiris added.
GSM 1800 MHz is currently only being deployed in Zaire. As for third-generation (3G) technologies, there is still time for decisions.
“There is no need to rush into that expensive endeavor in this region to provide luxury services with a high risk of implementation. All our operators are using second-generation GSM 900 MHz technology, which for now is a well-suited solution for Africa.”
Nigerian focus
On OT’s immediate agenda are the four cellular licenses in Nigeria. The tenders are to be issued by the end of November, and the licenses are to be auctioned early next year. With a minimum price tag of US$100 million for each license, the auction is not geared for the faint-hearted. Sawiris believes OT is entering the arena financially equipped to win.
One of its strategic moves earlier this year was to acquire the 80-percent controlling shares of the pan-African operator Telecel International at a cost of US$413 million. Through the acquisition, it added to its already profitable operations, the prime, lucrative African cellular licenses of Cote d’Ivoire and Zimbabwe. It has also taken control of Telecel’s Belgium-based satellite system, Afrilink, which carries all international calls from Telecel networks and enables the operator to maintain some control on its international traffic.
OT and Telecel have launched six mobile networks, one each in Togo, Syria (a trial network), Congo, Gabon, Chad and Benin since the beginning of the year. By the end of 2000, four more are to be launched, one each in Uganda, Burkina Faso, Yemen and the Democratic Republic of Congo.
OT listed on the Cairo and Alexandria Stock Exchange and the London Stock Exchange in July. While the initial public offering (IPO) was launched during a downturn in the market for high-tech stocks, it was still significantly oversubscribed, demonstrating the interest and support of the OT vision of the region.
In Sawiris’ words, that vision is “to become the Vodafone AirTouch of the region.”
