29th June 2007
Telecom Italia sells its stake in OgerTel for US$477 million
Telecom Italia has signed an agreement for the sale, to Saudi Oger Ltd, of its 10.36% stake in Oger Telecom (OgerTel), held through TIM International, for a total price of US$477 million. The agreement also includes the removal of a Telecom Italia commitment for US$150 million.
The transaction, which should be completed by the end of July, will result in a reduction of approximately €470 million in Telecom Italia's net debt and will have a positive impact of €90 million on its profit and loss, the company said in a statement.
Telecom Italia said the decision to sell the Oger Telecom shares is part of the Telecom Italia Group’s strategic plan to rationalise its portfolio of shares in non-strategic assets. Telecom Italia's business plan for 2007-2009 foresees the sale of €1 billion on non-strategic assets.
Dubai-based OgerTel is a regional ISP in Saudi Arabia, Lebanon and Jordan, operates fixed-line, mobile communications and Internet access businesses in Turkey, and mobile communications in South Afica.
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29th June 2007
Greek government completes sale of 10.7% of OTE
The Hellenic Republic has successfully completed the sale of common shares of Hellenic Telecommunications Organisation (OTE) via an accelerated book build to international and Greek qualified investors via a private placement.
52,446,092 shares, representing 10.7% of OTE’s share capital, were placed at €21.40 per share.
All the shares offered are existing shares listed on the Athens Exchange and currently held by the Hellenic Republic.
Apart from serving as a full service telecommunications group in Greece, OTE has stakes in the incumbent telecommunications companies of Romania and Serbia, and has established mobile operations in Albania, Bulgaria, the Former Yugoslav Republic of Macedonia and most recently in Romania.
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29th June 2007
Cricket selects Alcatel-Lucent for new market and network expansion project
Cricket Communications, a wholly-owned subsidiary of Leap Wireless International, has selected Alcatel-Lucent to help expand its network into new markets across the US, using Cricket's new Advanced Wireless Services (AWS) spectrum, and upgrade existing markets. Under the terms of the five-year agreement, Cricket has committed to purchase up to US$126 million worth of equipment, services and software.
Under the terms of the agreement, the new market expansion includes the deployment of 3G CDMA2000 1xEV-DO Revision A (Rev. A) technology. The CDMA2000 1xEV-DO Rev. A network will enable Cricket to provide its customers with new mobile high-speed data services, such as VoIP, Internet access, mobile video telephony, music and other multimedia applications.
Alcatel-Lucent also will provide its CDMA2000 1X equipment as part of this deal so that Cricket can continue to provide circuit-switched mobile voice services. Alcatel-Lucent services will provide installation, engineering, training and technical support.
In addition, Alcatel-Lucent will provide its IP/MPLS solution, which includes the Alcatel-Lucent 7750 Service Router and 7450 Ethernet Service Switch, to deploy an IP routing and IP RAN backhaul solution.
EV-DO Rev. A continues the evolution of CDMA2000 technology, bringing increases in efficiency, data speeds and capacity to existing CDMA2000 1X and 1xEV-DO networks. EV-DO Rev. A enables users to receive data (forward link) at speeds up to 3.1Mbit/s and send data (reverse link) at speeds of up to 1.8Mbit/s. These increased forward and reverse link data speeds reduce data latency and will enable Leap to deliver multimedia services.
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29th June 2007
Covad announces cost reduction actions
Covad Communications, a national provider of integrated voice and data communications, has announced it is reducing its workforce by approximately 8% in the second quarter to further streamline the business and improve the financial performance of some of the company’s product lines. The company estimates that it will take a restructuring charge of approximately US$1.5 million in the second quarter. The net savings in the second half of 2007 associated with this workforce reduction, after restructuring charges, is expected to be approximately US$4 million.
“We continue to pursue opportunities to manage our business more efficiently. These actions help to position the company for improved financial results in the second half of 2007 and in 2008,” said Charles Hoffman, Covad President and Chief Executive Officer. “Our focus continues to be on achieving profitable growth and delivering shareholder value.”
Covad offers DSL, VoIP, T1, broadband wireless, Web hosting, managed security, IP and dial-up, and bundled voice and data services directly through its network and through ISPs, value-added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users. Covad broadband services are currently available across the nation in 44 states and 235 metropolitan statistical areas (MSAs) and can be purchased by more than 57 million homes and businesses, which represent over 50% of all US homes and businesses.
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28th June 2007
Altech granted broadband licence in Rwanda
Allied Technologies Ltd (Altech) has announced that Altech Stream Rwanda, one of its African subsidiaries, has been granted a licence to deliver broadband Internet access services in Rwandan cities.
The Altech Stream Rwanda licence, which provides the rights to deliver comprehensive broadband services using both WiFi and WiMAX, as well as dedicated spectrum usage rights in the 2.5GHz, 3.5GHz and 15GHz bands, also includes the rights for Altech Stream to install its own satellite earth station for direct connection to the worldwide web.
Altech CEO, Craig Venter, said: "The services to be offered in Rwanda will include access to the Internet, e-mail services and value-added ISP services. Pent-up demand is evident amongst customers in the business and consumer segments, whilst government and foreign institutions in the educational, diplomatic agencies and embassy offices have indicated their need for quality Internet-based services."
Altech Stream Rwanda is a venture incorporated specifically for this purpose in Kigali, the capital of Rwanda. Its shareholders include Altech Stream Holdings (Pty) Ltd, a wholly-owned South Africa-based subsidiary of Altech and SK Telecoms SARL, a specialist telecommunications company in Rwanda.
The licence provides the network operator with the right to deliver commercial Internet services, use specific channels of frequency spectrum and operate its own international gateway to gain bulk access to the Internet in the UK/Europe and the US.
Venter further commented that Altech was principally attracted to Rwanda due to its market potential, efficient government agencies and central role it could play in Altech's strategy of penetrating the East African region. "Rwanda is viewed as a potential bridgehead for the launch of similar operations in other countries in the region, including Kenya, Uganda and Tanzania, all of which display attractive levels of broadband market potential," said Venter.
Altech Stream Rwanda has commenced the engineering designs of the broadband infrastructure and believes its Kigali network will be operational before the end of 2007.
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28th June 2007
Hellenic Republic announces offering of up to 10.7% of OTE
Hellenic Telecommunications Organisation (OTE), the Greek full-service telecommunications provider, has been informed that the Hellenic Republic has announced a further step in its privatisation programme through the planned sale of common shares of OTE via an accelerated book build to international and Greek qualified investors via a private placement.
The size of the offering is up to 52,446,092 common shares, or 10.7% of the company's outstanding share capital. All the shares to be offered are existing shares listed on the Athens Exchange and currently held by the Hellenic Republic.
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28th June 2007
SingTel and Warid Telecom announce strategic partnership in Pakistan
Singapore Telecom (SingTel) and Warid Telecom (Pvt) Ltd have entered into a definitive agreement subsequent to which SingTel will acquire a 30% equity stake in Warid Telecom for an estimated US$758 million. Completion of the purchase is conditional upon the fulfillment of certain conditions precedent.
In just two years from its commercial launch in 2005, Warid Telecom has reached nearly 9.7 million in reported subscriber numbers, representing an estimated market share of 16.6%, and making it the third largest mobile operator in Pakistan, as of April 2007.
With a large population in excess of 160 million growing at over 2% per annum, and a young median age of 20 years, Pakistan represents the sixth largest population base in the world. Fuelled by foreign direct investment, its economy has seen strong growth over the past few years. With a current low mobile penetration rate of 36%, and a strong regulatory regime, the Pakistani cellular market is one of the most attractive in the world and has recently attracted sustained interest from international telecommunications operators.
SingTel will invest US$758 million (subject to closing adjustments on completion of the transaction) to acquire a 30% stake in Warid Telecom, valuing the company at an enterprise value of US$2.9 billion. The investment is being made as part of a strategy to support Warid Telecom’s continued growth and enhance its market position. The purchase will be satisfied through SingTel’s internal and/or external sources of funds.
Warid Telecom is part of the Abu Dhabi Group, led by HH Sheikh Nahayan Mabarak Al Nahayan, a senior member of the Emirate of Abu Dhabi’s ruling family.
This latest investment in Warid Telecom will further strengthen SingTel’s position as the leading force in the Asia Pacific mobile market. Including Warid Telecom, SingTel, together with its associated companies, will have a major presence in eight regional cellular markets with a total of more than 130 million subscribers.
SingTel’s Group Chief Executive Officer, Ms. Chua Sock Koong, said: “SingTel has made substantial investments in markets with high growth potential in South Asia, such as India and Bangladesh. Warid Telecom in Pakistan is a natural fit. It is also an attractive business with strong brand recognition. The management of Warid Telecom has established an impressive operational track record, turning EBITDA-positive in only 17 months after its commercial launch. We see strong upside in terms of the company’s performance and look forward to its continued contribution towards the development of mobile communications in Pakistan.”
Warid Telecom launched its services in May 2005 and has sustained a very rapid expansion since. The company has a 15-year licence to operate GSM-based mobile services in Pakistan, Azad Jammu and Kashmir, and the Northern areas. Warid Telecom is part of Warid Telecom International (WTI), a telecommunications group set up in 2004 to acquire, own and operate telecommunications assets in the emerging markets of Asia and Africa. In addition to its operation in Pakistan, WTI successfully launched its operation in Bangladesh in May 2007 with half a million subscribers acquired in less than two months. Furthering its international expansion in its target markets, WTI has acquired licences in Congo Brazzaville and Uganda and is preparing to launch its operations in these two markets in the second half of 2007. Through its subsidiary Wateen Telecom, the Group also operates a 5,000 km fibre-optic backbone in Pakistan and is launching a WiMAX service in addition to the long-distance and international (LDI) service it currently offers.
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28th June 2007
TeliaSonera reportedly in talks to acquire MCT assets
TeliaSonera AB, through its Fintur Holdings BV unit, is completing talks to acquire the Central Asian assets of US-based MCT Corp, according to Dow Jones Newswires, quoting news agency, ComNews.
Citing unnamed sources close to MCT, the agency said Fintur, part-owned by Turkcell Holding, was expected to pay approximately US$400 million for 99% of Uzbek mobile operator Coscom, majority stakes in Tajikistan's Indigo and Somoncom, as well as 12.25% of Afghanistan's Roshan.
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27th June 2007
TELUS elects not to submit offer to acquire BCE
TELUS Corporation has announced that it has elected not to submit an offer to acquire BCE Inc as part of the strategic review process announced by BCE on April 17, 2007.
TELUS said that the inadequacies of BCE's bid process did not make it possible for TELUS to submit an offer.
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27th June 2007
Vodafone awards Huawei 3G expansion contract in Spain
Huawei Technologies has been awarded a high-speed packet access (HSPA) network expansion contract by Vodafone Group plc that will serve all the seven major cities in Spain, including Barcelona and Madrid.
This HSPA expansion contract follows the successful deployment of Huawei's first contract with Vodafone Spain, signed in August 2006. With this contract, Huawei has greatly increased its market share with Vodafone Spain, as well as become its major HSPA mobile network partner. Under the HSPA agreement, Huawei has supplied Vodafone Spain with Distributed Node Bs. The Node Bs' Remote Radio Unit (RRU), with an output power of 40W, can be installed directly on masts, decreasing power loss and increasing network coverage and performance. These features boost the performance of HSPA networks. Since the deployment the first phase of the HSPA project, a subscriber survey by Vodafone has indicated improved network performance.
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27th June 2007
Islamabad calling: Interest in telecommunications opportunities in Pakistan builds
It's being reported that Singapore Telecom (SingTel) is negotiating the purchase of a 30% stake in Pakistani wireless operator Warid Telecom (Pvt) Ltd for approximately US$1,000 million. The news comes as other operators - mostly from the Middle East - are taking the opportunity to buy into one of the fastest-growing markets in Asia. Indeed, SingTel is said to be competing with South Africa's Mobile Telephone Networks (MTN) and Vodafone Group plc of the UK.
Just last week, Oman Telecommunications Company (OmanTel) agreed to buy 76% of long-distance operator Worldcall Telecommunications Group for approximately US$171 million, while May saw Qatar Telecom (Q-Tel) team up with AA Turki Corporation for Trading and Contracting (ATCO) of Clearwire to purchase 75% of Burraq Telecom for an undisclosed sum. Burraq is a licensed long-distance and wireless local loop operator that is planning to build a broadband fixed wireless access network based on WiMAX technology.
These recent acquisitions in turn follow on from China Mobile Communications Corporation's May 2007 purchase of cellular operator Paktel (now re-named China Mobile Pakistan (CMPak) for US$460 million and Emirates Telecommunications Corp (Etisalat)'s acquisition of a 26% stake in incumbent state-owned operator Pakistan Telecommunication Co Ltd (PTCL) for US$2,600 million in 2006.
As a result, and despite the comparatively large number of licensed operators active in Pakistan, there are now fewer investment opportunities for regional and global operators, keen to make Pakistan a key hub in their expanding telecommunications networks. It is to the international long-distance telephony and broadband sectors that investment is being directed, with a number of WiMAX-based regional and national networks being planned by existing operators and new entrants alike, keen to benefit from rising demand for cheap high-bandwidth and telephone connections to the rest of Asia, the Middle East and Europe, regions where large numbers of Pakistanis have emigrated in recent years.
There were almost 58.4 million cellular subscribers and just under 5.0 million fixed-line subscribers in Pakistan as of April 2007 (source: Pakistan Telecommunication Authority (PTA)). Mobile teledensity reached only 37.6% as of April 2007, while fixed-line teledensity reached only 3.2%. Including approximately 1.76 million wireless local loop connections, fixed-line teledensity would have been 4.3%. Demonstrably, there is a huge unmet demand for basic telecommunications services in Pakistan and room enough for several major operators besides the established entities such as PTCL.
In the fixed-line market, use of traditional PSTN lines is falling, from a high of nearly 5.3 million lines in 2005; consequently incumbent PTCL is having to diversify into new markets and compete aggressively with alternative operators such as Worldcall, TeleCard, Warid, and Telenor Pakistan. PTCL continues to account for the lion's share of fixed-lines, at 97.8% of the total as of March 20076. Its largest rival is Worldcall, with just 10,300 lines. However, Worldcall is much more successful in the WLL sector, operating 15.4% of all WLL connections (PTCL is the market leader, with 58.3%, followed by Telecard with 23.3%).
The cellular market is led by Orascom Telecom-controlled Mobilink, with a market share of 43.2%. It's followed by PTCL-owned Ufone, with 21.4% of the market, Warid Telecom with 16.6% of the market, Telenor Pakistan with 16.5%, and CMPak with 1.8%. At the bottom, with a declining subscriber base, is Instaphone.
In the 2005/06 financial year (ended June 30, 2006), foreign direct investment (FDI) in Pakistan's telecommunications sector amounted to US$1,905.1 million; this equated to 54.1% of total FDI invested in all Pakistani industries that year. Furthermore, revenues from all telecommunications services equated to around 2.0% of gross domestic product (GDP) in 2005/06.
For more information on Pakistan's telecommunications sector, please visit our website at www.itireports.com for details of a market report on that country.
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27th June 2007
CommScope to acquire Andrew for US$2.6 billion
CommScope and Andrew Corporation have entered into a definitive agreement, unanimously approved by their respective Boards of Directors, under which CommScope will acquire all of the outstanding shares of Andrew for US$15.00 per share, at least 90%, creating a global leader in infrastructure solutions for communications networks.
The transaction, which is valued at approximately US$2.6 billion, is expected to be accretive to CommScope's cash earnings per share, excluding special items, in the first full year after closing. The US$15.00 per share purchase price represents a premium of approximately 13% over Andrew's average closing share price for the last 30 trading days, a 21% premium over Andrew's average closing share price for the last 60 trading days, and a 16% premium over the closing price of Andrew's common stock on June 26, 2007, the last trading day prior to this announcement.
The combined company will be a global leader in infrastructure solutions for communications networks, including structured cabling solutions for the business enterprise; broadband cable and apparatus for cable television applications; and antenna and cable products, base station subsystems, coverage and capacity systems, and network solutions for wireless applications. The combination of the companies' respective operations is expected to result in meaningful operating, cost and sales synergies, and other important benefits to shareholders, customers and employees, including:
- Building upon complementary global product offerings that will provide customers with a broader array of infrastructure solutions for video, voice, data and mobility;
- Expanding global distribution and manufacturing capabilities;
- Enhancing growth opportunities by combining marquee brands, innovative technologies, and global service models;
- Strengthening industry-leading R&D and intellectual property portfolio;
- Affording scale in procurement, logistics and manufacturing in an increasingly competitive market;
- Diversifying top-tier customer base; and,
- Providing greater opportunities for employees as part of a larger, more diversified global corporation.
Based on CommScope's and Andrew's results for fiscal year 2006, on a pro forma basis, the combined companies would have had sales of approximately US$3.8 billion comprised of approximately 35% in wireless antenna and cable products; 29% in carrier and network solutions; 21% in enterprise products; and 15% in broadband/cable television solutions. The combined companies' revenues on a geographic basis would have been approximately 57% in North America; 24% in Europe, the Middle East and Africa; 12% in Asia/Pacific Rim; and 7% in Latin America. The combined company will have more than 2,200 global patents and pending patent applications and approximately 16,000 employees serving more than 130 countries.
"We believe that the combination of Andrew and CommScope creates a strong company with long-term advantages for our customers and employees," said Ralph Faison, President and Chief Executive Officer of Andrew Corporation. "Our two companies fit together strategically with leading complementary product offerings and geographical strengths. This transaction provides our shareholders with a significant cash premium and offers our global employees an even more promising future as part of a larger and more diversified company."
The combined company expects to generate substantial annual pretax cost savings, excluding one-time transition items, of approximately US$90 million to US$100 million in the second full year after completion of the transaction, of which approximately US$50 million to US$60 million are expected to be achieved in the first full year after completion. The cost savings are expected to come from a combination of procurement savings, rationalisation of duplicate locations, streamlining overhead and integration of infrastructure, and building upon best practices in technology and manufacturing. Transition cash costs are expected to total approximately US$70 million to US$80 million in the first two years after completion.
CommScope has also identified potential revenue synergies, including expected benefits from the combination of Andrew's in-building wireless products with CommScope's global leadership in the Enterprise market. In addition, CommScope sees the potential to increase sales of its integrated cabinet solutions through Andrew's global channel to wireless carriers as well as opportunities to expand broadband connectivity product offerings.
Following the close of the transaction, Andrew will become a wholly-owned subsidiary of CommScope. CommScope will retain its global headquarters in Hickory, North Carolina. The combined company also plans to maintain its Chicago-area presence, exemplified by building upon Andrew's state-of-the-art manufacturing and office facility in Joliet, Illinois.
Terms of the transaction
Under the terms of the agreement, each share of Andrew common stock will be converted into US$15.00, comprised of US$13.50 per share in cash and an additional US$1.50 per share in either cash, CommScope common stock, or a combination of cash and CommScope common stock totalling US$1.50 per share, at CommScope's option.
If CommScope determines to pay the US$1.50 portion of the purchase price entirely in CommScope common stock, each share of Andrew common stock would be converted into US$13.50 in cash, plus a fraction of a share of CommScope common stock equal to US$1.50 divided by the volume weighted average of the closing sale price of CommScope common stock over the 10 consecutive trading days ending two trading days prior to the closing date of the merger.
The total transaction value is approximately US$2.6 billion, based on Andrew's estimated 176 million shares outstanding on a fully diluted basis, which includes shares associated with Andrew's existing convertible notes.
CommScope expects to fund the cash portion of the purchase price through a combination of new credit facilities and available cash on hand. CommScope has obtained customary fully underwritten debt financing commitment letters from Bank of America and Wachovia Bank, N.A. (and their respective affiliates).
Following completion of the transaction, CommScope plans to reduce leverage by continuing to grow its historically strong cash flow, improving the combined company's operational performance, and by identifying and selectively divesting non-core or underperforming assets during the first year after completion. CommScope expects to grow its earnings per share through a combination of increased top-line performance, operational improvements and debt reduction.
The companies expect to close the transaction by the end of 2007, subject to completion of customary closing conditions, including effectiveness of a registration statement on Form S-4, approval by Andrew's shareholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and any other applicable laws or regulations. The transaction is not conditioned on receipt of financing by CommScope.
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26th June 2007
RCN to acquire NEON Communications Group
RCN Corporation and NEON Communications Inc (NGI) have entered into a definitive agreement for RCN to acquire NEON for up to US$5.25 per share of NGI common stock, in cash, for expected total consideration of up to approximately US$260 million. The transaction has been approved by the board of directors of both companies, and is expected to close during the fourth quarter of 2007, subject to regulatory approvals and the approval of NEON's stockholders, as well as certain other closing conditions.
The transaction combines RCN, a competitive provider of video, data, and voice services to residential and business customers in the Northeast, mid-Atlantic, and Chicago metro markets, with NEON's pure play network transport services to carrier and enterprise customers in the 12-state New England and mid-Atlantic regions. NEON offers RCN a complementary network and a customer base that fits into RCN Business Solutions' growth strategy. Pro forma for the quarter ended March 31, 2007 (assuming that the transaction had closed on January 1, 2007), combined RCN Business Solutions' annualised revenue and EBITDA would have been approximately US$160 million and US$40 million, respectively, nearly twice the actual results of RCN Business Solutions. These figures exclude an estimated US$10 million of expected revenue and expense synergies to be achieved during the integration period following the closing of the transaction. In addition, this acquisition expands RCN's overall network footprint, including over 1,000 combined on-net commercial locations, and creating an opportunity to increase its addressable residential homes in markets both inside and adjacent to its existing core footprint.
NEON brings to RCN:
- A densely built fibre-optic network with approximately 4,800 route miles, over 230,000 fibre miles, 22 colocation facilities, and more than 200 points of presence (PoPs) from Maine to Virginia;
- A facilities-based wholesale communications provider that supplies high bandwidth fibre-optic capacity and end-to-end telecommunications services to approximately 120 carrier and enterprise customers;
- Unique fibre routes along utility rights-of-way, expanding RCN's commitment to diversity from the legacy telecommunications infrastructure;
- Complementary network and similar sales approach, which will help facilitate integration and open up new markets for RCN products; and,
- Complementary customer base - NEON's carrier focus and RCN's enterprise focus together offer enhanced growth and sales opportunities.
RCN expects to fund the purchase price for the transaction with US$250 million of debt financing, consisting of a combination of senior secured term loans, as well as unsecured borrowings, with the remainder funded from its existing cash reserves. RCN has received commitment from affiliates of Deutsche Bank to provide the full US$250 million of debt financing. Neither the acquisition nor the additional debt financing require the consent of RCN's existing lenders.
The transaction is expected to close during the fourth quarter of 2007, subject to Federal Communications Commission (FCC) and state regulatory approvals, NEON's stockholder approval, and NEON achieving minimum agreed-upon revenue and EBITDA milestones during the second half of 2007. In addition, assuming the required approvals are received and minimum financial milestones are met, the purchase price could be reduced by up to US$0.10 per share if NEON does not meet supplementary revenue targets specified in the agreement during the second half of 2007.
RCN Corporation is one of the largest facilities-based competitive providers of bundled cable, high-speed Internet and phone services delivered over its own fibre-optic local network to residential customers in the most densely populated markets in the US. RCN Business Solutions is a growing business that also provides bulk video, high-capacity data and voice services to business customers. RCN provides service in the Boston, New York, Eastern Pennsylvania, Washington, DC, and Chicago metropolitan markets.
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26th June 2007
STC to enter telecom market in Malaysia, Indonesia and India with US$3.05 billion investment
In a major step to expand beyond its home market, Saudi Telecommunications Co (STC) has entered into an agreement to form a strategic partnership with Binariang GSM Sdn. Bhd, the principal shareholder of Maxis Communications Bhd, the Malaysian-based integrated telecommunications operator, and its subsidiary PT Natrindo Telepon Seluler (NTS) for an aggregate US$3.05 billion investment. The Maxis Group has operations in Malaysia, Indonesia and India. This investment includes participation in a US$900 million subordinated loan which will be underwritten equally by both STC and the existing shareholders of Binariang.
STC will participate in the recapitalisation and restructuring of Binariang which, under the terms of the current take-private offer, will hold 100% of Maxis, and will invest together with the other shareholders of Binariang to fund the rapidly expanding international operations of Maxis in India and Indonesia. On completion of the agreement, STC will have a 25% effective interest in Maxis and a 51% direct stake in NTS, Maxis' subsidiary in Indonesia.
The agreement is subject to, amongst other matters, regulatory approvals and agreement by the parties on final terms and conditions of legal documentation.
Commenting on the investment, His Excellency, Dr Muhammad Bin Suliman Al-Jasser, Chairman of STC, said: “This transaction represents a very significant step forward in STC’s history and a milestone in the development of STC as a truly global player in the telecommunications arena. We will expand our footprint to over 1.4 billion people in countries where Saudi Arabia has already significant historical and current trading and other relationships, and which include some of the fastest growing telecommunications markets in the world. This transaction is consistent with our strategy and objective to expand into high growth emerging markets not only to diversify our revenue to countries outside of Saudi Arabia but also to generate sustainable long-term growth for the future. We are very pleased with this strategic alliance in Asia which will reinforce the cultural, economic and political cooperation between our respective countries.”
Eng. Saud Al Daweesh, President of STC, said: “We are extremely satisfied today to announce this investment which marks our first major transaction outside Saudi Arabia. We are excited at the prospect of expanding our footprint to these new markets in partnership with Maxis, which has a strong experience in the Asian telecommunications markets. Our participation in the recapitalisation and restructuring of Maxis at this stage gives us a unique opportunity to play a strategic role in guiding the future direction of the company. This investment will enable us to achieve our stated objective of 10% of our revenue to be generated from external sources by 2010.”
He added, “This strategic partnership with Maxis is expected to bring significant benefits to our respective companies, leveraging synergies between our home operations and the new territories through the development of new targeted products and services. In addition, STC’s large scale will contribute to Maxis' future ability to negotiate more favorable terms with vendors and service providers, helping to create value for Binariang and STC shareholders alike. We are fully committed to working together with Binariang and Maxis, share best practices and leverage our respective capabilities to create long-term value for our shareholders.”
Binariang GSM is an investment holding company affiliated with Usaha Tegas Sdn Bhd (UT), which launched a Voluntary General Offer (VGO) for all of the shares of Maxis in May 2007. The VGO closed on June 22, 2007, with over 98% acceptance. Binariang will invoke Section 34 of the Malaysian Securities Commission Act, 1993 and any amendments, for the compulsory acquisition to purchase all of the shares of Maxis (that it does not already own as of June 22, 2007) and will seek delisting of Maxis from the Official List of Bursa Malaysia Securities Berhad.
Maxis is the leading mobile operator in Malaysia with mobile business investments in India and Indonesia. Maxis provides mobile services, fixed-line services and international gateway services. As of March 31, 2007, Maxis had a total mobile subscriber base in Malaysia of 8.5 million (representing a market share of 41.5%).
Aircel, is Maxis’ 74%-owned mobile subsidiary in India with operations in nine of the 23 telecommunications circles of India as of March 31, 2007. Aircel has now received licences for all the remaining 14 circles, including national long-distance and international long-distance licences. Aircel’s existing nine circles cover a population of approximately 350 million and it has a total subscriber base of 5.5 million as of March 2007. Aircel expects to expand its operations and launch operations in the new circles (in a phased manner) as and when the spectrum is received by it from the government of India. Spectrum allocations are still awaited for 13 of these new circles. Maxis completed the acquisition of its 74% interest in Aircel in March 2006.
NTS is Maxis’ 95%-owned mobile subsidiary in Indonesia with a licence to build and operate a national 2G and 3G mobile network in Indonesia. NTS is expected to launch its operations by the end of 2007. NTS is one of the five operators which hold 3G licences in Indonesia. Pursuant to this transaction, Maxis’ ownership in NTS will be reduced to 44%, while STC will own 51% as a result of its investment.
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26th June 2007
Second fixed-line licence to be offered in Egypt
The government of Egypt is planning to offer a licence to operate a second fixed-line network in early-2008, according to state news agency, Mena, quoting Communications Minister, Tarek Kamel.
The second network would compete with Telecom Egypt and would start operating in early-2009, according to the report.
As an incentive, Kamel said that the government would also give the operator of the second-fixed line network a licence to offer international calls.
Telecom Egypt already has an international licence and the government is believed to be planning to sell more international licences in the near future.
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26th June 2007
Telefónica interested in Telemig Celular of Brazil
Telefónica SA is interested in acquiring the Brazilian mobile operator Telemig Celular Participações SA as the company looks to shore up its Brazilian operations, according to Dow Jones Newswires, quoting a person close to the situation.
"Telefónica has been interested in Telemig for some time and if it is put up for sale, the company will be there to make an offer," the person said.
Telemig Celular is being sold off by its controlling shareholder. Tele Norte Leste Participações (Telemar) is also believed to be studying an offer for Telemig Cellular, according to the report.
Telemig Celular operates in the southeastern state of Minas Gerais, a state in which Telefónica does not have a presence. The company has 3.4 million customers in the region and had a net revenue of R$1.19 billion in 2006.
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25th June 2007
OmanTel to acquire majority stake in Worldcall of Pakistan
Worldcall Telecommunications Group has reportedly indicated that an agreement has been reached for the sale of a majority stake in the company to Oman Telecommunications Company (OmanTel). Further details were not disclosed.
According to reports, OmanTel may acquire up to 76% of Worldcall. At the current share price, a 76% stake in Worldcall would be worth approximately US$171 million.
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25th June 2007
Airspan brings WiMAX-powered fixed communication services to Vodafone Malta
Airspan Networks Inc, a provider of WiMAX and Wi-Fi-based broadband wireless access networks, has announced that its HiperMAX base station and customer premise equipment (CPE) are being deployed by Vodafone Group plc to launch its first commercial WiMAX network in Malta. In line with its “Mobile Plus Strategy”, this network is among Vodafone’s first WiMAX deployments worldwide, bundling together its mobile and fixed offerings to provide broadband data and VoIP services to residential and business customers.
Airspan’s HiperMAX is a WiMAX base station designed for high-density deployment situations such as Vodafone’s network in Malta. It is well suited for this kind of deployment in dense metropolitan areas with its capabilities for software upgrades from fixed to mobile WiMAX.
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25th June 2007
Orascom Telecom acquires remaining minority stake in Pakistani GSM operation
Orascom Telecom (OTH) has purchased a 11.3% indirect stake in its Pakistani GSM operation, Pakistan Mobile Communications (Mobilink), for cash consideration of US$290 million. As a result, OTH indirectly owns 100% of the share capital of Mobilink through direct stakes held by wholly-owned subsidiaries of OTH.
OTH will fund the acquisition with proceeds from the US$750 million Senior Notes issuance closed in February. Following the transaction, OTH will receive 100% of the after tax proceeds from management fees and dividends paid by PMCL.
Mobilink is the leading telecommunications operator in Pakistan in terms of subscribers, revenue, and network coverage. Mobilink had 24.6 million subscribers at March 31, 2007. The nearest mobile services competitor had less than half that number, according to OTH. Mobilink’s contribution to OTH’s consolidated revenues and consolidated EBITDA was 23.1% and 20.8%, respectively, for the year ended December 31, 2006.
Mobilink has a leadership position not only in terms of market share but also in terms of network reach. The company’s network covers over 60% of the population of Pakistan. Mobilink’s growth has been sustained by a rapid network rollout. The company had 5,489 base stations on air at March 31, 2007 representing a more than 44% increase over last year.
Naguib Sawiris, Chairman and CEO of OTH stated, “This transaction confirms our strategy to consolidate our ownership in our subsidiaries through acquisitions
of minority shareholder stakes, when appropriate, in order to increase growth, profitability and shareholder value.”
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