UAE`s Etisalat joins race for MTN Group

Etisalat is evaluating a possible bid for MTN as it seeks to boost revenues from the continent to at least a quarter of its total revenues in four years, Reuters reported quoting the company Chairman Mohammed Omran.

"We are always looking for expansion in Africa," Omran said at a telecom conference in Cairo. "We are evaluating MTN, among other companies," he added. "Within three to four years, I see the revenues from Africa not less than 25 per cent of our sales," Omran said. He did not give further details about the possible bid.

On Sunday, foreign media reported that UK-based telecom major Vodafone was examining the possibility of joining the race by making a bid for MTN. This was, however, denied by the company.

The MTN Group is the largest mobile operator in sub-Saharan Africa. Bharti Airtel has said it is looking at a strategic stake in MTN, which has a market capitalisation of around $37 billion. However, no concrete deal has been reached, it said.

Bharti is keen to retain MTN's management, which controls over 13 per cent of the company, and might look at unlocking its value through a negotiated deal. Brokerage firm Merrill Lynch believes that the transaction may not be "uncontested" but there are strong synergies if the deal materialises.

Apart from Africa, MTN also has a large presence in West Asia and has been looking at starting operations in Pakistan and other developing nations.

It is also looking at an entry in India by picking up a minority stake in Datacom Solutions, part of the Venugopal Dhoot group. Bharti Airtel, too, has been keen on opportunities in the rest of the world, even though it has a presence in Sri Lanka and Seychelles.

MTN's three most important markets are Nigeria with 17.8 million subscribers, South Africa (over 15 million subscribers and Iran (9 million subscribers). South Africa and Nigeria drive 65 to 70 per cent of the group's EBITDA (earnings before interest, taxes, depreciation and amortisation).

South Africa has a mobile penetration of 87 per cent, while Nigeria offers strong growth opportunities with a 25 per cent penetration. MTN also has operations in Cameroon, Uganda, Ghana and Sudan.

In July 2006, MTN acquired Investcom for $3.5 billion, which added operations in 11 markets.

Emirates Telecommunications Corporation, also known as Etisalat, is the incumbent telecommunications carrier and Internet Service Provider in the United Arab Emirates. Founded in 1976, it was the sole telecommunications services provider in the UAE until the arrival of Du in February 2007.

The company provides a wide range of fixed and wireless telecommunications and cable TV services. As of January 2008, it has operations in 15 countries and serves over 33 million subscribers.

Etisalat has also been ranked by the Financial Times Global 500 among the world's largest corporations.

To read related reports,
May 10: Major MTN shareholder, SingTel back Bharti's bid