Mobile operator Zain has agreed to take a 56.53 percent stake in Palestinian operator Paltel in exchange for Paltel owning 100 percent of Zain Jordan. The combination of Zain Jordan and Paltel will produce a company with annual sales of over USD 1 billion, USD 450 million in EBITDA and USD 300 million in net income in 2009.
Zain also expects significant synergies and savings in capital and operating expenses and enhanced purchasing power for the operators. Under the transaction, Palestine will become the 24th territory in which Zain will have a commercial footprint and will eventually join Zain's One Network platform for reduced-cost roaming across the Middle East and Africa.
Paltel has a base of 1.5 million active mobile customers and over 363,000 fixed-line customers, as well as approximately 78,000 ADSL customers as of 31 March, while Zain Jordan has over 2.35 million active mobile customers.
Under the framework of a strategic management agreement and branding/intellectual property agreement, Zain will bring its experience in managing international operations to Paltel, aligning the Paltel operations with Zain's global ACE strategy and incorporating its propositions such as One Network, mobile-banking services and Zain Create, Zain's new digital entertainment portal. The transaction is expected to close in Q2, subject to regulatory approvals.