South Africa's MTN is to merge its international carrier business into Belgacom International Carrier Services (BICS) and named the merged firm the official international gateway for carrier services of MTN globally.
In terms of this transaction, MTN will contribute into BICS the assets of MTN ICS, its international wholesale subsidiary, which generated revenues of €223 million for the year ending 31 Dec 2008.
It is envisaged that the MTN ICS operations will be progressively integrated. Post implementation of the transaction, Belgacom will own 57.6% of BICS, Swisscom 22.4% and MTN 20.0% with the right to appoint two directors to the board.
The combination of the international carrier services of BICS and MTN ICS is expected to improve efficiencies and product offerings resulting from greater economies of scale. In addition to the anticipated efficiencies, the transaction is expected to positively impact the future growth of the larger combined entity which will become a leading international wholesale operator in Africa.
Elie Bardawil, CEO of MTN ICS, commented: "MTN ICS, formerly known as Mediterranean Network, operated for more than 10 years as the international gateway for primarily the Investcom group of companies until its acquisition by MTN in 2006. Since then MTN ICS has contributed to the overall growth of MTN's international traffic and related services. MTN ICS will bring to the combined entity its knowledge of the African and Middle Eastern markets and the skills and experience of its team."