Maroc Telecom Ahead of FT in Benin Telecom Bid

Morocco’s Maroc Telecom, controlled by French group Vivendi, is thought to be in a good position to bid for state-owned Benin Telecoms, according to African-bulletin.com, quoting French newspaper La Lettre Mediterrannee, following previous reports that France Telecom (FT) was in pole position for the privatisation of Benin’s incumbent telco.

The schedule for privatising the PSTN and broadband operator is unclear however, with observers saying that the issue could be clouded by upcoming presidential elections next spring, whilst Benin Telecoms’ workers’ union has warned that it will ‘react strongly’ to inevitable staff restructuring (‘downsizing’) plans resulting from a sale to the private sector.

Maroc Telecom has expanded across several African nations. In neighbouring Mauritania, it acquired 51% of Mauritel in 2001, and it acquired majority control of Burkina Faso’s Onatel in 2006 and Gabon Telecom the following year.

In 2009, Maroc Telecom signed an agreement with the Malian government to become the major stakeholder of Sotelma. The group is also eyeing other markets outside the traditional French speaking African countries which have strong political ties with Morocco.

Maroc Telecom Profits Down 1%, Revenues Up 2.8%

Moroccan full-service telco Maroc Telecom, majority-owned by France’s Vivendi, has posted a 1% year-on-year fall in 2009 net income to MAD9.43 billion (USD1.15 billion) on consolidated revenues that climbed by 2.8% to MAD30.34 billion, as it increased spending, especially in the mobile segment. Group EBITDA for the year rose by 2.9% to MAD18.15 billion.


Operations in Morocco generated net revenues of MAD25.76 billion in 2009, up 0.1% versus 2008, EBITDA of MAD16.16 billion, down 1.5%, and earnings from operations of MAD13.08 billion, down 3.5% year-on-year, chiefly due to the impact of promotional initiatives deployed to stimulate the market and maintain its leading position. Maroc Telecom’s domestic mobile subscriber base grew by 5.6% in twelve months to 15.27 million at end-December 2009, whilst it had 1.234 million Moroccan fixed lines in service at year-end, down 5% year-on-year, due mainly to shrinkage in the residential customer base (down 8.8%) resulting from mobile substitution. At end-December the telco had 469,000 ADSL subscribers, down 1.7% compared to the same date in 2008.

However, it also signed up 174,000 3G/3.5G mobile broadband customers on its W-CDMA/HSPA-based cellular network by year-end, up from less than 30,000 a year earlier.

Group-wide, the operator had a total of 21.7 million customers at end-2009, up 12.6% year on year, reflecting the inclusion of Malian operator SOTELMA, the resurgence in domestic mobile growth and continued year-on-year expansion of other subsidiaries’ mobile customer bases in Gabon, Mauritania and Burkina Faso. A statement from the company read: ‘Based on current market conditions, and barring any unforeseen disruptions to the group's operations, Maroc Telecom will achieve moderate growth in revenues in 2010, driven mainly by growth of subsidiaries.’

Zain Denies Reports on Sale of African Networks

­Kuwait's Zain has refuted local media reports that it had been contacted regarding a sale of its African assets. The Al Anbaa newspaper had reported that Zain was in talks with Vivendi, France Telecom and Vodafone offer a possible sale of the former Celtel networks.

In a statement to the stock exchange, Zain said "There are no current offers and the company will inform the bourse's administration with any new information that may come up regarding this issue,"

The paper, citing unnamed sources said that Zain had been in talks with the other operators for the past couple of months and is seeking US$11-US$12 billion for the networks.

Vivendi was in talks last year to buy the African networks, for a reported US$12 billion - although those talks then broke down. At the time it was suggested that the sale could have been an all-share based transaction, with Zain taking 20 percent of Vivendi, in exchange for 10 percent of Zain Africa.

For its part, Vodafone recently increased its holdings in South Africa based Vodacom to 65%. A merger of the former Celtel, Vodafone and Vodacom assets across Africa could lead to much needed consolidation in several markets.

Celtel was founded by Sudanese-born Mo Ibrahim in 1998 and sold to Kuwiat's MTC (now Zain) in April 2005 for US$3.4 billion.

Vivendi Eyes Orascom Algeria

French media conglomerate Vivendi is considering a move for Orascom Telecom's Algerian unit, Reuters reports, citing French daily La Tribune. A member of Vivendi's board of directors, Mehdi Dazi, was reportedly in Algiers last Saturday to meet with local businessmen, including Issad Rebrab, the head of local group Cevital, which holds a 3% stake in Orascom Telecom Algeria.

Vivendi had a USD10.5 billion bid for Zain Group's African assets turned down, but has continued to pursue acquisitions in emerging markets as it seeks to expand its mobile operations.

The company, which also owns operations in France, Morocco and Brazil, could unite with Cevital to launch a takeover of Orascom's local subsidiary which serves more than 14 million mobile telephone customers in Algeria and reported revenue of over USD2 billion last year.

Zain Denies It's In Talks With Asian Group

* Zain says unaware of stake sale talks after report

* Shares close 1.6 percent higher

Kuwaiti telecoms firm Zain said on Sunday it was not aware of talks between shareholders and an Asian group after a newspaper reported stake sale negotiations.

The firm said in July that it was still reviewing a possible sale of its African operations -- excluding Morocco and Sudan -- after French media and telecoms conglomerate Vivendi broke off talks on buying the operations.

Kuwait's Al-Rai newspaper, citing unidentified sources, said on Sunday that Zain's largest shareholders were in talks with a major Asian telecoms group to sell more than 40 percent of the firm.

"Zain would like to clarify that regarding what has been published in a local newspaper about negotiations between a major Asian group and shareholders, the executive management of the company is not aware of this subject, which is up to shareholders," Zain said in a statement on the bourse website.

Sovereign wealth fund Kuwait Investment Authority owns 24.61 percent of Zain. Kuwaiti family-owned conglomerate Kharafi Group is Zain's second largest shareholder, with 13.3 percent.

Neither KIA nor Kharafi were immediately available for comment. A Zain spokesman declined to comment further.

Zain ended 1.6 percent higher on the bourse on Sunday.

"There is an enormous amount of rumours about Zain," said Naser al-Nafisi, general manager at Al Joman Center for Economic consultancy in Kuwait. "If there's anything going on between the shareholders, the management should know about it."

The newspaper, which did not identify the Asian group, cited unidentified sources as saying that the biggest shareholders in Zain had "the ability and the suitable mechanism to provide the required majority stake".

Sale talk has swirled around Zain in recent weeks.

The head of the international unit of Emirates Telecommunications Corp (Etisalat) said in July that the UAE firm was interested in buying a 51-percent stake in Zain, "given the right values".

Zain said on July 1 that it was working with Swiss investment bank UBS and other consultants to review its strategy as a result of the global financial downturn.

- Reuters

Vivendi in Need for Expansion As Maroc Telecom Growth Stalls

For a few days last month Maroc Telecom's parent company Vivendi looked like it might pull off one of the most audacious attempts yet to arrest control of one of the Middle East & Africa's largest mobile operations from the now well-entrenched players.

However, Zain, whose Celtel unit was the subject of the interest, could not agree on price with the French company and the chance of a deal - however unlikely most commentators, including your author, thought that to be - now looks to be dead and gone.

If a transaction had gone ahead it would most likely have had a significant effect on Maroc Telecom's place in the Vivendi group, with the Moroccan incumbent slotting in as part of a much larger overall portfolio.

As it is, the company remains Vivendi's sole venture in the emerging markets, and its sole vehicle for growth in Africa. In addition to its home operation and its long-standing subsidiary in Mauritania, Maroc Telecom has expanded into Burkina Faso and Gabon by purchasing the incumbents in these markets, and this year has followed those deals with the agreement to purchase a majority stake in Sotelma, the incumbent telco in Mali. The talks with Zain indicate, however, that management in France is not entirely content with this slow piece-wise expansion strategy.

The mobile business, which accounts for almost two-thirds of Maroc Telecom's MAD14.6bn strong top line, grew by 25.9% in connection terms in the year to 30th June 2008, but by just 5.9% in the most recent 12 months. Strong performances by the regional operators (+26% in Gabon, +30% in Mauritania, +74% in Burkina Faso) have failed to offset an almost complete arrest of growth in Morocco which grew by just 0.5% in the year. With 14.29m customers, the Moroccan business still accounts for 81% of the overall mobile base of 17.55m, whilst its fixed operation contributes 84% of the 1.5m strong landline total.

In revenue terms, the home business is even more dominant with 86% of the mobile turnover and 85% of the fixed - and it is convincingly the most profitable in both departments. In this light it is perhaps no wonder that Maroc Telecom's acquisition in Mali - involving around 1m customers - has failed to satisfy the appetites of the French owners. The question, if Celtel is off the menu, is where they will turn next?

KIA Willing to Sell off Its Stake in Zain

Kuwait Investment Authority (KIA), the Gulf state's sovereign wealth fund, could consider selling its stake in mobile operator Zain if the price is right, newspaper al-Rai said on Monday.

KIA, which owns a 24.61 percent stake in Zain, has not received any offers from Etisalat, to date, the paper added.

"The KIA has no objection to discussing any offer to buy its stake in Zain whether made by the UAE's Etisalat or others under the condition that the offer would be serious and with attractive returns," daily Rai said, citing unnamed sources.

KIA could not immediately be reached for comment.

Last week, Etisalat, or the Emirates Telecommunications Corp, said it has not made an offer to buy Zain or its African assets after the head of Etisalat's international unit told Reuters earlier that it was interested in buying a 51-percent stake in Zain Group, "given the right values."

The Kuwaiti firm has been in the news for the past weeks after it said it is still reviewing a possible sale of its African operations -- excluding Morocco and Sudan -- after French media and telecoms conglomerate Vivendi broke off talks on buying the operations.

KIA, which manages the OPEC member state's massive oil-generated assets, sold its 19.8 percent stake in Islamic lender Boubyan Bank in an auction last week.

Kuwait's finance minister, Mustapha al-Shamali, said earlier this month the KIA may sell further stakes in local companies through an auction process.

Zain Reports 5.5% Raise in Q2 Profits

Kuwaiti mobile operator Zain, the third-largest Arab telecoms firm by market value, posted a 5.5 percent rise in second-quarter net profit as the number of subscribers rose. Net profit in the first half was 154.5 million dinars ($538.3 million), Zain said in a statement on Tuesday, without giving a quarterly figure.

Reuters calculated a second-quarter net profit of 78.8 million dinars based on previous financial data, which showed the firm made 75.7 million dinars in the first quarter. The number of customers rose 37 percent to 69.5 million in the first half, the statement said.

Zain said revenues in the six months to June 30 rose 24.1 percent to 1.16 billion dinars compared with the same period last year, and EBITDA advanced 46.3 percent to 512.2 million dinars. It gave no quarterly data.

First-half results include a gain of 26.6 million dinars from an initial public offering in Zambia and losses from currency fluctuations of 31.3 million dinars, Chief Executive Saad al-Barrak said in the statement.

"With improving currency stability in many of our African operations we expect even better in the second half," he added.

Zain announced at the start of the year a goal of 30 percent net profit growth but a spokesman reiterated on Tuesday this target looked "a little bit ambitious".

Emirates Telecommunications Corp (Etisalat) is interested in buying a 51 percent stake in Kuwait's Zain Group at the right price, the chief executive of its international unit said on Tuesday.

Zain, which is partly owned by the country's sovereign wealth fund, said on Monday it still hoped to sell its African unit despite French media and telecoms giant Vivendi calling off talks to buy a majority stake in the business.

Zain has spent billions to expand in the Middle East and Africa and operates in 23 countries to offset rising competition at home in Kuwait where VIVA, an affiliate of Saudi Telecom (), started operating as third mobile firm last year.

- Reuters

Zain Rejects Vivendi Offer Over Payment Terms - Paper

According to a report by Kuwaiti daily Al Qabas, Zain has rejected an offer from French media conglomerate Vivendi to purchase a majority stake in its African operations. The report, citing sources familiar with the situation, says that the French group offered USD10.5 billion for a 65% stake in Zain Africa, which comprises mobile operations in 16 countries, including Nigeria and Kenya.

Zain, which has previously stated that its financial position is strong and that it has no need to sell, reportedly rejected Vivendi's offer over a disagreement regarding conditions of payment. Zain may now consider rival bids from Chinese and Indian firms also interested in Zain Africa.

Etisalat Confirms Libyan Bid

Etisalat has confirmed that it has submitted a bid for Libya's third mobile phone license i­n a brief statement to the Abu Dhabi stock exchange. According to Reuters, the company would plan an investment of at least US$500 million if it won the license.

In the statement, the company said that it " has submitted a technical, commercial and financial bid to the Libyan General Telecommunications Authority (GTA) on 15th July 2009 to participate for the Fixed/Mobile Convergent License in Libya"

Libya currently has two mobile networks. According to figures from the Mobile World, Libyana is the dominant operator with 83% of the market, followed by Al Madar. The country has a population penetration level of 134%.

Etisalat has also confirmed that it is looking at taking a majority stake in Kuwait's Zain, which had had been in talks with France's Vivendi over a sale of its African assets.

Vivendi Puts Zain Talks On Hold

France's Vivendi announced today that it is interrupting talks, started some weeks ago, with Zain Group, to acquire a majority stake in its African telecommunications activities.

In a brief statement, Vivendi said that it had applied its usual criteria of profitability and financial discipline to this potential investment in emerging markets, in the best interests of its shareholders.

No reason was given for the break-off of the talks or any hint if they would resume again.

When the talks were confirmed earlier in the month, Vivendi said that it "attaches the utmost importance to keeping its credit rating and its dividend at their current levels and will continue to work in the interests of its shareholders." Recent comments from debt ratings agency, Standard & Poor's may have cooled its ardor after warning that the credit rating could face a downgrade following an investment in Zain.

Zain had recruited Swiss bank UBS to carry out a "strategic review" that could lead to a sale of its former Celtel division--which includes most of its African assets.

Zain Kenya Projects Swing to Profitability

Kenya's second-largest mobile operator, Zain, expects to swing to profitability in about two years as it puts right half a decade of weak distribution and products, its managing director said on Thursday.

Part of the 15-nation Zain Africa network operated by Kuwait's Zain, the Kenyan unit lost $89 million last year as it sharply lowered calling rates to attract users.

Rene Meza blamed the negative performance on a poor business strategy when it operated as Celtel. "Five years of lost momentum cannot be resolved in 12 months. You probably need a couple more years to reach that point (profitability)," Rene Meza told Reuters. "Our main problem is that we missed certain fundamentals in the telecoms business ... strong distribution networks and competitive and affordable products and services."

Since his team took office, they have been pushing to get the business strategy right, he said. "We couldn't make good miracles in one year, but we made good progress." He cited measures such as the Vuka tariff, Swahili for cross-over, which introduced the cheapest cross-network call rates in the country to entice customers to the Zain network. The initiative helped increase Zain's user numbers to just above 3 million and forced rival operators to slash rates in the last quarter of 2008, he said.

Zain's website shows its active user numbers increased 52 per cent to 2.678 million in the first quarter of 2009 from 1.757 million a year earlier. Kenya's Safaricom is the No.1 operator in a market that is known for low average revenue per user. It has 13.36 million users, while Telkom Kenya's Orange is third with 1 million, and Essar's Yu has about 200,000.

Like other telecom firms in the region, Zain has been shifting focus to the data segment ahead of an expected revolution when the east African nation connects to the rest of the world via undersea cables. With the increase of mobile penetration, especially in the urban areas, we need to seek new revenue streams to continue driving and growing the business," Meza said.

The reach of mobile telephony is estimated at around 40 percent in the country and 65-70 percent in the urban areas. Data services such as the provision of wireless broadband contributes 15 per cent to the company's revenues, he said.

Earlier this year, Zain launched a mobile phone-based money transfer service to rival Safaricom's popular M-Pesa. The managing director said it was hard to set targets in an ever-changing business. "Projecting numbers and figures in a very dynamic industry is always very complicated," he said.

Zain Kenya has invested $42 million in network upgrading and to strengthen its data capabilities. It cut 141 jobs this year to streamline operations and to take advantage of the economies of scale across the 15 operations in Africa.

The managing director declined to comment when asked about market talk of an impending sale of Zain Africa to France's Vivendi

Yes, We Are Talking With Zain, Says Vivendi

­In a partial contradiction from denials a day ago by Zain's CEO, Saad al-Barrak, France's Vivendi has formally confirmed that it is in talks with the company over an acquisition. In the statement, the firm said that an acquisition would enable Vivendi to capitalize on its successful experience of developing mobile telephony in Africa.

The company is talking to Zain about taking a majority stake in the African assets, but in the usual jargon of business warned that at this stage there is no certainty that the discussions currently in progress will lead to a successful outcome.

The statement concluded that "in any event, Vivendi will examine this investment according to its usual profitability criteria and will adhere strictly to its usual principles of financial discipline. In particular, Vivendi attaches the utmost importance to keeping its credit rating and its dividend at their current levels and will continue to work in the interests of its shareholders."