The stakes are getting higher for Middle East telecoms firms seeking to expand into Africa. Saudi Telecom yesterday announced its expansion plans for North Africa and the firm confirmed its 25% bid in Orman Telecommunications Company.
According to reports from ME the company said it would cut 14 per cent of its workforce at home and boost efforts to expand abroad after being rebuffed by France’s Vivendi over a stake in Maroc Telecom.
The reports say Saudi Telecom is under intense pressure to improve profitability as a regional telecom war heats up, with rivals like Kuwait’s Zain and Emirates Telecommunications competing within Saudi Arabia.
Saudi Telecom has spent in excess of $6 billion on foreign expansion in the past 15 months.
The expansion has already started paying off. The firm’s second-quarter net profit beat forecasts and rose 24pc, while it was struggling to show any growth at all just a year earlier.
The company paid $2.56bn this year to buy a 35pc stake in Oger Telecom.
Oger Telecom owns 55pc of fixed-line operator Turk Telekom and 75pc of Cell C, South Africa’s third-largest mobile operator. It offers Internet services in Saudi Arabia, Lebanon and Jordan. Oger Telecom had 35 million users and revenues of $6.9bn in 2006.
Its first foreign investment was last year after it took a 25pc stake in Malaysia’s Maxis in a $3bn deal that opened up markets in India and Indonesia.
By ITnewsAfrica.com Reporter
