I’ve been made aware of an article which appeared in the Financial Times last year, and shows quite clearly that Batelco is looking for expansion and investment, but not as much in or for Bahrain, but anywhere but!
Have a read:
Middle-East money moves on telecoms
By Mark Odell and Lina Saigol
Published: October 14 2005 03:00 | Last updated: October 14 2005 03:00 Financial TimesAs Europe’s large telecoms groups hunt for deals outside their borders, they are coming up against a new type of competitor: Middle East-based companies flush with oil cash.
Saudi Arabia’s Oger Telecom; Bahrain Telecommunications Corporation and the UAE’s Emirates Telecommunications Corporation, are just some of those companies outbidding their European counterparts for prized assets across the Middle East.
“The search for growth has become an emerging markets game for many of the European telecoms incumbents. But there are new competitors in these markets, such as the Middle East telecoms players, which are flush with cash as the region reaps the benefits of high oil revenues, and have been able to outbid their European counterparts in recent transactions,” says Paulo Pereira, head of European M&A at Morgan Stanley.
Last month Turkey agreed its biggest ever privatisation deal, selling a 55 per cent stake in Turk Telekom to a group led by Saudi Arabia’s Oger Telecom for $6.5bn - about 15 per cent more than the Russian bidders.
Now, the government of Tunisia, which is selling a 35 per cent stake in Tunisie Telecom has received expressions of interest from both European and Arab Gulf operators.
Fourteen companies have been shortlisted, including France Telecom, Telefsnica of Spain, as well as Egypt’s Orascom and Kuwait’s Mobile Telecommunications Company. Official bids are due by December 5, with the winner announced on December 13.
Given that the European telecoms players are unwilling to overpay, the Middle Eastern telecoms companies are expected to be the most aggressive bidders.
“One of the most notable developments in the telecoms space over the past couple of years has been the emergence of sophisticated and financially powerful operators in the Middle East who are aggressively looking for additional growth opportunities outside their borders,” said Sean Carney, global head of telecoms at HSBC.
“In recent auctions in Saudi Arabia, Turkey and Pakistan we have seen operators from the Middle East succeed over competition from more established operators,” Mr Carney added.
Indeed, last year, Etisalat, the telecoms group from the United Arab Emirates, clinched the second mobile GSM licence in Saudi Arabia with a bid of $3.4bn, offering about twice as much as Vodafone had been prepared to pay in a process that attracted a dozen bidders, including most of the big western European operators.
“Telecom companies are now using very conservative criteria when it comes to evaluating deal values and few will be willing to risk overpaying for an asset,” says Paul Gibbs, head ofglobal M&A research at JPMorgan.
Few investors will forget the levels of wild bidding for telecoms, internet and media assets during the late 1990s, when companies spent huge sums on third-generation networks that left balance sheets bloated with debt.
But for the European players, the attraction of bidding for Middle Eastern assets is the promise of rapid mobile subscriber growth, with most western European markets at saturation point, in a region where fixed-line infrastructure is poor. The main ways of accessing these markets is either via privatisations or licence auctions.
Jorma Ollila, chief executive of Nokia, summed up his impressions of the region after a recent visit. “The buzz there in the Middle East, the Gulf and Africa is the same we saw in China seven or eight years ago in the early part of the market cycle, the same we saw a couple of years ago in Latin America.”
Meanwhile, there are still a number of deals in key developing markets, besides Tunisia, where the European operators will again be faced by the might of their Middle Eastern counterparts.
About 15 companies are expected to vie for Telsim, Turkey’s second-largest operator.
May 22nd, 2006 at 7:58 pm
Check this out, I think you should write about it. Other countries are starting to give FREE broadband, and we dont have unlimited for money!!
http://www.businessweek.com/technology/content/may2006/tc20060522_430352.htm?campaign_id=rss_tech
May 22nd, 2006 at 9:43 pm
so, what’s the relevance? they invest in other countries and bring the profits to bahrain. that’s good is it not?
May 23rd, 2006 at 7:11 am
of course it’s good Jep, it just demonstrates that they ARE flush with money and would rather invest it in some other country’s infrastructure (much more) than they would in Bahrain..
Or at least if they ARE making money outside, they should take it a bit easier on the consumers in Bahrain who had a direct input into Batelco’s profits since its inception.
May 23rd, 2006 at 8:41 am
what a douchebag, so it’s ok for MTC to build a huge base outside Kuwait, but when Batelco does it they are the enemy? damn you traitors.
May 23rd, 2006 at 2:14 pm
Anon, no one has anything against Batelco or MTC being profit-oriented or expanding their base outside their home countries but… our problem is that Batelco has cancelled unlimited Internet usage, and thus deprived thousands of Internet users in Bahrain from benefiting from the Internet’s full potential.
May 23rd, 2006 at 4:39 pm
if that’s the case, why the whining against their overseas policies? We should concentrate on demanding unlimited internet, not get nosy with their expansion, maybe if they succeed in expanding they, just maybe, they might go a little bit easy on us, so I am all for unlimited internet, but I don’t get nosy with their other plans.
May 23rd, 2006 at 5:31 pm
I agree, I apologise for mixing up the issues. I should have resisted putting this article up until the current issue is cleared up.
Thanks for pulling me up on this.
May 23rd, 2006 at 6:33 pm
Nooo that’s not the point.. Batelco has simply FAILED in improving and enhancing fixed line services.. WHY is it that countries around the world are being provided with much more faster and innovative broadband services, and us and especially in Bahrain (supposedly most liberalized) to not see ANY of it??!?
I want Batelco and the rest of the competitors to INVEST HERE and they better, because who’s gonna attract investment when you see ONLY 1 operator providing Broadband??? It’s Batelco’s SOCIAL POLICY to do this (as they they are the BAHRAINI TELECOMS OPERATOR) BE ONE! Not somewhere else!
As for MTC, GOOD for them! they build the latest infrastructure, with 3G in Bahrain and Kuwait.. they have also just managed to get in 3.5G as well (aka. HSDPA).. get me a country or 2 that has such technology deployed! it’s like 1.8mb speeds wireless or something..
..anyway the point is Batelco owes it to itself and the Bahraini people to enhance its service to bring it on par if not exceed the global standard in telecommunications..
May 24th, 2006 at 10:06 am
The basic mentality you have is “Batelco should work harder outside Bahrain & make it easier for us IN Bahrain.
I wonder why you dont apply this mentality to other companies.
Oh wait, I forgot, very few companies even care about expanding outside the country because getting more profit by employing cheaper labour is their solution.
Also, you want telecoms companies to invest here where EVERY sigle ISP in the country either is much more expensive or outright refuse to provide residential ADSL because of it’s outrageous cost.
When cars, computers, booze, medicines, booze electronics and appliances are all much cheaper outside Bahrain, why do you complain about Batelco being more expensive than the UAE ??
May 24th, 2006 at 10:52 am
Batelco is feshelco company, they trying to be something but what?? damn they are nothing but looser why?? they cancelled the unlimited internet usage, go & see other countries you will see the big damn difference …
May 24th, 2006 at 12:29 pm
crazy is right and I agree, it’s all because of some higher greedy power in Bahrain, that it’s reflected on all businesses and businessmen in Bahrain to be more greedy, whether they chose to or are forced to. everything is cheaper abroad than Bahrain while income is so damn low. Look at Emirates, you compare only their internet, now look at their pay levels and look at the goods sold there. A Chevrolet TrailBlazer would cost around 10.5K Dinars here while in Dubai it would cost around 9k for the FULL OPTION model. There are a lot of other examples. All businesses should be revolted at, and not just Batelco.
May 24th, 2006 at 4:13 pm
Just an FYI, the TRA just launched their new web prescence:
http://www.tra.org.bh
and the have this interesting section for consumers that seems to be more lively than the old one:
http://www.tra.org.bh/en/am-consumer.asp
May 24th, 2006 at 4:20 pm
here’s the downside: some pages of their new site doesn’t render well on firefox 1.5
anyways this time around the TRA provides contact details for the other ISPs:
http://www.tra.org.bh/en/licensingCurrent.asp
(well some of them are ISPs …)
and a step-by-step guide for consumer complaints here:
http://www.tra.org.bh/en/ConsumerComplaints.asp
May 24th, 2006 at 4:23 pm
and let’s hope they get the right people this time for these placements:
http://www.tra.org.bh/en/pdf/MC21176%20120%20x%20170.pdf
director of legal affairs & market ops.
May 25th, 2006 at 7:39 pm
response to anon,
your really going of the subject “all businesses should be revolted at,and not just batelco”.What are you talking about !!!I have to totally disagree with you the cost of living is much higher in Dubai then in Bahrain e.g hotels , food ,cabs, cinemas, clothes and in many cases electronics.GET YOUR FACTS STRAIT BUDDY!!!!!
May 25th, 2006 at 9:42 pm
strait up, I suggest you “straiten” your own head up first, secondly, I wouldn’t need to stay in a hotel in Bahrain, I am not talking about hotels, I am talking about consumer products, okay maybe electronics are getting better in terms of price in Bahrain, but what about other stuff? even tho, still the income in UAE and the rest of the Gulf is higher than here. Okay maybe I miss phrased my demand, not all business but still most businesses should be revolted at. Plus don’t take dubai only, the rest of the emirates, Saudi Arabia, Qatar, except for kuwait, the rest are cheaper than Bahrain. Don’t think that you’re the only one who travels around. typical Bahraini, wanna just say that you “know it all”
May 26th, 2006 at 2:55 pm
I dont claim to know it all .But I know one fact for sure, its that having a disscussion with anyone who genralises whole populations is useless.I am a Bahraini and proud of it!!!”boycot all businessess”"typical Bahraini kows it all”I just hope that someone with such narrow thinking and uses stereotypes in every message is not a Bahraini.NOW LETS FOCUS ON GETTING UNLIMITED PACKAGES.
May 27th, 2006 at 12:35 am
Ok I mis-phrased my sentence, read it again, I WAS WRONG FFS. But don’t pretend that all is rosy in Bahrain, some, I said SOME businesses are way too greedy, what made them that way? that was what I was wondering.