Telecom Egypt eyes its neighbours as it mulls expansion
If you have the cash and the nerve a recession can be a great time to make some relatively cheap strategic acquisitions - and Telecom Egypt (by far and away the biggest fixed line operator in any Arab country) is on the buying trail as incumbent telco seeks to ameliorate the effects of over-dependence on its home market.
The chairman of Telecom Egypt, Akil Beshir, says, "The company faces market saturation at home. We need to look elsewhere for growth and we could spend at least US$1 billion on an acquisition in the Middle East or North Africa."
Beshir added, "Telecom Egypt is underleveraged and should take advantage of the opportunities and lower asset prices created by the global financial crisis. That said, the crisis is a double-edged sword. From one side it makes more assets available at more attractive prices but on the other side you have to be careful about the future of any of those assets."
Even though it is the country's monopoly fixed-line telecoms services provider, Akil Beshir is concerned about the future of the telco as more and more Egyptians opt to sign-up with mobile operators and what used to be guaranteed income from well-heeled tourists declines as the credit crunch bites ever harder.
Asked to forecast revenue growth for 2009, Beshir declined, saying "it is too early and the picture is far from clear". He did however talk about Telecom Egypt's expansion plans. Referring to potential acquisition targets he said, "We have three preferences. We are looking in the Middle East and North Africa region. We are looking at existing operation rather than greenfield start-up. And, last but by no means least, we are looking at an integrated fixed and mobile operation. Such a company would be the ideal target for us."