Mergers, Acquisitions and Financial Results

Kuwait's Mobile Telecommunications Co. (MTC) said it bought control of leading Sudanese mobile operator Mobitel from Sudan Telecom (Sudatel) for $1.33 billion.

MTC said the deal with in line with its strategy to expand through acquisitions in the Middle East, Africa and beyond, and gives it full control of a business in one of Africa's fastest growing markets. "MTC announces that it has successfully concluded the acquisition of 61 percent of Mobitel from Sudatel in a deal valued at $1.332 billion," said MTC, one of a number of rapidly expanding companies in the energy-rich Gulf Arab region. MTC already had 39 percent of Mobitel through its subsidiary Celtel, Africa's third-ranked mobile operator.

The funding of the transaction had already been secured via MTC's capital increase from an equity rights issue of $2.3 billion, said the company, the largest of two telecom concerns in Kuwait. "This transaction will add great value to the MTC Group and will offer attractive returns to MTC shareholders," MTC Chairman Asaad al-Banwan said in the statement.

"Mobitel is Sudan's premier mobile operator with over 1.9 million customers, up 70 percent in the last year," he said. MTC confirmed it is bidding for Egypt's third mobile phone licence and the firm has said recently it was also interested in Iran, India, Pakistan and Turkey. The Kuwaiti press has quoted MTC sources as saying the company was eyeing other African nations like Senegal, Ghana and Nigeria.

MTC Managing Director Saad al-Barrak said his company plans to accelerate Mobitel's growth and maintain its dominant position in the "dynamic" Sudanese mobile market. "We are also keen on expanding our operations throughout Sudan including the Southern region," he said. "We expect to add over 1 million customers during the next 12 months in Sudan." MTC plans to invest in Mobitel's capacity and coverage, with some $500 million earmarked through 2007, it said. MTC has 15 million customers in Kuwait, Bahrain, Jordan, Iraq and Lebanon and 13 countries in sub-Saharan Africa through Celtel which it acquired last year.

MTC said Sudan's 34.4 million people made it one of the firm's largest markets, adding the country has 7 percent market penetration with significant growth potential. It said Sudan's young population was growing fast and GDP is expected to rise strongly due to increasing oil revenues and a recent peace treaty between the north and south.Kuwaiti state news agency KUNA quoted a senior Sudatel official as telling a news conference in Khartoum that Mobitel's sale was the largest deal in the history of Sudan. KUNA said Mobitel made a profit of more than $100 million last year.