Orascom open to French mobile alliance with Iliad (Egypt)Egyptian conglomerate Orascom is open to forming an alliance with France’s only bidder for a fourth mobile licence, triple-play operator Free’s parent company, Iliad. Naguib Sawiris, who owns half of Orascom Telecom through his Weather Investments vehicle, counts as Orascom’s only presence in Europe Italian mobile operator Wind, acquired for EUR 12.1 billion in 2005. The magnate told Les Echos that Orascom Telecom expressed interest in the French licence, but did not bid because it was not clear whether the licence price, EUR 619 million, would be reduced or if it would be possible to spread payments over time. Sawiris explained that Orascom would not be interested in pursuing UMTS in France, though, as he sees 3G as a “flop” on which operators spent billions of dollars on licences, but is only expected to attract 10 percent of their customers.
The main application of mobile is voice, he insists, and Wind has yet to spend a single Euro on 3G in Italy. This position puts him at odds with France Telecom, a big spender in 3G, whith whom he describes a “complex relationship”. France Telecom is Orascom’s partner in Egypt, Algeria and Tunisia. Sawiris was unwilling to change the brands Mobinil, Djezzy and Tunisiana’s to Orange Egypt, Algeria and Tunisia, he reveals. Sawiris also reiterated to the newspaper that Orascom would be interested in buying France’s third mobile operator, Bouygues Telecom, if Martin Bouygues ever decided to sell. The French building and telecommunication group may be looking for funds to finance its potential acquisition of a large stake in a new merged French nuclear and power utility company being formed by Areva and Alstom, according to the French press.
Orascom Telecom, outside its home market mainly present in emerging countries such as Pakistan and Algeria, has a USD 13 billion market capitalisation. It made a USD 1.1 billion operating profit on USD 2.5 billion of revenues in the first half of the year. and expects to have 100 million subscribers by the end of 2008. Sawiris sees telecommunications as a way to unite the countries of the Mediterranean Basin, which include France, but also keeps his eye on the bottom line. Thanks to lower operating costs in its emerging markets, the group enjoys a 65 percent gross operating margin in Algeria, compared to 45 percent in Italy. In Pakistan, for example, consumers spend only USD 4.90 a month on mobile communications, and consume a mere quarter of the network capacity in France.
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