Orascom Telecom Algeria received the final Tax Reassessment for the years 2008 and 2009 amounting to US$ 230 Million
Orascom Telecom Holding (OTHâ€) announces that its Algerian subsidiary Orascom Telecom Algeria (OTAâ€) has received the final tax notification from the Algerian Direction des Grandes Enterprises (Tax Department for Large-Scale Companies) (the DGEâ€) in respect of the years 2008 and 2009, in which the DGE has re-assessed taxes alleged to be owed by OTA in the amount of approximately DZD 17 billion (approximately USD230 million) (the Reassessmentâ€).
The Reassessment is considered a final notification pursuant to the preliminary notification OTA received in September 2010. This Reassessment comes despite the fact that OTA had already paid the taxes due for the same years.
Without prejudice to their rights under the Investment Agreement, applicable bilateral investment treaty and applicable laws, OTH and OTA intend to take all necessary legal steps to challenge this completely unfounded Reassessment.
About Orascom Telecom
Orascom Telecom is a leading international telecommunications company operating GSM networks in high growth markets in the Middle East, Africa and Asia, having a total population under license of approximately 506 million with an average mobile telephony penetration of approximately 48% as of September 30th, 2010. Orascom Telecom operates GSM networks in Algeria (OTAâ€), Pakistan (Mobilinkâ€), Egypt (Mobinilâ€), Bangladesh (banglalinkâ€), North Korea (koryolinkâ€) and Canada (Wind Mobileâ€) through its indirect equity shareholding in Globalive Wireless. In addition it has an indirect equity ownership in Telecel Zimbabwe (Zimbabwe) and through its subsidiary Telecel Globe; OTH also operates in Burundi, the Central African Republic and Namibia. Orascom Telecom reached almost 98 million subscribers as of September 30th, 2010.
Orascom Telecom is traded on the Cairo & Alexandria Stock Exchange under the symbol (ORTE.CA, ORAT EY), and on the London Stock Exchange its GDR is traded under the symbol (ORTEq.L, OTLD LI). For more information visit www.orascomtelecom.com.
Telecom has announced that it is all set to launch an innovative text message service, which for the first time in Namibia will deliver a range of key classified business information using Short Messaging Service (SMS) platforms across a multiple of mobile networks in Namibia.
The service, which will be available from next Monday will offer classified directory information searches for business and service types covering the most common needs of mobile phone users whilst on the move or in the event of an emergency.
According to the company, the SMS offering reflects Telecom’s commitment to provide new and flexible ways for consumers to access its database of business listings as quickly and conveniently as possible.
Telecom is offering the service through a partnership with CellDirect Namibia and Schoemans Office Systems. CellDirect is an SME with four years of experience in SMS Communications services working with Schoemans Office Systems, an organization that has been providing innovative solutions for over 50 years in Namibia.
The service will enable mobile users to request and receive contact details of companies such as Taxis, Florists, Takeaways and Locksmiths, by SMS – at any time and where there is network coverage. Users on the main mobile networks can access businesses across various locations via a single designated number, 100, and have a choice of results sent direct to their phone quickly and discreetly, 24 hours a day.
According to Telecom Namibia’s Managing Director Frans Ndoroma, the Namibian market has embraced the text message and made it one of the most popular ways to communicate. The company has recognized this and as a result has developed a service which enables users to access our business directory data via text. It’s more flexible, less intrusive and more discreet than a telephone call and can be used in situations with a lot of background noise such as busy bars and clubs.
He added that the use of SMS as a communication tool has grown beyond anyone’s expectations around the world. The company has seen how difficult it is to simply find a business name or phone number. With people using SMS for everyday communication, they realized that there is a gap in the market for a simple SMS directory service.
www.WirelessFederation.com/news: Both Orascom and MTN are tight lipped about the possible takeover bid of Orascom, the parent company of Leo – Namibia’s second largest telecommunications operator by MTN. The silence is amidst visible signs and media speculation surrounding the takeover bid.
Stanley Similo, spokesperson of Leo denied commenting on the future of the company saying that he was not in a position to comment on the on-going talks between MTN and Orascom’s parent company, Weather Investments S.P.A, which may or may not lead to a transaction.
In a statement by the company, it has been cleared that Orascom is aware that its parent company, Weather Investments S.P.A, is in discussions with MTN Group which may or may not lead to a transaction relating to the acquisition of control of Orascom and/or its businesses by MTN.
Analysts believe MTN is likely to buy Orascom’s Algerian operation, Djezzy and four of its sub-Saharan businesses. Officials at MTN have suggested the shareholders to exercise caution in trading their MTN securities until a further announcement is made concerning a possible deal. MTN which already has a presence in Namibia through its Internet services business is providing both corporate firms and small businesses with Internet solutions after acquiring Verizon SA, which in turn wholly owned Verizon Namibia last year.
According to Johnny Aucamp, general manager of strategic relations and business development, Africa at MTN Business, Namibia is a viable market as there is a considerable demand by organizations for superior service offerings and a competent telecommunications partner.
www.WirelessFederation.com/news: Negotiations with Algerian government is set to be opened by Orascom Telecom, the Cairo-based mobile operator that could lead to the nationalization of its highly profitable subsidiary in the north African country. The company has written to the authorities in Algiers seeking talks over the future of Djezzy, its Algerian mobile unit.
However, there are still doubts as in whether Orascom will seal a deal with MTN, Africa’s largest mobile operator as, if it went ahead this would see MTN acquiring most of the Egyptian group’s African assets. Talk between the two companies had been confirmed last month. The discussion started with Djezzy but expanded to include other Orascom operations, including units in Tunisia, Burundi, the Central African Republic, Namibia and Zimbabwe.
After the deal became public, the government announced that it would block any sale of Djezzy. According to analysts, the removal of the Algerian subsidiary from any package of assets to be sold by Orascom makes it far less attractive to MTN and the Algerian operation is Orascom’s most profitable business and last year accounted for just over half of the Egyptian company’s earnings before interest, tax, depreciation and amortization, which totaled $2.24bn.
Government’s opposition to MTN buying Djezzy had been reiterated by Algerian trade minister. A legislation was brought by Algeria two years ago giving the state the right of first refusal when a foreign owner wants to sell assets in the country. Orascom in its argument has said that the law on pre-emption should not be applied retroactively as the rule was not in place in 2001 when it made its investment in Algeria.
$597m has been demanded from the company by the authorities in back taxes and penalties covering the period between 2004 and 2007, during which it had enjoyed an exemption. The authorities also blocked Orascom from repatriating dividends from Djezzy and prevented the unloading of its equipment in local ports.
MTN-Orascom’s joint subscriber base will surpass the 100 million mark if the deal goes through. This would mean that it will be over twice the size of Airtel Africa & Orange. MTN will get a boost of over 20 million subs from the Orascom deal.
That said, if a deal were to happen, here’s a quick analysis of whats for sale in the Orascom portfolio and why 2 assets are particularly interesting:
1. Djezzy in Algeria: Top line of $1.86 billion with a 46% market share (14.6 million subs) and a 57% EBITDA margin! This is the jewel in the crown. However, there is a downside here as well for some key reasons. Orascom’s relationship with the government and the regulator is strained and Q4 2009 results suffered on account of backdated taxes and penalties. Djezzy has actually seen market share decline by 5 percent and ARPU declined by 16% in 2009. Mobile penetration is in excess of 90% and Q-tel owned Njedma has proven to be an aggressive competitor. Numbers are big and exciting but the hay-days might just be getting over pretty soon though.
2. Tunisiana in Tunisia: Orascom owns half of Tunisiana alongside it’s arch rival in Algeria, Q-Tel (Wataniya) which owns the remaining 50 percent. With 53 percent market share (5.2 million subs) and 54% EBITDA margin this is another rock and roll story. However, with Orange launching and that too with an exclusive 3G license, pressures will build up sooner rather than later.
3. CellOne Namibia, Telecel Zimbabwe, Telecel Central African Republic & U-com Burundi together have 1.8 million subscribers and contribute only $81 million to the top line.
If the deal were to go through then Djezzy will be the third largest operation in the MTN-Orascom combine, after Nigeria and South Africa.
Here’s a snapshot of what the MTN-Orascom would look like (Figures are sourced from Wireless Intelligence)
UPDATE 1: Reuters reported that a source in the Algerian government has disclosed that MTN and Orascom are in discussions and Orascom is required by law to inform the government of any such activity. A senior source at the Algerian government also confirmed that they take a positive view of the sale and may bless the deal.
Djezzy is an attractive asset with approx 60 percent market share (penetration is 72 percent) and average EBITDA margin of 60-63 percent.
May 26, 2010 : Orascom Telecom and MTN are in talks with each other wherein MTN will buy Orascom’s African subsidiaries. No deal has yet been finalized, but an announcement could come pretty soon.
MTN confirmed in a statement that it is in talks that may or may not lead to a transaction,â€ but didn’t name Orascom specifically. MTN approached banks for $5bn to help fund the acquisition of units from Orascom in a deal that may be worth $8 billion. Also, trading in Orascom’s global depositary shares in London has been suspended pending an announcement by the company.
Initially the talk was limited to MTN buying Orascom’s Algerian subsidiary Djezzy. But now the talk has been expanded to include most of its African businesses i.e Algeria, Tunisia (may be), Burundi, Central African Republic, Namibia and Zimbabwe. MTN is generally thought to be after Orascom’s Telecel Globe, which manages the Orascom’s Sub-Saharan African units, for a while now, which among other things would give it inroads into Zimbabwe, something MTN has been looking for. MTN does not seem to be very keen to buy Orascom’s minority stake in Egypt’s leading mobile operator, ECMS (Mobinil).
MTN wants to add new markets to its 21 countries across the Middle East and Africa while also consolidating its position on the continent.
Orascom reported group turnover of $5.1 billion for 2009, down 5 per cent compared with last year. Pre-tax profit dipped 18 per cent to $740.3 million. Orascom last week settled a dispute with France Telecom over ownership of ECMS (Mobinil). Orascom’s Algerian business, Djezzy is the biggest profit generator among its African assets. But Orascom’s chairman, Naguib Sawiris has been considering selling it since the Algerian government issued Djezzy with a $597m tax bill last year. This brought a major dip in Djezzy profits in the fourth quarter results for 2009.
www.WirelessFederation.com/news: CDMA mobile voice service ‘Switch’ has been officially re- launched by Telecom Namibia on March 24, 2010 with extensive coverage of rural areas. The service has come after ten months when the government lifted mobility restrictions on the service.
The government removed restrictions in May 2009 limiting each switch voice service user to a zone in and around their home town. In the following month, the service was re- launched as a mobile service. However, initially the network did not extend much beyond urban zones, partly because covering main roads between towns would have been pointless during Switch’s period as a restricted mobility service.
After the complaint from GSM mobile operators that Telecom Namibia was offering mobile services under a fixed line license when it originally launched in November 2006, ban was imposed on full voice mobility.
According Telecom’s marketing and sales manager, Amanda Hauuanga, re-launch is providing Telecom Namibia with the opportunity to touch base with end users, bring back their confidence, gather feedback to further improve its Switch products and create further brand and product awareness in the market.
www.WirelessFederation.com/news: Alfa, the mobile operator managed by Orascom Telecom, will be organizing its second public auction on 25 new platinum mobile numbers on Thursday 3rd of September, 2009. The auction will be held under the high patronage of Telecommunications’ Minister, Engineer Gebran Bassil, and upon his request, and will take place in “Dubai Hall” at the Metropolitan Hotel, at 9 pm.
To participate in the auction, one has to visit Alfa’s headquarters at Furn El Chebbak, Beirut in order to submit the 100 USD registration fees (VAT included) starting the 27th of August 2009, up until the 3rd of September 2009, from 8 am until 2 pm and on the 3rd of September at Metropolitan Hotel from 8 am until 9 pm just right before the bidding operation starts. (more…)
www.WirelessFederation.com/news: Orascom Telecom has reportedly rebranded its Namibian subisidiary Cell One as â€˜Leo’ in a process to begin next month. Egypt-based parent Orascom Telecom, which took over the reins of 2G/3G operator Powercom (trading as Cell One) at the start of this year, explained that the name (pronounced â€˜lay-o’) was taken from the Swahili word meaning â€˜today’, while also representing the Spanish â€˜lion’, and would replace a branding that had become too â€˜old school’ and did not resonate well with the public.
Orascom further added that the new brand will be soon be adopted by its other subsidiaries like Telecel Globe division in Zimbabwe (Telecel Zimbabwe), Burundi (U-Com Burundi) and the Central African Republic (Telecel Centrafrique). The cost of the rebranding is being shared between the international group and at local level, according to CEO Soban Pasha.