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Etisalat and Qtel frontunners in Maroc Telecom stake bid

Interest from a number of international players for a stake in Morroco's largest telecoms operator is likely to ultimately result in a showdown between Etisalat and Qatar Telecom, analysts said.

Interest from a number of international players in a lucrative stake in Morocco's largest telecoms operator is likely to ultimately result in a showdown between Etisalat and Qatar Telecom (Qtel), analysts said yesterday.

On Thursday, the UAE operator Etisalat said it was looking into purchasing the French media company Vivendi's 53 per cent stake in Maroc Telecom, worth some US$6 billion (Dh22.03bn).

It follows an announcement from Qtel late last year expressing an interest in bidding for the same stake.

"It is not every day that a majority stake of a leading mobile operator comes to the market," said Petr Molik, the chief financial officer and head of research at Mena Corp. "Maroc Telecom is a high-quality asset. It is number one in the market, has high margins and nice profitability. It is a good asset to have in a portfolio."

Both Etisalat and Qtel have adopted a strategy of expanding in the region, particularly the Middle East and Africa, through mergers and acquisitions (M&A) and also by pursuing green-field licences.

"The broader landscape is changing now. There are fewer green-field licence opportunities available, even in emerging markets where there are now several players, so it is logical to expand through M&A," said Matthew Reed, the principal analyst at Informa Telecoms and Media.

Other operators that have expressed an interest include Korea Telecom with rumours that the United Kingdom's Vodafone and Saudi Telecoms are also eyeing the stake.

"It will depend very much on the price that the bidders are willing to pay," said Mr Molik. "Both [Etisalat and Qtel] have sufficient market capitalisation and cash generation, so they can easily finance the acquisition."

Qtel already has operations in neighbouring Algeria and Tunisia. Etisalat has operations in Egypt and Nigeria. Given Etisalat and Qtel's proximity to Morocco, their understanding of the Middle East and African markets and their cash-rich state, they are considered the forerunners.



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