x Abu Dhabi, UAETuesday 25 July 2017

Kuwaiti telecoms firm Zain is eyeing new opportunities in North Africa, having expressed an interest in Tunisia and a possible third telco licence in Libya.

The Kuwaiti telecoms firm Zain is eyeing new opportunities in North Africa, having expressed an interest in Tunisia and a possible third telecoms licence in Libya.

Zain is also looking to acquire smaller companies, such as internet service providers and media companies, in neighbouring markets in an effort to become an “integrated” company, not just merely a telecoms player.

“We still want to grow inorganically and we are looking at opportunities in the Middle East and North Africa. There are some opportunities that strategically make sense,” said Scott Gegenheimer, the chief executive.

“We are reviewing several opportunities in North Africa and countries like Libya and Tunisia are interesting, but we want a majority control. Anything less than 51 per cent stake doesn’t do much.”

Dubai Holding is selling its 35 per cent stake in Tunisie Telecom. The company bought the stake for US$2.25 billion in 2006.

Mr Gegenheimer is also keen to increase Zain’s ownership in a Moroccan subsidiary. Through a joint venture with Al Ajial Investment Fund, Zain owns a 31 per cent stake in Wana.

“Over the next three to five years, we want to become an integrated service provider. It is a slow process, but we cannot be a mobile operator forever,” said Mr Gegenheimer.

Zain is also in the process of launching an initial public share offering in Iraq, which has been been much delayed because of regulatory and administrative issues.

Without committing to a specific time, Mr Gegenheimer said the IPO was likely to take place next year.

The company’s business in Iraq is among its most profitable, accounting for 40 per cent of the group’s total revenues. Revenues in Iraq in the first half of this year reached US$833 million, with the unit claiming 48 per cent of the market share in the country.

“It is out of our hands. There was a major delay but we finally got the joint stock company set up and changed from an offshore company to an onshore one. This was never done before,” said Mr Gegenheimer.

“The biggest issue is the custodial issue on shares – can foreign owners come in? Foreign investors are hesitant to put money there because of the way shares are held with local companies. We are confident that with foreign investors, we will be able to sell the 25 per cent [of Zain shares].”

thamid@thenational.ae