Etisalat seeks control of Maroc Telecom

Faced with stagnating revenues in West Africa, UAE’s Etisalat is hoping a majority stake in Morocco’s Maroc Telecom will invigorate growth there by creating a regional telecoms powerhouse with more than 25 million mobile subscribers, people familiar with the matter said.

Etisalat, which last month expressed an interest in French conglomerate Vivendi SA’s 53 per cent stake in Maroc, sees significant cost and revenue synergies between its operations across six African countries and Maroc’s subsidiaries in West Africa, the people, who didn’t want to be named because a deal is still being negotiated, said.

Etisalat is already present in Benin, Ivory Coast, Gabon, Niger, Central African Republic and Togo, while Maroc Telecom has subsidiaries in Mauritania, Burkina Faso, Mali and also Gabon. Maroc Telecom would manage the combined assets of the two companies in the region, the people familiar with Etisalat’s plans said.

“They see the synergy of the deal not in further optimisation in Maroc Telecom but in integrating their countries with the other countries for Maroc Telecom and creating this Francophone powerhouse along the coast of Western Africa,” said one person familiar with the matter.

Etisalat’s revenues have remained broadly flat across its African operations over the past four quarters and operating profits have been falling, even as subscribers have grown, according to its latest quarterly presentation to analysts. Capital expenditure has also been decreasing in the past year.

Across the Ivory Coast, Benin, Togo, Gabon, Niger, C.A.R., and two other African operations, Tanzania and Sudan, subscribers increased 29 per cent to 12.2 million in the fourth quarter compared with the same period earlier, while revenue remained flat at Dh709 million ($193 million).

Maroc Telecom, meanwhile, grew revenue by 18 per cent across its West Africa subsidiaries last year and increased operating profit margins from 40.2 per cent to 46.5 per cent as subscribers grew 32 per cent to nearly 13 million.

Etisalat submitted a preliminary expression of interest for the Maroc Telecom stake last month. France Telecom SA, Doha’s Qatar Telecom and Korean operator KT Corp have all also publicly expressed an interest as well.

Vivendi SA has been looking to sell its 53 per cent stake in Maroc Telecom since last summer, as part of a broader strategic shift of the company away from telecommunications and its media and content assets.

Maroc Telecom To Invest $1.2 Billion In Morocco’s Broadband Network

Maroc Telecom (Maroc) would invest 10 billion Moroccan dirhams ($1.2 billion) to upgrade the country’s broadband network, Morocco’s biggest telecoms company said on Wednesday.

Maroc, which is 53 percent owned by French conglomerate Vivendi SA and 30 percent owned by the Moroccan government, said it would invest this money between 2013 and 2015 financial years.

The company will also invest 4 billion dirhams ($477 million) in other African countries where it has operations. These countries include Mauritania, Burkina Faso, Gabon and Mali over the same period.

Maroc Telecom had already invested 25 billion dirhams ($3 billion) in Morocco, it said in a statement to the French securities exchange.

The company made this announcement at the time when Etisalat ETEL.AD, the United Arab Emirates’ largest telecommunications operator, said it is interested in buying Vivendi’s 53 percent stake in Morocco’s Maroc Telecom.

French conglomerate Vivendi is exploring selling several assets as part of an on-going strategic review intended to pay down debt, boost a flagging share price and reduce the group’s exposure to capital-intensive telecom businesses.

Maroc Telecom, in which Vivendi first bought a stake in 2001, offers fixed-line, mobile and internet services in the kingdom, and is also one of Africa’s main telecom operators.

Qatar Telecom QTEL.QA, the state-owned operator, has hired J.P. Morgan Chase to advise it on a potential bid for the stake.

South Korea’s KT Corp is also said to be considering a bid for the unit, which Vivendi hopes will fetch 5.5 billion euros ($7.31 billion), two people familiar with the matter said last month.

France Telecom to expand its presence in Africa

France Telecom wants to expand its presence in fast-growing African mobile markets by entering Benin, Togo, Burkina Faso and Mauritania.

Elie Girard, the group's head of strategy and development, said plans for Africa also included seeking to sign management contracts with telecom groups in Libya and Algeria.

He said no talks on acquisitions were currently underway, but Africa and the Middle East were a priority for growth.

"If we manage to enter Benin, Togo, Burkina (Faso) and Mauritania, for example, that would be very valuable for us," he told reporters at a briefing in London. He said the countries' proximity to Orange's existing operations in Mali and Senegal made them more attractive.

The group, which markets its services under the brand Orange, operates in 21 Middle East and African countries.

Orange, sponsor of soccer's Africa Cup of Nations in 2013, is the third-largest mobile operator in the region, behind South Africa's MTN and Britain's Vodafone.

A presence in Benin would also improve a link between the company's network in Niger and the submarine cables that carry Internet traffic between Africa and the world, Girard said.

He said France Telecom also wanted to expand into Libya, Algeria and Ethiopia, and would seek contracts to manage other operators' telecom networks as a way to get a foot in the door.

Girard gave no update on whether France Telecom would bid for Vivendi's stake in Moroccan operator Maroc Telecom . Vivendi hopes to get at least 5.5 billion euros ($7.34 billion) for its 53 percent stake in Maroc Telecom in a sale process now underway.

South Korean telecom firm KT Corp submitted a preliminary offer for the Maroc Telecom stake in mid-December.

A move by France Telecom would be complex given that it already owns a 40 percent stake in Morocco's second-biggest operator Meditel, which it might have to divest.