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.
