Eti­had Eti­salat as­sess­ing of­fers for Saudi Ara­bia tower busi­ness

The Pak Banker - - COMPANIES/BOSS -

RIYADH: Eti­had Eti­salat Co. is re­view­ing of­fers for its tower busi­ness as the Saudi Ara­bian telecom­mu­ni­ca­tions com­pany seeks to be­come prof­itable, Chief Ex­ec­u­tive Of­fi­cer Ah­mad Far­roukh said. "We re­ceived cer­tain in­dica­tive of­fers," Far­roukh said in an in­ter­view in Riyadh on Thurs­day. "If the deal is good for our share­hold­ers, for sure I'll bring it on the ta­ble."

The sec­ond-big­gest telecom­mu­ni­ca­tion provider in Saudi Ara­bia is one of sev­eral seek­ing to sell tow­ers as net­work qual­ity be­comes sim­i­lar across dif­fer­ent oper­a­tors. Dig­i­tal Bridge Hold­ings is among the lead­ing bid­ders for Eti­had Eti­salat's tower port­fo­lio, which could fetch as much as $2 bil­lion, ac­cord­ing to peo­ple with knowl­edge of the mat­ter. The com­pany owns about 10,000 tow­ers in the oil-rich king­dom. Saudi news web­site Maaal re­ported in Fe­bru­ary that "high-level ne­go­ti­a­tions" were hap­pen­ing to cre­ate a com­pany to own the tow­ers of all three telecom­mu­ni­ca­tion providers in the king­dom, in­clud­ing Saudi Telecom Co. Zain Saudi Ara­bia is as­sess­ing sev­eral op­tions for its tow­ers, in­clud­ing sell­ing them for cash and leas­ing them back or work­ing with com­peti­tors to cre­ate one tower com­pany, CEO Has­san Kab­bani said last week.

While Eti­had Eti­salat, also known as Mo­bily, isn't "af­ter a deal for the sake of a deal" the com­pany is keen to sell the tow­ers as they are "not our core busi­ness," Far­roukh said. "It's a com­pli­cated thing. You have to go to each and ev­ery of our 10,000 sites, ne­go­ti­ate the rent with 10,000 land­lords and have the con­sent for them to move to the new tower com­pany." The king­dom's other two oper­a­tors, Zain Saudi Ara­bia and Saudi Telecom Co., are also "think­ing of the same," he said. Mo­bily, 27 per­cent owned by Abu Dhabi's Emi­rates Telecom­mu­ni­ca­tions Group, is re­cov­er­ing from ac­count­ing ir­reg­u­lar­i­ties dis­cov­ered more than a year ago that cost the com­pany its CEO and bil­lions in mar­ket value. The com­pany re­ported its first quar­terly profit in the fourth quar­ter af­ter four con­sec­u­tive pe­riod of losses.

Mo­bily aims to be­come prof­itable again this year, al­though all telecom­mu­ni­ca­tion com­pa­nies are fac­ing an un­ex­pected chal­lenge from a reg­u­la­tory re­quire­ment to take fin­ger­prints from cus­tomers, Far­roukh said. The re­quire­ment, in­sti­tuted in Jan­uary, "in a way lim­its your growth," he said. "It's a learn­ing curve and we're hop­ing there will be ex­ten­sions, but we're work­ing 24/7." The com­pany is still wait­ing to hear the re­sults of a Cap­i­tal Mar­kets Au­thor­ity in­ves­ti­ga­tion into the ac­count­ing reg­u­lar­i­ties, Far­roukh said.

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