STC seeks 25 per cent stake in Omantel

Saudi Telecom (STC) confirmed yesterday it is keen to acquire a 25 per cent stake in Omantel. The shareholding is being sold as part of a privatisation programme initiated by the Omani government, the value of which has been estimated at US$1.1 billion.

Omantel’s privatisation started earlier this month with the ministry of finance soliciting expressions of interest by July 18, with the partial sale expected to be completed by the fourth quarter of this year.

If STC acquires a 25 stake in Omantel, it will be the Saudi operator’s fourth acquisition after Oger Telecom, Malaysia’s Maxis and Kuwait’s third mobile operator.

The sale of the stake in Omantel, the sultanate’s sole fixed-line operator and also a provider of mobile and Internet services, would reduce the government’s ownership from 70 to 45 per cent.

Between 2005 and 2007, Omantel’s subscriber base grew 14 per cent year on year, while revenues grew 16 per cent to US$950 million at the end of 2007.

UAE-based Etisalat has also previously expressed interest in bidding for the stake in Omantel.

STC has been a late entrant to overseas expansion, but has made three significant strategic investments since June 2007.

It spent almost US$6.5 billion in its combined purchases of a 25 per cent stake in Malaysia’s Maxis, a 26 per cent stake in Kuwait’s third mobile firm and 35 per cent of Oger Telecom, which gives the operator access to Turkey and South Africa.

The Saudi operator beat analysts’ forecasts to post its largest ever quarterly profit in Q208, after it started consolidating Oger Telecom.

Both STC and domestic mobile rival Mobily, which holds about 40 per cent market share, are preparing for additional competition later this year with the launch of a third operator, Zain in Saudi Arabia .