France Telecom has confirmed that it has acquired a 53 per cent stake in Hits Telecom Uganda, ending months of uncertainty with respect to whether or not the Ugandan licensee’s concession would be revoked.

Hits Telecom Uganda was at risk of having its licence revoked had it not been rescued through the deal with France Telecom

As reported by Comm. in August, Uganda’s telecoms regulator, the Uganda Communications Commission (UCC), had earlier this year warned that Hits Telecom Uganda risked losing its operating licence if it did not commercially launch its network by September. The licensee was granted a mobile concession in March 2007 and was given 18 months from that date to start offering services.

Hits Telecom Uganda has built out part of its network, which is supplied by Alcatel-Lucent, and has carried out test calls, however, planned commercial launch dates were missed.

Hits Telecom Uganda – not to be confused with Hits Africa – had been backed by Middle East and African Investment Company (MEAIC), a private equity firm registered in the UAE, and owned by a number of high profile individuals and institutions of significant means, predominantly from within the Gulf region.

The universal service licence in Hits Telecom Uganda’s possession allows it to operate a range of access technologies including CDMA, GSM, WCDMA and WiMAX, and also permits the licensee to deploy an international gateway.

The cost of the acquisition by France Telecom was not revealed, though it has been speculated that the telco is looking to invest as much as US$375 million in the deployment of a network across Uganda.

Zain, which is present in 22 countries, reported consolidated financial results for the third quarter of 2008 that showed growth in revenues and net profit with customer numbers reaching 56.3 million. However, the announcement failed to reverse the general slide in the operator’s stock price.

Al Barrak has in his vision to make Zain a 150 million subscriber, US$6 billion EBITDA company by 2011

For the third quarter of 2008, Zain Group recorded consolidated revenues of US$1.887 billion, an increase of 25 per cent compared to Q307. The company’s consolidated EBITDA increased by 20 per cent for the same period to reach US$763.3 million. Zain’s consolidated net profits reached US$326.6 million, an increase of 7 per cent on Q307 profits.

Year-on-year customer growth across the Middle East and Africa was 54 per cent.

“This quarter has been both the most challenging and most rewarding in Zain’s corporate history since the launch of our profitable expansion strategy in 2003,” acknowledged Zain CEO Saad Al-Barrak. “Despite financial turmoil across the globe, we are delighted to have succeeded in raising US$4.5 billion through our capital increase. Additionally the launch of services in Saudi Arabia has been very successful given we have acquired one million customers in less than two months notwithstanding the fierce competition in that market.”

The market did not appear impressed with Zain’s results, with the company’s stock price having been on a steady decline since March, and which suffered a six per cent fall at the end of trading on October 25.

Etisalat’s chairman believes the UAE telco is on track to reach 100 million subscribers by 2010, up from 74 million as of end-September 2008, and representing a growth rate of 22 per cent over the next two-and-a-quarter years.

Speaking recently, Mohammad Omran commented that the telco is in its strongest position ever and is on course to achieve its goal of being one of the top 10 operators in the world by 2010.

Omran believes entry into the Indian mobile market will help drive Etisalat’s bid for 100 million subscribers by 2010

Earlier in October Etisalat reported its consolidated financial results for the third quarter of 2008, showing significant growth in revenues, profits and subscriber numbers. The company reported AED 2.1 billion (US$572 million) in group net profits for the third quarter – an increase of 19 per cent year-on-year. This performance took net profits for the first nine months of 2008 to AED 7.3 billion.

Etisalat recorded net revenues of AED 6.6 billion for the third quarter of 2008 and AED 19.1 billion in total for the first nine months of the year. This represented an increase of 24 per cent, compared to the third quarter of 2007.

“Our acquisition in India has opened yet another key market, which will help power Etisalat’s growth,” commented Omran, referring to Etisalat’s acquisition of a 45 per cent stake in Swan Telecom in India for US$900 million in September. “We are also delighted to have received our first ratings from Moody’s, Standard & Poor’s and Fitch Ratings – which places us in a very strong position to continue our international expansion.”

Sources in Oman suggest that one of the incumbent mobile operators, Oman Mobile, has selected two out of the country’s five resellers to partner with. It is understood to be just a matter of time before the service provider confirms the names of the two licensees, and the expected time-line for their entry into the Omani mobile market.

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On November 16, the deadline for the submission of proposals to acquire a mobile TV licence to operate in the UAE expires. The country’s Telecommunications Regulatory Authority has consulted widely about the best way in which to usher in the service, and the terms of the tender document offer an insight into the type of business model the licensee can be expected to develop

The mobile TV licence on offer in the UAE permits the successful bidder to roll out a mobile TV network and to begin offering transmission services. It will be allowed to sell the mobile TV transmissions to retailers in a non-discriminatory manner, acting as a provider of mobile TV service on a wholesale basis to retailers. The cost of the 10-year licence amounts to AED17 million (US$4.7 million), together with an ongoing annual licence fee amounting to the higher of: one per cent of the revenues earned in a year; or AED100,000.

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