Bahrain-based Batelco has reported its Q1 2010 financial results, posting revenues of BD 85.9 million (US$227.8 million), up four per cent from the first quarter of 2009, while net profit declined seven per cent to BD 24.3 million. The firm attributed the slide in profits to significant start-up costs of its new operations and specifically funding S-Tel in India. Earnings per share for the quarter was 16.9 fils.

Chief executive Peter Kaliaropoulos said he was satisfied with the group’s performance, taking into consideration increased competitive activities and new entrants in Bahrain and Jordan. He said the 35 per cent year-on-year growth in Batelco’s customer base to 6.4 million came largely from increases in mobile and broadband customers across every market, including over a million customers in India.

In addition, Kaliaropoulos stated the group was seeking acquisitions in North Africa and Asia, in the price range of US$1.5-2 billion. This is with a view to raising annual net profit to between BD 90-100 million during 2010.

“Furthermore, whilst investing in infrastructure, sales, marketing and customer care initiatives, we have also been implementing efficiency and productivity initiatives and as a result our EBITDA has grown by five per cent and group operating profit grew by seven per cent to BD 27.8 million,” he added.

The firm has invested twice as much in Bahrain – its home and most important market – in Q110 compared to Q109, focussing on expanding fixed and mobile infrastructure. Operations outside of Bahrain contributed 32 per cent of revenues and 22 per cent of EBITDA during the period.

Jordanian operation Umniah now has 1.65 million mobile subscribers, amounting to a 26 per cent market share. Its WiMAX and ADSL customer base increased to 19,000 customers.

A Turkish firm is reportedly interested in purchasing an unspecified share of Zain Group, according to Kuwaiti newspaper Al Qabas.

"The Turkish company is still searching on a preliminary basis into the issue and did not formally discuss the features of the deal with the owners of the company," stated the report without naming a source.

If the owners agree, the Turkish party will wait until the sale of Zain’s African assets excluding Sudan and Morocco to India’s Bharti Airtel is complete, before negotiations begin.

South African mobile operator MTN Group is in talks with Naguib Sawiris’ Orascom Telecom with respect to purchasing the latter’s African mobile phone businesses.

The talks are said to have begun as discussions about MTN buying Orascom’s Algerian mobile operator but expanded to include most of Orascom’s African businesses, according to people familiar with the situation.

Sawiris predicted consolidation of the telecom market in Africa, and said his company would be willing to participate in the process should the right opportunity presented itself

MTN, Africa’s largest mobile operator, confirmed in a statement on April 22 that it was in talks that “may or may not lead to a transaction”. It did not identify the other company.

Trading in Orascom’s global depositary shares in London was suspended pending an announcement by the company.

MTN’s move on Orascom, which has a market capitalisation of US$7 billion, reinforces Sawiris comments recently that the telecom market was set to consolidate and that he would be willing for his company to participate in that process.

MTN is reported to be considering buying most of Orascom’s African assets, including Algeria, Tunisia, Burundi, Central African Republic, Namibia and Zimbabwe.

It is understood that MTN is not interested in Orascom’s minority stake in ECMS, Egypt’s leading mobile operator. MTN is also not interested in Orascom’s mobile businesses in Canada, Pakistan, Bangladesh and North Korea.

Djezzy, Orascom’s Algerian business, is the biggest profit generator of its African assets, though Sawiris has been considering selling it since the Algerian government issued Djezzy with a US$597 million tax bill last year.

Qtel has posted a robust set of Q1 2010 financial results, with net profit attributable to shareholders soaring 104.3 per cent to QAR 1.2 billion (US$330 million) from QAR 549 million a year earlier. Revenues increased more modestly, growing 14.2 per cent from QAR 5.6 billion in Q1 2009 to QAR 6.4 billion for the quarter ending March 31, 2010. A strong EBITDA performance was also achieved with EBITDA rising 14.4 per cent during the period to QAR 3.0 billion.

Group subscriber numbers across 17 markets gained steadily growing from 55.87 million to 67.68 million year-on-year.

"We have continued to advance across all areas of our operations in this first quarter, building on the positive momentum generated during 2009, most notably in markets such as Iraq and Indonesia where progress has been particularly encouraging,” commented Nasser Marafih, chief executive of the Qtel Group.

“We continue to prove highly successful in our efforts to defend and even expand our solid market positions in those markets where competition is heightened. At the same time, we have retained sufficient flexibility in our operating model to be in a position to respond quickly to opportunities and challenges as they arise," he added.

Review of operations by market

Qtel, Qatar

Qtel took a dent in its home market revenues following the introduction of competitor Vodafone, declining 6.4 per cent year-on-year from QAR 1.5 billion in Q109 to QAR 1.4 billion a year later. EBITDA also dropped 20.3 per cent to QAR 712.8 million from QAR 894.4 million.

However, the company said the impact of competition is offset by the reduction of the royalty fee from 25 per cent of profits to an industry fee of 12.5 per cent, backdated to October 7, 2007. In addition, a one percent fee is payable on Qtel Qatar’s regulated revenue from the effective date. The benefit of the changes is an estimated QAR 554 million.

In March 2010, Qtel began the first phase of a national programme for ‘Fibre to the Home’ (FTTH), aiming to link homes across Qatar with fibre connections over the next three years, enabling the future introduction of next generation services across the country. This will help develop new income streams from the higher value market segment. The firm also confirmed a partnership with Tata Communications in which the operator will be the landing party in Qatar for the Tata Global Network (TGN) Gulf Project.

Indosat, Indonesia

Qtel continues to reap the rewards operationally and financially of the significant monetary investments made in Indosat, in addition to refocusing the Indonesian operator’s strategy, realigning the customer base and reviving its sales functions. Indosat’s customer base grew by 17.3 per cent to end March with 39.8 million subscribers, while quarterly revenues rose 29.9 per cent year-on-year to QAR 1.9 billion from QAR 1.4 billion.

EBITDA during the period also increased, boosted both by the improved operational performance and favourable foreign exchange rates. During the period EBTIDA advanced 31.2 per cent to close Q1 2010 with QAR 923.7m, compared to QAR 704.2 million a year earlier.

Wataniya Telecom

Wataniya Telecom encompasses the Qtel Group’s businesses in Kuwait, Tunisia, Algeria, Saudi Arabia, the Maldives and Palestine, where consolidated subscribers increased 36.8 per cent to 15.76 million from 11.52 million in Q109.

Revenues increased 13.1 per cent from QAR 1.4 billion to QAR 1.6 billion, while EBITDA gained 9.1 per cent year-on-year to QAR 592.1 million.

Nawras, Oman

Nawras has remained on track with its plans to introduce an international gateway during 2010, as part of the fixed-line mandate secured during 2009 and which will help diversify its future revenue streams.

The operator has continued to strengthen its position in the Omani market, with subscribers growing 22 per cent from 1.59 million to 1.94 million. Revenues also improved by 19.1 per cent to reach QAR 432.1 million. EBITDA increased 70.5 per cent to QAR 251.2 million.

Asiacell, Iraq

Asiacell made significant progress during 2009, delivering substantial customer, revenue and profit growth. Positive momentum continued during the first quarter of 2010, with Asiacell’s total active customers increasing a further 15.8 per cent to 7.74 million, from 6.69 million in the first quarter of 2009. Revenue continued to grow with Q1 2010 revenues standing at QAR 1.2 billion, a year-on-year increase of 33.7 per cent. EBITDA also advanced 45.5 per cent year-on-year.

After extending its offer three times and raising the price, Cisco Systems has finally completed its acquisition of global video communications provider Tandberg for NOK 19 billion (US$3.4 billion). Cisco originally offered US$3 billion in October but was rejected by 90 per cent of Tandberg share owners as undervaluing the company.

Commencing April 26, Tandberg’s full product line is incorporated into Cisco’s TelePresence range, while its CEO Fredrick Halvorsen will lead a new unit of Cisco called the TelePresence Technology Group (TTG) in the role of senior vice president. The newly-formed group includes three fully integrated businesses that will focus on endpoints, infrastructure and Cisco TelePresence cloud services.