India’s Tata Communications has announced that  it has contracted Tyco Telecommunications to construct the TGN Gulf cable system, which will connect the Gulf region to the rest of the world through the Tata Global Network (TGN) cable system. Tata Communications’ local partners in the Gulf gateway to the TGN are the Bahrain Internet Exchange, Oman’s Nawras, Qatar’s Qtel, Saudi Arabia’s Mobily and the UAE’s Etisalat.

Each party will be an exclusive landing party for the high-speed bandwidth TGN Gulf cable system, which will support the development of advanced telecommunications services such as global Ethernet, MPLS based VPN, managed security, IaaS (Infrastructure as a Service) and global telepresence. Each party will have access to a new high-speed route to the globe and at the same time add much needed resilience and diversity to the infrastructure in each country.Work began on the cable system in October 2009 and is expected to be completed during 2011.

In addition, Tata Communications has earmarked US$200 million for investment in the Middle East region over the coming two years.

"We firmly believe in the growth potential and increasing dynamism in the Middle East region,” commented Vinod Kumar, president and COO of Tata Communications.

“This conviction translates tangibly into investments that will increase our infrastructure and services coverage throughout the region. Most importantly, this is steered by the strong foundational partnerships that we have formed with leading Middle Eastern operators. We see the Middle East as a crucial building block in our emerging markets strategy and in delivering the ‘new world of communications’ to our global enterprise customers.”

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Integrated UAE operator Du plans to invest AED 2.2 billion (US$600 million) on network infrastructure in the upcoming year, on the back of surging profits for the full year 2009. Revenues grew by 35 per cent to reach AED 5,339 million, compared to AED 3,951 million for 2008, while net profits before royalty reached AED 528 million, an exponential increase from AED 8 million a year earlier.

Du’s CEO Osman Sultan said the company offers the most technically advanced fixed telephony, broadband and IPTV in the Arab world

Du’s mobile subscriber base reached 4,488,200 active mobile customers as of the end-December, an increase of 41 per cent year-on-year from a previous figure of 3,477,000. Fixed line subscribers also saw significant growth with a rise of 45 per cent to 405,900 lines. EBITDA for the full year jumped 189 per cent from AED 369 million in 2008 to AED 1,064 million.

“Three years exactly after launching our services, we have reasons to be proud of our achievements so far. Our position in the mobile market is a strong one and we have realised our ambition, in a short time, of becoming a serious player in the UAE. Our value proposition in fixed telephony, broadband Internet and IPTV is the most developed, integrated and technically advanced in the Arab world,” stated chief executive officer Osman Sultan. “We see good growth prospects ahead by widening our appeal to more and more customers through the expansion of our offering nationwide via an infrastructure sharing agreement.”

“In addition we have been building the foundations for the company to enter efficiently, through partnerships and joint ventures, into the fast growing universe of digital content and the Internet, allowing progressive ramp up of new revenue streams in the years to come,” Sultan added.

Capital expenditure for the year surpassed AED 2.4 billion, including the addition of 717 2G sites extending coverage to 99 per cent of the Emirates’ population, along with an additional 786 3G sites, reaching population coverage of more than 80 per cent.

During the fourth quarter, the company added 337,900 mobile subscribers, with revenues reaching AED 1,530 million, a 25 per cent increase from the same quarter a year earlier. Net profit before royalty witnessed 155 per cent year-on-year growth to reach AED 209 million for the quarter, up from AED 82 million in Q408.

The Indian government plans to commence its long-awaited and oft-delayed 3G auction process within the next week, the telecoms minister has confirmed. Notices inviting applications will be issued shortly, with an estimated deadline 40-45 days later, meaning the auction will now take place in the 2010 fiscal year starting April.

The auction had previously been postponed due to internal disputes over the pricing and availability of wireless spectrum. The government hopes the expected INR 350 billion (US$7.6 billion) in revenues from the 3G auction will help stem its fiscal deficit, which has reached a 16-year high.

Analysts estimate individual operators could outlay between US$1-1.5 billion for India-wide spectrum, while the actual 3G network rollout could cost billions more. The country’s top three operators – Bharti Airtel, Reliance Communications and Vodafone Essar, have all indicated their appetite for a slice of the 3G pie, while Telenor’s Uninor has also showed interest in 3G licences for specific circles.

Additionally, the minister added that the introduction of mobile number portability has been pushed back a further two months until the end of May.

Etisalat is close to finalising a deal to secure a majority stake in Iraq’s Korek Telecom, Etisalat’s chairman Mohammed Omran has announced. The UAE operator has been in discussions with Korek since September 2008.

Currently there are three operators in Iraq – Zain, Qtel subsidiary Asiacell and Korek. Korek holds a national licence, however its coverage is limited to mainly the northern part of the country and has long needed outside investment to fund network expansion.

Omran also stated the operator may seek to raise funding through bonds to fuel expansion into a further six markets outside its current 18 operations, including Algeria and Libya. An opportunity exists to enter Algeria through Orascom Telecom’s subsidiary Djezzy, with the Algerian government reportedly wanting Orascom to surrender its investment.

Etisalat has more than 100 million subscribers across its footprint in the Middle East, Africa and Asia, and hopes to increase international revenues from currently 10 per cent to 20 per cent within the next three years. The firm remains the Gulf region’s second largest telecoms firm by market value.

The New Generation Telecoms consortium has been announced the winner of 75 per cent of Nigeria’s state-owned incumbent Nitel, with the bid of US$2.5 billion. The consortium comprises Nigeria’s GiCell Wireless, a relatively unknown telecoms firm within in the country, China Unicom as technical partner and Dubai’s Minerva Group. The consortium has 10 days to pay 30 per cent of the fee and a further 50 days to pay the balance if it is to secure its stake in Nitel.

The shareholding up for offer includes Nitel’s mobile arm Mtel and its fibre-optic cable division SAT-3, which links Africa with Europe and the rest of the world.

The other bidders were led by Omen International Limited (BVI), a company registered in the British Virgin Islands and which was announced the reserve bidder with an offer of US$956.98 million, more than US$1.5 billion below New Generation’s bid.

The others named include Brymedia Consortium which bid US$551 million, AFZI/Spectrum Consortium and MTN Nigeria Communications, which bid US$25 million for SAT-3 only. MTN Nigeria Communication and local mobile operator Globacom were previously excluded from bidding fully for the ailing incumbent.

The government’s privitisation move has received criticism for not learning from mistakes of the past, and opening up too much to foreign investment.

The federal government sold a 51 per cent stake in Nitel to local conglomerate Transcorp in 2006, retaining a 49 per cent interest. Since then the telco’s initial 500,000 fixed lines in service had dropped to about 45,000, and racked up a significant amount of debt.

In February Transcorp was made to start divesting its shareholding in the telco and in March the Bureau of Public Enterprises (BPE) announced it was offering a 51 per cent stake in the fixed line operator and 100 per cent of its mobile unit. In May Nigeria’s anti-corruption police charged the head of Transcorp, Tom Iseghohi and two other employees with fraud for allegedly embezzling around US$110 million belonging to Nitel, revoking the sale of Nitel to Transcorp altogether.