Zain set to add PalTel to portfolio

Zain is in negotiations to seek control of Palestine’s sole operator PalTel, with PalTel’s CEO Abdul Malik Jaber to depart the company as part of the new ownership structure, according to reports.

Photos on PalTel’s website show some of the damage to telecoms infrastructure in Gaza, which occurred during last month’s attacks

Zain said in a statement on the Kuwait stock exchange that it was “engaged in negotiations to enter a strategic partnership in PalTel”, while the Palestine Securities Exchange stated it had suspended trading of PalTel at the operator’s request, until a deal was concluded.

PalTel has provided fixed, data and mobile services in the West Bank and Gaza Strip since January 1997. However, infrastructure in Gaza has been so severely damaged since the beginning of the year following Israeli attacks, that the company is in dire need of investment and rebuilding of infrastructure.

Zain currently operates in 22 countries across the Middle East and Africa, and recently raised US$4.49 billion for expansion activities. A finalised deal with PalTel would likely see the Palestinian operator rebranded as Zain across the Palestinian territories.

A second mobile operator, Wataniya Palestine, is set to launch services this year after repeated setbacks since March 2007, with a process underway to receive the staged release of radio spectrum. The company is owned by Qatar’s Qtel and the Palestinian Investment Fund.

The main shareholders of PALTEL include Palestine Development and Investment Company (PADICO) with 28.9 per cent, Arab Bank with 7.78 per cent, Palestine Commercial Services Company with 7.1 per cent, and Cairo Amman Bank with six per cent. Thirty per cent is listed on the Palestine Securities Exchange and Abu Dhabi Securities Market. Other companies and individuals make up the remaining shareholders.