Zain’s acquisition model changes in Morocco

Zain in a 50/50 partnership with Al Ajial Investment Fund Holding has agreed to invest an amount of MAD 2.85 billion (US$324 million) in return for a 31 per cent stake in Wana Corporate, the third mobile telecoms operator in Morocco.

Wana is an integrated telecoms operator offering fixed and restricted mobility wireless services (branded as Bayn), full CDMA mobility services (branded as Wana), and Internet and data services

This is the first time that Zain, the highly acquisitive Middle East operator, has partnered in such a manner in order to acquire a stake in an investment, and may reflect a change in acquisition ethos given the state of the global economy.

It should be noted that Al Ajial is fully funded by the Kuwait Investment Authority, which is also a 25 per cent stakeholder in Zain.

The investment by Zain and Al Ajial will provide Wana with the funding requirements and operational contributions to continue on its ambitious growth plan and to successfully launch its new GSM service later this year. Wana is an integrated telecoms operator currently offering fixed and restricted mobility wireless services (branded as Bayn), full CDMA mobility services (branded as Wana), and Internet and data services throughout Morocco.

Under the agreement Zain will assist Wana in the deployment of its GSM network. Along with the investment, Wana and Zain will enter into an operating framework agreement that will give Wana the possibility to access Zain’s expertise, purchasing power, products and services, including Zain’s ‘One Network’ roaming service.

At the beginning of February Wana was announced the winner of Morocco’s third mobile licence, though Morocco’s regulator, the Telecoms National Regulation Agency (ANRT) did not publicly state how much Wana paid for the licence.

Wana is owned by Moroccan conglomerate Omnium Nord-Africain (ONA) and said it had committed a “significant investment” as part of its bid. The operator was formerly known as Maroc Connect (MCO) and acquired a next generation wireline licence in 2006.

Morocco’s two incumbents are Maroc Telecom, majority-owned by European entertainment group Vivendi, and Medi Telecom, a joint venture between Spain’s Telefonica and Portugal Telecom.

Morocco had 22.82 million mobile subscribers as of end-2008, representing a penetration rate of 74 per cent, according to the ANRT. Maroc Telecom commands a mobile market share of 63.4 per cent, with Medi Telecom holding 34.6 per cent, and Wana Corporate serving the remaining 1.9 per cent.