Years of rapid international expansion appear set to continue for Etisalat, with the company announcing yesterday it is bidding to acquire a mobile network in Sri Lanka, its fifth push towards more overseas expansion this year. The company told the Abu Dhabi Securities Exchange it had made a bid to acquire Tigo, Sri Lanka's second-largest mobile network, joining emerging market operators such as India's Bharti Airtel and BSNL in a bidding war.
If successful, Etisalat will become the only telecommunications company in all the three major subcontinental markets of Pakistan, India and Sri Lanka. Analysts said the move fitted Etisalat's strategic push to operate mobile networks in complementary markets that share commercial or social ties. It already offers some integrated services between networks in the UAE, Saudi Arabia and Egypt, and has said that building on such synergies across its 18-country global network is a priority.
Tigo is owned by the Luxembourg-based telecoms holding company Millicom, which said earlier this year it would sell its Asian businesses to focus on growth markets in Africa and South America. Etisalat announced the bid in a stock market statement, but did not disclose the price it is offering to pay for the network, which has more than 2.2 million customers. A report in The Wall Street Journal recently said Bharti would be willing to pay up to US$120 million (Dh440.7m) for the company.
Etisalat did not respond to requests for comment. The bid suggests Etisalat has not altered its plans for rapid overseas growth, and comes after moves this year to acquire networks or licences in Iran, Morocco and Libya. The company is also looking for opportunities to enter Lebanon and Syria, its chairman has said. Earlier in the month, Etisalat was listed by Nigeria's Bureau for Public Enterprises as one of 13 parties interested in buying Nitel, a state-owned former monopoly telecommunications provider. Etisalat already operates its own network in Nigeria.
Last year, the company said it was close to striking a deal to acquire an Iraqi mobile operator, widely believed to be Korek, based in Iraq's Kurdish region. Recent reports in the Kuwaiti media said Agility, a Kuwaiti logistics company, was in the final stages of selling its stake in Korek, which it bought for $250m in 2007. In purchasing an established mobile network, Etisalat is avoiding the high initial investments of building its own from scratch, as it did in markets such as Nigeria and Egypt.
The Nigerian network cost the company more than $1 billion to build and was launched many months past its expected date. In India, where Etisalat has a licence to operate across the country but no network, it has outsourced its infrastructure programme to a subsidiary of Reliance Telecommunications, one of India's largest operators. The expansion drive is being funded largely by earnings from Etisalat's cash-cow domestic market, which is now one of the most profitable in the world.
tgara@thenational.ae
