UAE's e& acquires 10% stake in South Korea's Bespin Global for $60m

Joint venture established to focus on Middle East, Turkey, Africa and Pakistan region

e& recorded a net profit of Dh2.19 billion in the first quarter of 2023 as its subscriber base grew. Photo: E-Vision

The UAE’s biggest telecoms operator e& — formerly known as Etisalat — has invested $60 million in South Korea’s cloud management company Bespin Global for a 10 per cent stake and also formed a joint venture company that will provide public cloud services in the region.

Originally announced in December, the new company is known as Bespin Global MEA. It will be 65 per cent owned by e& enterprise, a part of e&, and 35 per cent owned by Bespin Global.

It will offer “public cloud managed and professional services in the Middle East, Turkey, Africa and Pakistan”, e& said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

“In addition, e& invested $60 million in Bespin Global in exchange for a stake of circa 10 per cent … the JV will be accounted for as a subsidiary of e&, effective from May 2023,” it added.

In the cloud industry, businesses pay only for those selective services or resources they use over a period of time.

The adoption of cloud technology is expected to add $181 billion in economic value to the UAE over the next decade, according to a report commissioned by Amazon Web Services. That is equal to 2.5 per cent of the Emirates’ economy.

Nearly 1 per cent increase in cloud adoption by UAE organisations will result in a 0.21 per cent or $854.7 million average gross domestic product growth, which is three times the Middle East and North Africa average and the highest in the region, the report added.

Abu Dhabi-based e& was founded in 1976 and is the UAE's oldest telecoms company. It has operations in about 16 countries across the Middle East, Asia and Africa.

It recorded a net profit of Dh2.19 billion ($599 million) in the first quarter of 2023 as its subscriber base grew.

The company is expanding its presence and has been on an acquisition spree.

Last month, it signed a $400 million deal to acquire a majority stake in Careem’s Super App spin-off from Uber as part of efforts to expand its consumer digital offerings.

This year, e& increased its stake in Vodafone Group to 14 per cent as it continues to consolidate its shareholding in the British company as part of its international expansion plans.