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Kurdistan: Korek operator shows interest in Iraqna
27.8.2007
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August 27, 2007
Erbil-Hewler, Kurdistan region (Iraq), --
Kurdish operator Korek Telecom said on Sunday it was
in talks to buy the Iraqi assets of Egypt's Orascom
Telecom Holding and planned to invest $1 billion to
expand its network across the war-torn country.
Korek paid $1.25 billion for one of three Iraqi
mobile licences sold earlier this month at an
auction in Jordan, replacing those awarded after the
U.S.-led invasion that toppled Saddam Hussein's
regime in 2003.
Orascom, which set up a network under a licence
bought in 2003, pulled out of the auction in Jordan
at the eleventh hour and said it could consider
selling its operation. Orascom's stock tumbled on
the news and hit an eight-week low on Aug. 20. |
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"We are in negotiations with Orascom," Korek's
deputy chief executive, Hameed Akrawi, told Reuters
in a telephone interview from Iraq.
"We are interested in buying the assets and the
customer base, but this will depend on the price,"
he said.
Credit Suisse estimated in a note last week that
Orascom's Iraq network, operated under the Iraqna
brand, could be worth as much as $1 billion. Iraqna
had around 3 million subscribers, according to its
Web site.
The country of 26 million had around 8 million
mobile phone users at the end of 2006, according to
Iraq's telecom's regulator, and most people rely on
cellphone because decades of war and sanctions have
destroyed much of the fixed-line network.
Iraq had virtually no mobile phones before the
invasion.
The interim administration set up by U.S.-led forces
also sold licences in 2003 to Kuwait's Mobile
Telecommunications Co. (MTC) and Asiacell, an
affiliate of Kuwait's National Mobile
Telecommunications Co.
MTC and Asiacell, now an affiliate of Qatar
Telecommunications, won the other 15-year licences,
leaving Korek as the only winner without a national
network.
Korek, which runs a network in Iraq's Kurdish
northern region, is taking over Orascom's assets
until the end of the year, Akrawi said. Its rivals
would be allowed to bid for Iraqna if a sale could
not be agreed by then.
Asiacell would consider a bid for Iraqna, a
shareholder of the company said last week.
Korek plans to add 4.8 million customers to its
network in the next five years, Akrawi said. The
operator has 1.2 million customers based mainly in
the Kurdish region.
"We will need a minimum investment of $1 billion,"
he said.
Korek would fund the expansion with equity and debt,
possibly including bonds or loans that comply with
Muslim law, Akrawi said.
Reuters
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