Saudi Telecom Co. (STC), Saudi Arabia’s largest phone company by market value, sees a growing number of opportunities for acquisitions and new licenses in the Middle East and wants to buy controlling stakes in companies.
STC, which operates across the Middle East, Africa and Asia, is seeking to grow in Southeast Asia and the Middle East, with the latter taking “more emphasis right now given the opportunities that are re-emerging in the region”, International Operations Chief Executive Officer Ghassan Hasbani told reporters at a conference in Dubai today.
While STC isn’t currently in direct talks about acquisitions, “the possibilities are emerging” and it is monitoring the situation, he said.
“We also see potential for consolidation in the market,” said Hasbani. “Some companies are looking for exits, others for the right opportunity to partner.”
Saudi Telecom recently raised its stake in Indonesia’s NTS, also known as Axis, to 80.1 percent from 51 percent. Axis said today it signed a $1.2 billion financing deal to help fund its expansion in the Indonesian market over the next five years, focusing on broadband and improving its coverage in the country.
Saudi Telecom competes with Etihad Etisalat Co. (EEC) and Zain Saudi Arabia for mobile-phone and Internet customers in the kingdom, the Arab world’s largest economy.
The company is looking to increase the proportion of its revenue from international operations to 50 percent in three to four years, from 33 percent currently, Hasbani said this month. STC aims to expand in India and is still pursuing a license in Syria, Chief Executive Officer Saud al-Daweesh said.
‘Right Opportunities’
“Private equity groups in many cases are looking to exit the industry,” Hasbani said today. “Telecoms companies like STC are ready to look at the right opportunities whenever they emerge.”
The Riyadh-based company is interested in investments that complement its geographical presence and is not interested in buying minority stakes, he said.
“Any acquisitions, transactions we do next would aim to increase control and bring majority control to STC,” he said.
On new licenses, Iraq is a potential “green field” opportunity, while the company is still interested in Syria, he said. Syria last month postponed an auction for the country’s third mobile license without setting a new date, after protests to demand greater freedoms in the Arab country erupted. Only Saudi Telecom and Qatar Telecom QSC reached the final phase of the auction.
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