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Orascom may exit Algeria if not welcome there: Sawiris
BARCELONA, Spain (MarketWatch) -- Egypt's Orascom Telecom may sell its Algerian operations if it receives a clear sign its investment in the fast-growing North African market is not welcome, Chairman Naguib Sawiris told MarketWatch in an interview.
"We are keen to stay in Algeria; it's one of our main assets and until this incident we were very happy there. But we need to understand if our investment is welcome there or not. If not, we will consider other options," he said on the sidelines of Mobile World Congress, the wireless industry's largest annual event.
Orascom's Algerian subsidiary has been contesting a $600 million tax bill going back to 2005. Sawiris said he has decided not to escalate the dispute at the international level but to pursue the local route and is confident it can be resolved relatively quickly.
But he said there is a lot of interest in Orascom's Algerian assets, and he would not hesitate to sell if the issue became too serious.
Orascom has exited markets before when it thought it could no longer achieve interesting returns there, selling its Iraqi operations for instance.
In the meantime Sawiris said Orascom faces no financial constraints after its $800 million rights issue and has enough cash to operate for the next two years.
"I didn't want to make any decision on the Algerian operations under the gun," he said.
But Algeria isn't the only headache for Orascom at the moment. The company is also locked in a long-standing dispute with France Telecom /quotes/comstock/13*!fte/quotes/nls/fte (FTE 23.10, -0.15, -0.63%) /quotes/comstock/24s!e:fte (FR:FTE 16.70, +0.21, +1.27%) over their Mobinil joint venture in Egypt.
Sawiris said that while France Telecom and Orascom are still talking to try and find a resolution to their disagreement, he was not very optimistic.
"The positions are very far apart," he said.
Sawiris is determined to stay in Egypt because it is his home market and said he's not interested in selling the business. He added that while the dispute is draining a lot of management time it doesn't seem to be affecting the business in any significant way.
Orascom could play part in consolidation in Pakistan
There was a bit of good news from Pakistan, however, where Orascom also operates. There, the political situation has stabilized, as has the currency, Sawiris said. Orascom added around 1.5 million new subscribers in Pakistan last year.
He believes, however, that there is a need for consolidation in that market and said that Orascom wouldn't mind playing part, particularly as attractive opportunities around the world to enter new markets have become scarce, he said.
India, for instance, is of no interest to Orascom, he said.
"India is done. Anybody who wants to go to India today is suicidal," he said.
In the future, Sawiris believes that the name of the game for operators of Orascom's size and for carriers with a leading position in only one country like KPN /quotes/comstock/24s!e:kpn (NL:KPN 11.53, 0.00, 0.00%) , Swisscom /quotes/comstock/06p!scmn-otc (CH:SCMN 389.68, +4.68, +1.22%) or Belgacom /quotes/comstock/24s!e:belg (BE:BELG 26.04, +0.22, +0.85%) , will be consolidation.
"Scale will matter more and more because of the prices that the bigger operators can negotiate on equipment and handsets but also on roaming princes," he said.
"Any smaller operator that's not part of a bigger group will be in trouble. The only salvation is to find a new partner."
Source MArket Watch
BARCELONA, Spain (MarketWatch) -- Egypt's Orascom Telecom may sell its Algerian operations if it receives a clear sign its investment in the fast-growing North African market is not welcome, Chairman Naguib Sawiris told MarketWatch in an interview.
"We are keen to stay in Algeria; it's one of our main assets and until this incident we were very happy there. But we need to understand if our investment is welcome there or not. If not, we will consider other options," he said on the sidelines of Mobile World Congress, the wireless industry's largest annual event.
Orascom's Algerian subsidiary has been contesting a $600 million tax bill going back to 2005. Sawiris said he has decided not to escalate the dispute at the international level but to pursue the local route and is confident it can be resolved relatively quickly.
But he said there is a lot of interest in Orascom's Algerian assets, and he would not hesitate to sell if the issue became too serious.
Orascom has exited markets before when it thought it could no longer achieve interesting returns there, selling its Iraqi operations for instance.
In the meantime Sawiris said Orascom faces no financial constraints after its $800 million rights issue and has enough cash to operate for the next two years.
"I didn't want to make any decision on the Algerian operations under the gun," he said.
But Algeria isn't the only headache for Orascom at the moment. The company is also locked in a long-standing dispute with France Telecom /quotes/comstock/13*!fte/quotes/nls/fte (FTE 23.10, -0.15, -0.63%) /quotes/comstock/24s!e:fte (FR:FTE 16.70, +0.21, +1.27%) over their Mobinil joint venture in Egypt.
Sawiris said that while France Telecom and Orascom are still talking to try and find a resolution to their disagreement, he was not very optimistic.
"The positions are very far apart," he said.
Sawiris is determined to stay in Egypt because it is his home market and said he's not interested in selling the business. He added that while the dispute is draining a lot of management time it doesn't seem to be affecting the business in any significant way.
Orascom could play part in consolidation in Pakistan
There was a bit of good news from Pakistan, however, where Orascom also operates. There, the political situation has stabilized, as has the currency, Sawiris said. Orascom added around 1.5 million new subscribers in Pakistan last year.
He believes, however, that there is a need for consolidation in that market and said that Orascom wouldn't mind playing part, particularly as attractive opportunities around the world to enter new markets have become scarce, he said.
India, for instance, is of no interest to Orascom, he said.
"India is done. Anybody who wants to go to India today is suicidal," he said.
In the future, Sawiris believes that the name of the game for operators of Orascom's size and for carriers with a leading position in only one country like KPN /quotes/comstock/24s!e:kpn (NL:KPN 11.53, 0.00, 0.00%) , Swisscom /quotes/comstock/06p!scmn-otc (CH:SCMN 389.68, +4.68, +1.22%) or Belgacom /quotes/comstock/24s!e:belg (BE:BELG 26.04, +0.22, +0.85%) , will be consolidation.
"Scale will matter more and more because of the prices that the bigger operators can negotiate on equipment and handsets but also on roaming princes," he said.
"Any smaller operator that's not part of a bigger group will be in trouble. The only salvation is to find a new partner."
Source MArket Watch
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