Analysts believe the deal could give the Iraqi mobile operator an enterprise value of $1.5 billion, and eventually lead to France Telecom taking a controlling stake in the operator. As part of the France Telecom’s Conquests 2015 plan, the company aims to secure 300 million international customers over the next four years, with a special focus on emerging market growth in Africa, the Middle East and Asia.
“If France Telecom is interested in investing in Korek, it is a natural progression of investment considering they already have operations in Egypt, Tunisia and Jordan,” said Alla Numair, senior research analyst at Arab Advisors Group. “Jordan is very close to Iraq, which gives the French operator the ability to help any operator it buys in Iraq.”
Korek Telecom has 2.5 million subscribers and competes with Zain Iraq and Asiacell which have approximately 12 million and seven million subscribers respectively (see geographical focus on page 34). The Ministry of Communication (MoC) gained approval to hold a tender off er for a fourth mobile licence in 2010, for which the MoC will hold a 35% share.
“As the Iraqi Telecommunications and Post Company (ITPC) has issued a fourth GSM licence it will be very good for the market as a whole if France Telecom acquires a stake in Korek, particularly for neighbouring countries,” said Kassim Mohammed Al-Hassani, director general at ITPC. “Iraq needs foreign investment to rebuild. It is vital.”
As part of the company’s investment in emerging markets, France Telecom has completed its 40% stake acquisition of Morocco’s Medi Telecom (Meditel) for approximately €640 million. Meditel is Morocco’s second largest operator and holds fixed and 3G telephony licences. The acquisition is consistent with the Conquests 2015 plan, as the company has over 10 million subscribers and a 37% market share.
