Omantel, which is about to face the arrival of a third mobile operator in its home state, said it has paid the equivalent of $846 million for 425 million shares in Zain.
CFO Martial Caratti said: “Acquiring a minority stake in Zain is a deliberate investment for Omantel as we position ourselves as a leading digital service provider.”
The Omani company said that, following the deal, there is an “opportunity to cooperate across core business functions”.
Omantel said it “will explore ways to cooperate in several key areas including the wholesale telecom business, operations and networks, commercial activities, and knowledge and experience sharing”.
The deal “will also allow Omantel to gain exposure to nine growth markets with a total population of 175 million, and provide significant growth drivers across a range of services and applications”, said the company.
Caratti, a former Orange and Ooredoo executive, said the move was “in line with our Corporate Strategy 3.0, launched in 2015”.
He added: “We have always emphasised that growth will come from continued diversification, and this acquisition positions Omantel for the future.”
The state of Oman, which owns Omantel, is about to announce a third player in what is now a two-operator mobile market – though the shareholding in Zain might put one of the bids in doubt.
Etisalat and Saudi Telecom (STC) as well as Zain bid for the third mobile licence for Oman, allowing one of them to compete against Omantel and Qatar-based Ooredoo. Oman’s Telecommunications Regulatory Authority said in May that it will announce a shortlist on 14 August and name the winner on 4 September.
Omantel clearly sees its investment in Zain as crucial to its long-term policy, allowing it to benefit from “Zain’s global scale and international expansion”, said the company.
“Zain is a high performing and innovative telecoms business with a complementary geographical footprint. It is the most advanced digital service provider in the MENA [Middle East North Africa] region with strong partnerships with leading technology players across the globe,” said Omantel in a statement.
“It has a fast growing and lucrative portfolio of diversified services”, the company added, listing data monetisation, business-to-business, fibre-to-the-home and smart city initiatives.
