Telecom Egypt likely to spend $1b on acquisition in Mideast or Africa

Cairo: Egypt's fixed-line monopoly telephone operator Telecom Egypt could spend at least $1 billion on an acquisition in the Middle East or North Africa to capture growth abroad, its chairman said.

"Our first priority in using our cash is for an acquisition, and one large one is better than several small ones," Akil Beshir said yesterday. "We could spend more than $1 billion."

Telecom Egypt faces saturation in its home market and competition for the first time, with Egypt due to sell a second fixed-line licence in September. The number of fixed-line subscribers in the second quarter grew only 0.1 per cent from the first quarter, the company said.

"We are looking at some opportunities that may be in the region," Beshir said, declining to give further details.

In March, Beshir told Reuters the company was in preliminary talks on an acquisition and hoped to conclude a deal by the end of the year.

The company was seeking an existing mobile and fixed-line operator and was looking at the Middle East, Africa, and Eastern Europe, he said.

"Our preference is for the Mena [Middle East and North Africa] region but if there is a good opportunity in Africa or Eastern Europe we will look at it."

The company had about 1.3 billion Egyptian pounds ($244 million) of available cash and could raise up to 16 billion pounds through debt, Walaa Hazem, telecom analyst at HC Securities, said in March.

Telecom Egypt owns 50 per cent of Algerian fixed-line operator Lacom.