Orascom has withdrawn from the Iraqi market and sold its Iraqna GSM network to Kuwait's Zain (formerly MTC) for US$1.2 billion. Iraqna is a subsidiary of Orascom Telecom Holding and Zain managed the purchase through its Iraqi subsidiary MTC-Atheer.
In August 2007, MTC-Atheer made a successful bid of US$1.25 billion to secure one of three 15-year nationwide licences awarded by the Iraqi Communication and Media Commission. Orascom however failed to secure a license, and faced with abandoning its existing GSM infrastructure in the country signed a tie-up with the Kurdish region Korek Telecom. The joint venture allowed Korek Telecom to use the Southern Iraqi infrastructure built up already by Iraqna. Korek Telecom took 30% of the joint venture and had an option to increase this to 48% by the beginning of last month. As no announcement was made, we presume that the option was not taken up and that Orascom retained its 70% stake in the joint venture.
It is understood that the two companies did not get along however, and in an interview on Al Arabiya TV over the weekend, Orascom's Chairman Naguib Sawiris confirmed that the troubles between the companies had forced him to sell the Iraqi company and disolve the joint-venture. He declined to explain what the problems between the two companies had been.
As Orascom was able to sell its Iraqna infrastructure to Zain without involving Korek Telecom, we also presume that the legal niceties to form the joint venture had not been concluded.
The resulting MTC-Atheer operation’s network will span over 15,000 sq km, covering all the major populated areas and this network will be further expanded to cover all of Iraq in the future. Recently MTC-Atheer extended its services to Kirkuk in the north of Iraq.
The MTC-Atheer operation in Iraq will be re-branded Zain in early 2008.
Posted to the site on 2nd December 2007
Posted to: www.cellular-news.com/story/27817.php