Wednesday, February 24, 2010

Kuwait's Zain To Focus On Middle East, Eyes Expansion

[zawya] Kuwait's Mobile Telecommunications Co. (ZAIN.KW), or Zain, will focus on expanding in the Middle East as part of its new strategy and is eyeing opportunities after the telecom operator entered exclusive talks to sell its Africa operations, the company's chief executive said Tuesday.

Zain sees growth from its operations in Saudi Arabia, Iraq and Sudan and is interested in a long-term license agreement in Lebanon once the government privatizes the telecommunications sector, Nabil bin Salama said in an emailed statement.

"Zain Group has big growth opportunities in the markets of Iraq, Saudi Arabia and Sudan," said Salama, who was appointed chief executive earlier this month.

"The group is not only interested in the Lebanese market, it is also interested in any other opportunities to expand if it gives good returns and conforms with the group's strategy for the new phase," said Salama.

Zain is in exclusive talks until March 25 with India's Bharti Airtel (532454.BY) to sell its Africa operations, excluding Sudan and Morocco, for $10.7 billion, including debt. Zain expects net proceeds of up to $5 billion from the Africa asset sale after paying certain liabilities and any realized returns will be added to the company's second quarter accounts.

The Africa asset sale will help Zain clinch new investment opportunities, Salama said.

Zain's new Middle East focus reverses the company's aggressive expansion strategy, spearheaded by former chief executive officer Saad Al Barrak, which was aimed at turning the company into a top-ten global player by the end of 2011.

"The assets they have got in the Middle East are higher return assets, but the growth levels will clearly be lower than what they would have been with Africa in the portfolio," said Martin Mabbutt, a London-based telecom analyst with Nomura International.

Zain announced earlier in February Al Barrak's resignation, without citing a reason for the move.

Salama, who served briefly as communications, water and electricity minister in 2009, assumed his duties on Feb. 14. The sale of the Africa assets will trim Zain's operations from 23 countries to eight markets in the Middle East and North Africa.

Kuwait's Zain To Focus On Middle East, Eyes Expansion

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