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Orascom Telecom seeks arbitration in Tunisia telecom row - Daily News Egypt

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Orascom Telecom seeks arbitration in Tunisia telecom row

CAIRO: Egypt-based multinational Orascom Telecom (OT) said on Thursday it was asking the International Chamber of Commerce to arbitrate in its dispute with Kuwait s Wataniya Telecom over their joint venture mobile operation in Tunisia. OT said it wanted the chamber s International Court of Arbitration to enforce what it called OT s contractual right …


CAIRO: Egypt-based multinational Orascom Telecom (OT) said on Thursday it was asking the International Chamber of Commerce to arbitrate in its dispute with Kuwait s Wataniya Telecom over their joint venture mobile operation in Tunisia. OT said it wanted the chamber s International Court of Arbitration to enforce what it called OT s contractual right to acquire Wataniya s 50 percent in the Tunisian company, known as Tunisiana. It said OT owned the other 50 percent of Tunisiana under a joint venture set up after OT acquired the Tunisian license in 2002. It did not give the Kuwaiti company s position on relinquishing its stake.

In other telecom news, Nigeria has opted for a negotiated sale to fast-track the privatization of its debt-laden telecoms firm Nitel after two failed auctions, the privatization agency said on Thursday. The Bureau for Public Enterprises (BPE) adopted the new process after it rejected a $256.5 million offer in December by Orascom for a 51 percent stake, because it fell below the reserve price, and called for fresh bids in January. The agency said another round of competitive bidding would take a year, during which Nitel s value would decline further and its liabilities would increase, making it less attractive. Given that Nigeria s bargaining position regarding Nitel s sale can only decline over time, Nigeria is well served to close a transaction while it can still negotiate from a position of strength, the BPE said in a statement. Nitel s liabilities jumped to 130 billion naira in October 2005 from 74 billion naira in 2003, while pre-tax income dropped to 1.5 billion naira in 2005 from 15 billion naira in 2002, figures provided by the BPE showed. Its revenue fell to 22.8 billion last year from 41 billion three years earlier, while the market share of its mobile unit, M-Tel shrank to 5 percent from 11 percent. Last week, thousands of Nitel staff marched in major cities to protest several months of unpaid salaries. The collapse of the sale to Orascom was Nigeria s second failure to sell Nitel, which analysts say is overstaffed, inefficient and lumbered with unquantified pension liabilities. The privatization of Nitel – supposed to be one of the flagship measures in the government s economic reform plan – has been dogged by controversy since 2002 when its sale to a London-registered firm collapsed after the company failed to come up with the cash. The $1.3-billion deal would have been Africa s biggest privatization then had it gone through. In 2004, Nigeria cancelled a contract to manage Nitel with Dutch consultancy Pentascope half-way into the three-year deal, citing poor performance. The agency said Orascom and five other firms short-listed during the former process are still in the race for a majority stake in Nitel, and a preferred investor would be chosen from the six suitors. Under the new process, if the preferred bidder s offer is unacceptable, all suitors would be given the same transaction documents to make counter offers, the BPE said. The government would then review all the bids and make a decision. Nitel s other suitors in the last attempt at privatization included Newtel, a little-known consortium of Indian, Australian, Egyptian and Nigerian investors, and South African fixed-line operator Telkom. Chinese equipment vendor Huawei Technologies, Africa s leading mobile phone network MTN Group and Celtel, owned by Kuwait s MTC, had also expressed interest in Nitel. Nigeria is one of the world s fastest-growing telecoms markets, with a subscriber base that rose from around 500,000 in 1999 to about 20 million now, on investments of over $10 billion, according to industry experts. With a population of 140 million and a telecoms usage density that remains among the lowest in the world, analysts say Nigeria s potential for further growth is substantial. Reuters

Topics: FJP

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