France Telecom close to buying minority stake in Korek

BAGHDAD / IraqiNews.com: France Telecom is close to signing an agreement to acquire a minority stake in Iraqi mobile phone operator Korek Telecom, a person familiar with the matter told Dow Jones Newswires Tuesday. The deal would represent a “moderate” investment for the French telecom operator, the person said. Buying a stake in Korek would be in line with France Telecom‘s goal to double revenue from emerging markets over the next five years, chiefly targeting Africa and the Middle East to offset slowing revenue growth in mature markets. Just last week the group sealed a deal to buy a 40% stake in Morocco’s second-largest operator Meditel for EUR640 million. “I can see why it’s attractive for a company like France Telecom. The market still has high growth potential and it only has three players, which is always a good thing,” said Martin Mabbutt, research analyst at Nomura. According to Nomura’s latest estimates, Korek Telecom had a market share of around 17% at the end of 2009. It is the third-largest operator behind behind Asiacell, which had around 35% share, and Kuwait’s Mobile Telecommunications Co., or Zain, which is the market leader with around 49%. The penetration rate, or the percentage of the population using a mobile phone, in Iraq is around 70%, Nomura also said. This compares with a rate of 97% in France. Last month, France Telecom said Iraq is part of a strategic region where it is looking at all investment opportunities but declined to comment on a report that it was in talks to acquire a minority stake in Korek. Korek Telecom was awarded Iraq‘s third national mobile license in 2007 and currently has around three million clients in the country, mainly in the Kurdish North. It has over 1,000 staff. The mobile phone company was founded in 2000 by Sirwan S. Mustafa, nephew of Massoud Barzani, President of the Iraqi Kurdistan region, who is chairman of the board and also owns all of Korek’s issued share capital, according to the company’s website. SH (S) 3