STC on hunt for large acquisition

Saudi Telecom Co. (STC) is looking for one or two large acquisition opportunities either in Africa or Asia in its bid to set foot in foreign markets, a senior company official said late on Sunday.

"The board is fully aware of our vulnerability to the growing competitition here, so we are thinking big and looking for an operator with a foothold on several markets, 15-20 million users," the official said after a shareholders general meeting in Riyadh.

"We have huge cash flow and zero leverage," he said on condition of anonymity. "We can easily raise between $10 and $15 billion in debt for an acquisition that really fulfills our ambitions," the official said.

STC's cash flow topped $4 billion at the end of 2006.

The state-controlled firm is the only one of the four largest Arab telecom firms that has not made acquisitions, even after losing its mobile phone monopoly in 2005.

Chief Executive Officer Saud al-Duweish said last month STC was focusing in its search on emerging markets in the Middle East, Asia and Africa and that it had identified targeted markets, investment mechanisms and financing means.

STC is aware there are not that many opportunities left in the market, the source said.

"That is why we are going for the big players. The market could at any time become a buyers' market after the recent rally in stock prices," he said.

STC was in talks with a consortium led by Kuwait Projects Co. for months before the latter sold a 51% stake in Kuwait's National Mobile Telecommunications Co. to Qatar Telecommunications Co. for $3.72 billion.

STC had been planning to borrow 6 billion riyals ($1.6 billion) from a consortium of local banks to help finance the Kuwaiti purchase, the source said.

Competition will intensify this year when the kingdom licences a third mobile phone firm and ends Saudi Telecom's fixed-line monopoly.

Second mobile operator Etihad Etisalat, better known by its Mobily brand, has managed to win more than 6 million users since it started business in May 2005.

STC mobile phone users rose from some 9 million before Mobily began business to 14 million now, company officials say.

Mobily is an affiliate of United Arab Emirates-based Emirates Telecommunications Corp.

Print | Email | Discuss this article |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM