Qtel branches out with Wataniya buy

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Qatar Telecommunications’ (Qtel) US$3.72 billion capture of a controlling stake in Wataniya has propelled it into the top league of regional telco players, analysts said this week.

Marc Hammoud, senior telecoms analyst at investment bank Shuaa Capital, said the deal — announced March 2 — will help Qtel to diversify its revenue base as it prepares for its domestic market to be opened up to a second operator.

“Qtel is now in the race of top telco operators that are expanding in the region. They are now one of the front runners in what we call the acquisition strategy of those operators that voice their strategy to expand internationally like Etisalat, Orascom and MTC,” he told IT Weekly.

The deal, which sees Qtel acquire 51% of Wataniya, Kuwait’s second mobile operator, is the largest-ever deal in the Middle East’s telecommunications sector, surpassing the US$3.3 billion takeover MTC paid to acquire Celtel in 2005.

It also represents a hefty premium on Wataniya’s share price pre-acquisition — shares in Qtel fell following last week’s announcement.

Qtel CEO Naser Marafih acknowledged in an interview with Reuters last week that the price represented a premium but insisted it would achieve good returns. “This acquisition is not being built from scratch,” he said.

Hammoud said the price paid was in line with the premium paid on other such deals, and noted that Wataniya was doing well in its seven regional operations.

Delta Partners’ analyst Kristoff Puelinkckx said the acquisition of Wataniya “really puts Qtel on the map of the other bigger regional players”.

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