Bahrain Telecommunications is seeking a credit rating to tap debt markets and raise funds for acquisitions as competition at home forces it to look abroad for growth, chief executive officer Peter Kaliaropoulos said.
The fixed and mobile-phone and internet-service provider, known as Batelco, may receive the rating in about eight weeks, Kaliaropoulos said in a telephone interview on Monday. The company is looking for acquisition targets valued at about $1.5 billion from North Africa to the Asia-Pacific region, he said.
Middle East phone companies are expanding abroad into markets with young and growing populations. These countries often have lower penetration rates, or proportions of people with phones, than more developed European or Persian Gulf markets.
“Our challenge is finding acquisition targets that are right at the right price,” Kaliaropoulos said. “We are in discussions. The global economic environment has created opportunities as prices for assets have come down, but the good targets people aren’t selling.”
Batelco, whose Middle East business includes divisions in Saudi Arabia and Jordan, could raise about $1.2 billion in debt to foster expansion outside the region. JPMorgan Chase & Co. is advising Batelco in pursuing a rating, Kaliaropoulos said. The company has no plans to sell debt at the moment and will borrow depending on its needs for acquisitions, he said.
The company aims to form “clusters” in regions where it sees growth and a high level of phone traffic between countries within those markets, he said. Kaliaropoulos didn’t give further details on what companies Batelco was pursuing or how advanced talks were.
At home, Batelco’s average revenue per user, an industry measure of how profitable each client is for the company, has slumped by 12 percent to 15 percent in the last year to about $10 now, Kaliaropoulos said.
The company said last month that second-quarter profit declined 20 percent as greater competition in its home market eroded sales, even as customer numbers rose. Viva, a unit of Saudi Telecom Co., became Bahrain’s third mobile-phone company when it started services in March. Batelco also competes with Kuwait’s Mobile Telecommunications, known as Zain.
Kaliaropoulos said the company has not received any instructions from government authorities to restrict services of Research In Motion’s BlackBerry smartphone after regulators in the UAE ordered phone companies to cut off some e-mail and messaging services in October.
“There hasn’t been any consultation between us and the regulator on this,” he said.
Bahrain is imposing a ban on sharing of a local news service on BlackBerry devices to avoid “confusion and chaos,” Gulf News reported April 9.
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