Orascom chief sounds warning

Orascom chief sounds warning

By Andrew Parker in Barcelona

Published: February 14 2008 02:00 | Last updated: February 14 2008 02:00

Orascom Telecom, a leading mobile operator in emerging markets, has raised the possibility that it could be sold as part of further industry consolidation.

Naguib Sawiris, chairman of Cairo-based Orascom Telecom, said some western telecoms companies were "doomed" to lose their places among the 10 largest by market capitalisation unless they increased their emerging markets presence.

He stressed Orascom was not for sale, but held out the possibility that it could eventually merge with a western telecoms group.

"These western incumbents do not have any choice but to try and partner with one of the emerging market players so they can keep their position," Mr Sawiris told the Financial Times. "If they don't do that they are doomed to go out of the list."

He gave the example of France Telecom, saying that unless it bought a leading mobile operator in developing countries such as MTN, Africa's largest wireless business, the Paris-based group would lose its position as one of 10 largest telecoms companies.

Orascom has mobile businesses in Africa and the Middle East, and its market capitalisation has increased from $340m in 2003 to $15.5bn today, reflecting how exposure to developing countries is boosting valuations.

Mr Sawiris said he had been approached by western telecoms companies interested in buying Orascom or forming an alliance, adding: "I am not interested in selling. I have always said that I think my exit will be one day joining one of these players . . . I believe that the consolidation is feasible and unavoidable long term."

Meanwhile, he expressed confidence that private equity firms would purchase a minority stake in Weather Investments, his private holding company.

Last month, Orascom secured a 25-year licence to provide mobile phone services in North Korea, and will launch a trial within the next three months in what is one of the world's last greenfield wireless sites.