MTN buys into European teleco
29 June 2009
Pan-African cellular operator MTN and Belgacom ICS are to combine their international carrier services (ICS) business, resulting in MTN holding an equity stake in the Belgium-based company, which will become the leading international wholesale operator in Africa.
In terms of the deal, MTN will gain a 20% stake in Belgacom ICS and the right to appoint two directors to the board, in return for the assets of MTN ICS, its international wholesale subsidiary. MTN will also mandate Belgacom ICS as the official international gateway for carrier services of MTN globally.
"This transaction is a natural next step following our successful strategic co-operation with Belgacom ICS since 2005," MTN chief operating officer Sifiso Dabengwa said in a statement this week.
"By combining our international carrier services activities, we seek to further improve the quality of the international service offering of our operations in Africa and the Middle East, while realising meaningful cost benefits."
The other shareholders in Belgacom ICS will be Belgacom, with 57.6%, and Swisscom, with 22.4%.
Mediterranean Network
MTN ICS, formerly known as Mediterranean Network, operated for more than 10 years as the international gateway for primarily the Investcom group of companies until its acquisition by MTN in 2006, and has since then contributed to the overall growth of MTN's international traffic and related services.
"MTN ICS will bring to the combined entity its knowledge of the African and Middle Eastern markets and the skills and experience of its team," said MTN ICS chief executive Elie Bardawil.
According to MTN, the combination of the international carrier services of Belgacom ICS and MTN ICS is expected to improve efficiencies and product offerings resulting from greater economies of scale.
"In addition to the anticipated efficiencies, the transaction is expected to positively impact the future growth of the larger combined entity which will become the leading international wholesale operator in Africa," MTN said.
The transaction should be complete during the fourth quarter of 2009, and is subject to approvals from the relevant government, regulatory and competition authorities.
SAinfo reporter
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