Company analysis: Qtel Group

Following the company analysis series recently published (Zain, Orascom and Etisalat, now is the turn of another telecom giant: Qtel Group.

Based in Qatar, The Qtel Group is a diversified telecommunications group with three business lines including consumer telephony, consumer broadband and corporate managed services. It is committed to expansion in line with its strategic vision of becoming a global top 20 telecommunications provider by the year 2020.

Over the past three years, Qtel Group has built a successful track record of acquisitions hence expanding its geographic footprint from 2 to 17 countries within the Middle East, North Africa and Asia, connecting more than 55 million customers. Re-capping on the company’s strategic achievements to date, the first international investment was in Oman where, Qtel won the second mobile operators’ license in 2004 and created Nawras.

By year-end 2006, Nawras had successfully captured over 31% of the Omani wireless market. Nawras has gone from strength to strength and has already delivered financial returns ahead of Qtel’s expectations. To strengthen Qtel’s strategy in the Managed Data Services market, the company opened the state-of-the-art Qatar Data Centre in early 2006 that hosts the region’s first AT&T Global Node. This facility connects directly to AT&T’s global network in 150 countries.

In late 2006, Qtel also took a 38% equity interest in NavLink – the MENA region’s leading provider of Managed Data Services. AT&T also have a 38% stake in the venture. In February this year, Qtel acquired 25% of the voting shares of Asia Mobile Holding Pte Ltd (AMH), in partnership with Singapore-based ST Telemedia. AMH holds controlling stakes in two multi-service operators; StarHub in Singapore, which has 2 million customers, and PT Indosat in Indonesia with 14 million customers.

As part of its comprehensive international growth strategy, Qtel acquired a Kuwait based National Mobile Telecommunications Company KSC – (Wataniya) from Kuwait Projects Company in a deal that gave Qtel an increasingly important and prominent role in the MENA region. Wataniya is now a well respected and successful company with operations in more than 7 countries. Wataniya has been in the mobile market for 8 years and is regarded as a successfull and innovative operator. From their initial operation in Kuwait, they have extended their footprint into Tunisia, Algeria, Iraq, Saudi Arabia, and the Maldives. Wataniya has also won a license to operate in Palestine.

Wataniya in Kuwait has over 1 million customers and is considered one of the more advanced network operators in the region, with strong ongoing revenues being generated from an array of innovative services. Tunisiana is a joint venture with Orascom and is a well-run and rapidly growing business with over 3 million customers. It currently has 48% market share, up from 45% last year. Nedjma in Algeria, is owned 71% by Wataniya and has over 3 million customers and an increasing market share. The mobile market in Algeria has substantial growth potential remaining, with current penetration at just over 50%.

Other operations within the Wataniya group include an iDEN (Integrated Digital Enhanced Network), ‘push-to-talk’ business in Saudi Arabia, a 49% shareholding in Asia Cell Iraq, a mobile start up in Palestine and an active mobile operation in the Maldives.

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