RIYADH, 9 March 2006 — Saudi Telecom said yesterday it was no longer interested in a 35 percent stake in Tunisie Telecom, making it the third bidder to pull out of Tunisia’s most valuable privatization.
“The company reviewed available foreign investment opportunities, based on the return on (foreign) investment compared with domestic investment, and decided not to go ahead with the Tunisie Telecom investment opportunity,” it said in a statement.
The partial privatization of Tunisia’s largest telecoms carrier and most profitable company has been expected to raise about $1.7 billion for the government. The sale initially attracted interest from several top European and Middle Eastern telecoms operators. France’s Vivendi Universal, France Telecom, and the United Arab Emirates’ Etisalat were among those to pre-qualify as potential bidders. Spain’s Telefonica and France’s Bouygues Telecom have pulled out of a list of contenders, while Vivendi and France Telecom have said that they are still interested.
The Tunisian government originally hoped to seal a deal by Dec. 13 but has repeatedly delayed the privatization bid deadline. Bidders now expect it to select a winner in April.
STC “is still looking at other investment opportunities,” the company said yesterday in an apparent reference to its interest in a third mobile phone license in Egypt. STC could not be reached for further comment.
“STC has more to gain focusing on the potential of the domestic market than buying a minority stake in Tunisie Telecom,” an industry source said.
Saudi Telecom last month named the head of its mobile phone operations, Saud Al-Duweish, as new chief executive officer (CEO) to replace Khaled Al-Mulhim.
The move highlighted STC’s intention to tap strong potential in the mobile segment and stand up to aggressive competition from private mobile phone operator Mobily.
The fixed line monopoly, whose net profit in 2005 rose 34 percent to SR12.45 billion ($3.32 billion), is only now beginning to venture into developing Internet services and its fixed line business is relatively under-exploited.