MTC-Vodafone wins second GSM licence

25 April 2003
A team of Kuwait's Mobile Telecommunications Company (MTC)and the UK's Vodafone was selected on 22 April for the licence to operate the second GSM network in the kingdom. The new entity, known as MTC-Vodafone Bahrain, plans to launch its services by the fourth quarter and invest more than $120 million over three years in building its network and developing third-generation (3G) mobile services. The concession to operate the licence is for 15 years (MEED 28:3:03).

MTC is the majority shareholder in the new venture, with a 60 per cent stake, followed by a group of local institutional and private investors which at present accounts for a further 17 per cent. Under the terms of the licence, the local content in the company must be increased to 40 per cent within 90 days of the licence being awarded. Vodafone will not keep an equity position but will act as the technical partner.

The intention is to broaden the ownership of the company further by divesting 25 per cent of the stock through an initial public offering (IPO) in conjunction with a planned listing on the Bahrain Stock Exchange in 2006. National Bank of Kuwaithas acted as the financial adviser to MTC on the transaction.

Ten companies were competing for the licence, which ends the monopoly on mobile services enjoyed by the present incumbent, Bahrain Telecommunications Company (Batelco). In March, the government shortlisted three bidders: the local Kingdom Investmentsin consortium with Wataniya Telecom Bahrain, the local subsidiary of Kuwait's National Mobile Telecommunications Company (Wataniya); a company identified as Kalaam; and the MTC-Vodafone venture. Vodafone, which already has ties with MTC in Kuwait, will provide technical support for the company through a strategic co-operation agreement (Kuwait, MEED Special Report, 21:2:03, pages 27-28).

Mobile penetration in Bahrain stands at about 50 per cent of the 650,000 population. The Telecommunications Regulatory Authority, which was established to oversee the liberalisation of the sector, intends to launch nine further operating licences, for fixed-line, multiple voice, data acquisition, internet and very small aperture terminal (VSAT) services (Telecoms, MEED Special Report, 10:4:03, pages 33-34).

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