OT acquired an 80 per cent stake in the African operator in 1999 and announced the proposed divestment this July, after winning Algeria's first private GSM licence for $737 million (MEED 10:8:01).

OT has already paid the first $368.5 million instalment for the Algerian licence, and the second half is due at the end of 2003. Long-term financing will be raised through a bond, and possibly a rights, issue.

In Late October, OT awarded Germany's Siemensa $75 million contract to install radio and transmission equipment in the Greater Algiers area. Earlier, the company selected Siemens for a Eur 176 million ($157 million) contract to supply part of the equipment for the network. The contracts fall under a general framework agreement between OT and the German electronics company. OT had earlier selected France's Alcatelas the principal supplier for the Algerian GSM network, and has already paid the company the first $10 million instalment of a Eur 420 million ($380 million) contract to supply and install equipment for the system.

The Algerian licence is being operated by Orascom Telecom Algeria, a joint stock company which is 51 per cent owned by OT and 49 per cent owned by Egyptian and regional investors and institutions. The chief executive is Lionel Coussi.