The new telecom company, expected to begin operations in the second half of this year, will offer 20 per cent of its shares to the public through an IPO.
According to the Telecom Regulatory Authority (TRA), the UAE government owns 50 per cent of the capital of the new company, while Mubadala Development Company and Emirates Communication and Technology LLC holds 25 per cent each of EITC.
The founding investors of the new telecommunications company are due to meet later during the year to reduce their total share ownership, thus allowing 20 per cent of the company’s capital to be offered to the public through an IPO.
Sources in the investment banking circles told Khaleej Times that EITC which has a paid-up capital of Dh4 billion has already deposited the promoters contributions with Emirates Bank.
“Through this deal, at one stroke EBI has managed to mobilise the single largest corporate deposit of Dh4 billion from EITC while securing the lead management mandate for the IPO,” said a banking industry source.
The size and date of the public issue are yet to be finalised.
The UAE Telecom Supreme Committee has approved the memorandum and articles of association of the new company in order to start its registration and other formalities with concerned departments. Once registration and licensing process is complete the founding investors are expected to decide how much to be offered to the public through the IPO.
TRA sources have confirmed that the new entity will offer mobile, internet and fixed line services, starting with mobile services in the second half of this year. As the second operator of a wide range of telecommunications services in the UAE, EITC's public offering is eagerly awaited by the market.
“EITC will be an independent telecom operator and is expected to function as an effective competition to Etisalat. As the UAE market is well developed for GSM, internet and wireless services, the new entity is expected to gain a critical minimum market share in short time frame,” said an analyst.A federal decree issued in April 2004 restructured the telecom sector in the UAE, ending the monopoly held by Etisalat, which is also a partner in the UAE's Thuraya Satellite Telecommunications Company. Etisalat has over 4 million GSM users and close to 430,000 Internet subscribers in the UAE.
When we choose to look away for good, we are as complicit as those at the helm of this atrocity
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