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Oman Telecom set to takeover Pakistan firm in June

Omantel, the smallest telecom operator in the Gulf Arab region by market value, is also in negotiations to buy a minority stake in a Gulf Arab telecom operator, Mohammed al-Wohaibi told Reuters.

Omantel said on Tuesday it was considering buying a Pakistani telecom company to expand outside its home market, where it lost its mobile phone monopoly in 2005 and will lose a fixed-line monopoly this year.

Wohaibi declined to name the Pakistani firm, but said the takeover would give Omantel access to Asia’s fourth most-populous country as competition grows at home.

An industry source in Pakistan said Omantel was in talks with Worldcall, which runs long distance and international (LDI) as well as wireless local loop (WLL) services.

“Quite a few companies have spoken to Worldcall in recent months, but Omantel has probably been the most serious one,” said the source, who is close to Worldcall.

Wohaibi ruled out buying into Warid Telecom, Pakistan’s third-largest mobile phone operator, which industry sources said this month it was in talks with several foreign firms to sell a minority stake.

“The Pakistani market is quite competitive, but there is still potential for growth,” he said.

Gulf consolidation

Pakistan’s mobile operators include CM PAK of China Mobile Ltd; Mobilink, a unit of Egypt’s Orascom Telecom; Norway’s Telenor; Ufone, a subsidiary of Pakistan Telecommunication Co. Ltd, and Instaphone, which is not publicly traded.

Pakistan Telecommunication is one of the five companies running fixed-line networks, but the other four have a virtually negligible share in the market.

Companies such as Worldcall and Telecard run wireless local networks.

Mobile penetration in Oman, a country of 2.5 million people, is more than 70 percent, he said.

“We are facing competition in mobile and will be facing competition in fixed-line services, and the market is very small,” Wohaibi said.

Gulf Arab telecom operators have been hunting for foreign assets as competition increases at home, and Asia has figured prominently in their expansion plans.

Qatar Telecommunications co., which operates Oman’s second mobile phone operator Nawras, this week completed the purchase of a majority stake in Pakistan’s Burraq Telecom.

Emirates Telecommunications Corp. bought a 26 percent stake in Pakistan Telecommunications for $2.6 billion in 2005.

Consolidation in the telecom sector is also taking place in the Gulf, the world’s top oil-exporting region.

Bahrain Telecommunications Co. said this week that several firms were eyeing a stake in the company.

Shares of Kuwait’s Mobile Telecommunications Co., the second-largest Arab telecom operator by market value, have rallied on newspaper reports that a Gulf-based investor was seeking a 10 percent stake in the firm.

Wohaibi declined to name the firm Omantel is eyeing in the Gulf.

Omantel shares last traded 1.04 percent higher. They have rallied 11 percent since the company said on May 13 its first-quarter profit climbed 12.7 percent, beating expectations.