Marketplace Middle East - Blog
12/20/07
Wireless Wonder

There is a tendency to think of Global 100 brands when recalling growth leaders in different sectors. That would be a mistake when defining the pacesetters in the mobile phone market.

Vodafone, Orange/France Telecom, AT&T Wireless, T-Mobile and Telefonica spring to mind immediately. How about China Mobile, MTS in Russia, Bharti Airtel in India and Orascom in Egypt?

Like the emerging economies in the region we cover on Marketplace Middle East, there is a track record of better than average growth. Case in point certainly is Orascom.

When Vodafone for example paid $180 billion for Mannesmann in Germany back in 2000, Orascom was buying properties in Pakistan, Iraq and throughout North Africa. In sum founder Naguib Sawiris put Cairo at the centre of his global map and built his network from there. Less competition, faster growth and fewer buyers for the licenses he wanted and eventually landed.

The result: Sawiris is confident he can cross the 100 million-customer mark in 2008. He is not far off now with 90 million when adding his most recent purchases in Italy (Wind) and Greece (Tim Hellas). Those two countries are part of his Greater Mediterranean strategy.

While his forays into high growth markets are well documented, his next chess moves are not. Sawiris shared some of his insights this week for the time afforded in our television programme.

He is not planning to exit the market: “We’re building a war chest …what we are trying to find now is a target we can acquire without a price war.”

He is eventually open to a global partner like his brother Nassef who sold Orascom Cement to the French: “If I ever do a deal like that, I would like more than 11 percent for sure and I would like to have a say in the company.”

He wants to go back into India: “We’d go back indirectly through someone who is already there but we don’t believe in any new entries there.”

He has been frustrated by China's lack of openness: “We’ve been shouting and screaming and saying that it’s not fair…so we’re trying to find a way to get into China and we think we have found a way.”

He believes newcomers such as Zain and MTN are willing to pay too much: “All our neighbours are full of cash, driving prices up.”

And there some other nuggets that are trademark Sawiris, someone who is not afraid to speak his mind and court controversy.

In a global market that is getting more, not less competitive, it is difficult for him to secure high growth opportunities. Vietnam and Cambodia hold great economic promise, but from a mobile phone market perspective are too saturated already.

North Korea has the DNA market traits that he likes. In his words, they seem “peace-loving” and the dismantling of their “nuclear things” is a positive. Negotiations for that market are underway.

Then what. After building an estimated net worth of $10 billion, why fight the tide of competition? His answer, “Telecom is in my blood. If I ever do something, I will remain in telecom.”

And remain controversial. He is known within Egyptian social circles for his round-the-clock energy and more. Beyond speaking his mind in business, he has other thoughts about trends in the Muslim world. Most recently he said that the growing ranks of women wearing the hijab or veil in the streets of Cairo gave him “the impression of being in Iran. I feel like a foreigner.”

The statement prompted a fatwa from a conservative sheikh to boycott his company.

One should not expect an impact on Orascom nor on the free-speaking billionaire.
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ABOUT THIS BLOG
John Defterios’ blog accompanies the weekly business program, Marketplace Middle East (MME) that is dedicated to the latest financial news from the Middle East. As MME anchor, John Defterios talks to the people in the know, finding out their opinions on the big business moves in the region, he provides his views via this weekly blog. We hope you will join the discussion around the issues raised.
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