The UAE’s Etisalat has denied reports in the Persian Gulf’s Arabic-language press that it has signed an agreement to acquire a majority share in Korek Telecom, the smallest of Iraq’s three mobile phone operators.
In a statement on the Abu Dhabi…
The UAE’s Etisalat has denied reports in the Persian Gulf’s Arabic-language press that it has signed an agreement to acquire a majority share in Korek Telecom, the smallest of Iraq’s three mobile phone operators.
In a statement on the Abu Dhabi Securities Exchange, where the company is listed, Salem Ali al-Sharhan, chief financial officer of Etisalat, said, “We would like to inform you that Etisalat did not sign any memorandum of understanding in relation to the acquisition of a majority stake of the shares of Korek.”
Etisalat and Korek started talks in February 2008, but the two companies have repeatedly failed to agree the terms of a deal for Etisalat to takeover Korek and expand its network throughout all of Iraq.
Korek has fallen far behind Iraq’s two largest mobile phone operators – Kuwait’s Zain and the Qtel-owned Asiacell – because it lacks the financial resources to build a network outside its stronghold in the Kurdish-controlled areas of northern Iraq.
In February, Etisalat, which is financially stronger than most other Arab telcos, said that it planned to expand into six new Arab markets – one of which would be Iraq – during 2010. Mohammad Hassan Omran, chairman of Etisalat, said at the time that the company was “near to finalising a deal with Korek”.
If Etisalat does acquire Korek, it will have to list a 25-30% stake of the company on the Iraq Stock Exchange under a condition in the company’s mobile phone licence.
Etisalat’s shares fell 1.9% from AED10.80 ($2.94) to AED10.60 on the news.
