The dispute over Egypt's leading mobile player has been running for several years

The Egyptian Government has brokered a deal between France Telecom and Egyptian entrepreneur Naguib Sawiris’ operator Orascom Telecom that will see the two firms remain partners in leading Egyptian carrier EMCS, which operates under the brand Mobinil. Ownership of the operator has been the source of tensions and legal disputes between the two players for several years.

A statement from the carriers pledged that the agreement, signed on Wednesday, will “bring to an end all disputes in relation to their joint investment in Mobinil.”

The deal will usher in a revised shareholder agreement but there will be no change to the existing ownership structure or shareholder voting rights, the firms said.  The agreement will also see leading Egyptian ISP LinkdotNet absorbed into ECMS, widening the carrier’s offering to include broadband, a proposal that the firms said was welcomed by Egypt’s Minister for Communications and Information Technology.

Stephane Richard, CEO of France Telecom, promised to sustain investment in the country on the back of the deal: “Our two groups will now be able to continue working together in order to further contribute to the development of telecommunications services and information technology in Egypt,” he said. This market is very important for France Telecom and we will continue to invest and contribute our know-how in the years to come. In addition, this will also reinforce our commitment to maintain a strong R&D and Orange Business Services presence in Egypt.”

Regulatory approval allows France Telecom to consolidate its position in Egypt

Egypt’s financial regulator has granted approval for the purchase of the stake it doesn’t already own in the country’s leading carrier Mobinil by France Telecom’s Orange. For some time the deal has been the subject of a spat between France Telecom and Mobinil’s other principal shareholder, Egyptian player Orascom Telecom.

The dispute began in 2007, when Orascom initiated a lawsuit seeking to force the French carrier to transfer its Mobinil shares over to Orascom. However, the court ruled in France Telecom’s favour and required Orascom to transfer its stake in Mobinil’s holding company to the French incumbent.

Mobinil is about 51 per cent owned by ECMS, a holding company that was jointly owned by Orascom and France Telecom, but under was ruled in July to be owned exclusively by France Telecom. Orascom also owns 20 per cent of Mobinil directly.

Since the court order, France Telecom has been trying to pitch an acceptable offer to buy minority shareholders out of ECMS. However, the French firm has seen its efforts rebuffed by the Egyptian Capital Market Authority (CMA) for being too low.

Now, with an offer of 245 Egyptian Pounds per share, Orange, the CMA has finally given its blessing to the deal.

At the end of September 2009, Mobinil had 23.4 million subscribers, according to figures from Informa Telecoms & Media’s WCIS.

Orascom drops proceedings over Mobinil

Egyptian carrier Orascom Telecom said Sunday that it has dropped court proceedings against France Telecom over the long running spat involving Egyptian mobile operator Mobinil.

The dispute focuses on the ownership of Mobinil, with the companies accusing each other of failing to comply with the terms of a court ruling requiring Orascom to transfer its shares in Mobinil to France Telecom.

The spat began in 2007, when Orascom initiated a lawsuit seeking to force the French carrier to transfer its Mobinil shares over to Orascom. However, the court ruled in France Telecom’s favour and required Orascom to transfer its stake in Mobinil’s holding company to France Telecom.

Mobinil is about 51 per cent owned by ECMS, a holding company that was jointly owned by Orascom and France Telecom, but under the latest ruling is now owned exclusively by France Telecom. Orascom also owns 20 per cent of Mobinil directly.

Since the court order, France Telecom has been trying to pitch an acceptable offer to buy minority shareholders out of ECMS. However, the French firm has seen its efforts rebuffed by the Egyptian Capital Market Authority (CMA) for being too low.

Orascom said Sunday that the court proceedings are no longer necessary, in light of recent public pronouncements by France Telecom, “Which make it clear that, regardless of the fact that the 30 days period (as extended) under the sale contract arising out of the Award has lapsed, FT has no intention of extending a public tender offer on the same terms as those contained in the Award and is therefore not in a position to conclude the sale as mandated by the ruling of the Capital Market Authority issued on 7 April 2009 in any event.”

The Egyptian carrier said it would discontinue proceedings before the Economic Court “to avoid unnecessary costs and in an amicable gesture to focus attention on the business of running Mobinil,” adding that it hopes further litigation can be avoided.

France Telecom takes bigger stake in Mobinil

European carrier France Telecom said Sunday that it has secured commitments from minority shareholders to acquire yet more of leading Egyptian mobile operator Mobinil.

Mobinil is at the centre of an ongoing dispute between Egyptian carrier Orascom Telecom and France Telecom, that began in 2007, when Orascom initiated a lawsuit seeking to force the French carrier to transfer its Mobinil shares over to Orascom.

However, the court ruled in France Telecom’s favour and required Orascom to transfer some of its stake in Mobinil to France Telecom.

Mobinil is about 51 per cent owned by ECMS, a holding company that was jointly owned by Orascom and France Telecom, but under the latest ruling is now owned exclusively by France Telecom. Orascom also owns 20 per cent of Mobinil directly.

But since the court order, France Telecom has been trying to pitch an acceptable offer to buy minority shareholders, which hold the other 49 per cent out of ECMS. However, the French firm has seen its efforts rebuffed by the Egyptian Capital Market Authority (CMA) for being too low.

So on Sunday, France Telecom said that its mobile subsidiary, Orange, has received expressions of interest from a number of minority shareholders in ECMS, and has secured a commitment to buy shares in ECMS at a price of EGP230 (€29) per share.

Orange said it has secured commitments for more than 3 per cent of the issued share capital of ECMS, representing more than 6 per cent of the free float of ECMS.

Orascom rejects Mobinil buyout again

Egyptian carrier Orascom Telecom has rejected yet again an offer from France Telecom to buy out minority shareholders in leading Egyptian mobile operator Mobinil.

The Egyptian regulator recently ruled that France Telecom should make an offer to buy all shares in Mobinil as part of its purchase of Orascom’s stake in ECMS, a holding company that owns 51 per cent of Mobinil.

The deal had been sweetened by France Telecom after its last attempt to carry out this move was scuppered by the Egyptian Capital Market Authority (CMA), which sided with Orascom and said the initial offer was not good enough. No details were given on how France Telecom increased it’s offer, but Orascom released a statement rejecting the deal.

Back in 2007, Orascom initiated a lawsuit against France Telecom seeking to force the French carrier to transfer its Mobinil shares over to Orascom.

However, the court ruled in France Telecom’s favour and required Orascom to transfer its entire stake in Mobinil to France Telecom.

Twitter is gaining traction in a big way; and not just from the bottom up. The Informer has heard of more than one company in the industry that has made Twitter accounts mandatory for employees, teams or working groups. Posting 130 character updates is becoming an obsession for these people – but are they right to be so enamoured of it?

Certainly there are those who believe that Twitter serves principally as a delivery mechanism for the most slack-jawed inanities the human brain is able to conjure; content comprising the kind of thoughts that Ma Nature intended to remain safely within the cranium. Whatever useful, interesting information might be available on Twitter, these people argue, is obscured by a clamour of bird-brained vapidity that is perhaps most effectively represented by the seagulls from Finding Nemo.

The Informer met up with an industry chum this week who was fresh from a board meeting at a prominent handset organisation. He had dared to question the value of Twitter as the other attendees evangelised its importance. His point of view, he said, stunned the room into awkward silence. Clearly still taken aback at the reaction he’d drawn, he told the Informer: “It was like I’d openly admitted to being a racist”.

So, do you work for a company that makes you tweet? If so, the Informer would like to hear from you – and you are not limited to 130 characters.

Twitter can at least lay claim to being the current ‘big thing’ and, this week, a group of clever people from the UK’s De Montfort University were given the task of predicting a service that will usurp it in a bid to foretell what ethical pitfalls might arise. Internet banking spawned phishing, for example, and the rise in social networking sites has resulted in worrying amounts of personal information being made openly available – as well as causing the characters ‘lol!’ to appear inexplicably at the end of every single statement like some kind of involuntary grammatical spasm.

Under the two year project, entitled Ethical Issues of Emerging ICT Applications (ETICA), researchers at De Montfort are aiming to identify information and communication technologies that are likely to emerge in the next 10 to 15 years and spot any unforeseen drawbacks ahead of their widespread adoption.

Coverage of this story on Telecoms.com this week generated some interesting feedback, including the following prediction:

“Identity is the issue.

Ethics is absent, equality is absent and freedom from persecution is absent with current forms of identity.

The one-way authoritarian approach to identity practiced by governments is the antithesis of equality and democracy.

Identity is the foundation of democracy.

It is also the next big thing, in so many ways. The enabler.”

Nope, the Informer didn’t understand it either.

Anyway, one of the questions that most often gets asked of Twitter – which is believed by many to be in the crosshairs of Google’s acquisition gun – is how or if it can make money. Twitter’s own response to this is up there with Bill Clinton’s famed “it all depends on what the meaning of the word ‘is’ is”. The firm says: “Twitter has many appealing opportunities for generating revenue but we are holding off on implementation for now because we don’t want to distract ourselves from the more important work at hand which is to create a compelling service and great user experience for millions of people around the world.” Ooooooooookay…

If Google is thinking of buying Twitter, it may want to take a look at the decision taken this week by eBay to sell VoIP outfit Skype. eBay paid $2.6bn for Skype in 2005, which in 2008 generated revenues of $551m, up 44 per cent from 2007. eBay recently said it expects Skype to hit $1bn in 2011 revenues, with CEO John Donahoe saying: “Skype is a great stand-alone business with strong fundamentals and accelerating momentum.”

The fundamentals are not strong enough, though, nor the momentum accelerating at a sufficient rate to persuade Donahoe that holding onto the VoIP carrier is a good idea. “It’s clear that Skype has limited synergies with eBay and PayPal,” he said. The firm plans to IPO Skype in the first half of next year, although specific timing will be decided by market conditions.

In related news, Skype said this week that one million people downloaded its Skype for iPhone application in the first 36 hours of its availability in Apple’s App Store. In just over a week, downloads passed the two million mark, putting Skype on more than six per cent of all iPhones and iPod Touch devices, and adding almost half a million new Skype users.

Google was in the news this week with its Android OS, giving developers a peak at the next generation of the platform. According to a posting on the Android developer blog on Monday, version 1.5 of the OS introduces APIs for features such as a soft keyboard that works in both portrait and landscape orientation; home screen widgets such as an analogue clock, calendar, music player, picture frame, and search; live folders; and speech recognition, bringing some much wanted functionality to the Android device portfolio.

The Android development team has also made changes to the developer tools and the structure of the SDK itself, with future SDK releases including multiple versions of the Android platform. This means that developers can target different Android platform versions from within a single SDK installation, and also means developers can install Android SDK add-ons to access extended functionality that might be provided by OEMs, carriers, or other providers.

Sticking with handsets, the financial crisis was expertly illustrated by Nokia this week, which reported a 90 per cent drop in profits for the first quarter. The Finnish firm reaped E122m, down from E1.2bn in Q108. Net sales fell 26.7 per cent year on year to E9.3bn, from Eur12.7bn.

As estimated industry mobile device volumes sank 14 per cent year on year to 255 million units in the first quarter, Nokia’s own mobile device volumes dropped 19 per cent year on year and 18 per cent sequentially to 93.2 million units. Nokia attributed this partly to carriers running down inventory – either way, the firm’s market share, by its own estimations, dropped two points to 37 per cent.

ASPs dropped to E65, down from E71, but the company reported strong sales of its touchscreen 5800 product, which surprised the Informer somewhat, because he thought it was a bit ropey. Nokia shipped 2.6 million of these phones in Q1, with cumulative shipments of more than 3 million units since the device’s launch in late November 2008.

These results are what counts for rosy news in the handset space, though. It’s not looking quite so good for Sony Ericsson. A further 2,000 jobs at the firm are for the chop as Q1 shipments were down 35 per cent year on year to 14.5 million units, with the firm blaming de-stocking, like Nokia. But Gartner’s handset market specialist Carolina Milanesi suggested that Sony Ericsson’s portfolio should also shoulder some of the blame. “Imaging and music are now part of most of the competitors’ portfolios, and Sony Ericsson is finding it more and more difficult to have its products standout,” she said, before tapping another nail into the coffin. “The ‘idou’ device presented in Barcelona is certainly a step in the right direction for Sony Ericsson but one cannot help but wonder if it will be too little too late given it will only be on the market at the end of the year.” Eek.

Chip maker Intel took a quarterly kicking as well, with profits down 55 per cent year on year to $645m. There was particularly bad news in the firm’s mobility division, where operating income dropped to $267m from $934m in Q108. Net revenue at the unit dropped from $3.5bn last year to $2.9bn in the first quarter of 2009 and the company said that revenue from its Atom microprocessors and chipsets was $219m, down 27 per cent sequentially.

Over the fence from Intel’s WiMAX community is Camp LTE and this week Nordic carriers Tele2 and Telenor revealed that they are joining forces to build an LTE network in Sweden. The partnership will see the establishment of a joint venture company for network construction and sharing of spectrum.

Infrastructure roll out will start later this year with the companies intent on launching mobile internet services towards the end of 2010. By 2013, the two operators expect 99 per cent of the Swedish population to have access to mobile internet at speeds of up to 80Mbps in rural areas and up to 150 Mbps in urban areas.

The Informer could really do with a story about CAMEL here, or something about a pyramid scheme, because he desperately needs a link to help him get to Egypt, where the tug of war over local carrier Mobinil gained intensity this week after regional (and Egypt-headquartered) carrier Orascom failed to transfer its holding in the company to purchaser France Telecom.

Orascom argued that it was unable to transfer the shares, as ordered by the International Court of Arbitration of the International Chamber of Commerce, because France Telecom filed to pay the agreed purchase price for the stake.

The Egyptian carrier is also trying to force France Telecom to extend an offer to buy out the minority shareholders in Mobinil, although France Telecom’s attempt make this move was scuppered by the Egyptian Capital Market Authority (CMA) last week, which sided with Orascom and said the offer was not good enough.

On the other side, France Telecom has hit out at Orascom, claiming that the Egyptian firm is engaging in a media campaign to swing opinion over the dispute. The French company also says that Orascom is risking a $50,000 a day penalty (beginning April 10th) for failing to complete the share transfer.

Why can’t they just play nicely?

Take care,

The Informer

Ownership dispute over Mobinil escalates

The struggle for control of Egyptian mobile carrier Mobinil became more heated over the weekend after Orascom failed to transfer its holding in the company to France Telecom.

Orascom argues that it was unable to transfer the shares, as ordered by the International Court of Arbitration of the International Chamber of Commerce, because France Telecom filed to pay the agreed purchase price for the stake.

The Egyptian carrier is also trying to force France Telecom to extend an offer to buy out the minority shareholders in Mobinil’s parent company ECMS, although France Telecom’s attempt to carry out this move was scuppered by the Egyptian Capital Market Authority (CMA) last week, which sided with Orascom and said the offer was not good enough.

Orascom said Monday it has extended it offer until Wednesday, April 15.

On the other side, France Telecom has hit out at Orascom, claiming that the Egyptian firm is engaging in a media campaign to swing opinion over the dispute. The French company also says that Orascom is risking a $50,000 a day penalty since April 10 for failing to complete the share transfer.

“Once Orascom Telecom has complied with the arbitration award, France Telecom is looking to re-establish discussions with the Egyptian authorities in order to make a fair offer to minority and individual shareholders of ECMS,” France Telecom said.

Back in 2007, Orascom initiated a lawsuit against France Telecom seeking to force the French carrier to transfer its Mobinil shares over to Orascom.

However the court ruled in France Telecom’s favour and required Orascom to transfer its entire stake in Mobinil to France Telecom.

France Telecom holds 71.25 per cent of Mobinil, a holding company owning 51 per cent of ECMS, which is the mobile operator that offers services under the Mobinil brand. However, the 20 per cent interest that Orascom holds directly in ECMS, as well as the free float of ECMS, do not fall within the scope of the ruling, but is now the subject of the disputed buyout offer.

France Telecom takes over Mobinil

France Telecom has taken full control of Egyptian mobile carrier Mobinil, after settling a lengthy legal dispute with local operator Orascom Telecom and shelling out Eur530m for Orascom’s holding in Mobinil.

Back in 2007, Orascom initiated a lawsuit against France Telecom seeking to force the French carrier to transfer its Mobinil shares over to Orascom.

However the court ruled in France Telecom’s favour and required Orascom to transfer its entire stake in Mobinil to France Telecom.

France Telecom holds 71.25 per cent of Mobinil, a holding company owning 51 per cent of ECMS, which is the mobile operator that offers services under the Mobinil brand. However, the 20 per cent interest that Orascom holds directly in ECMS, as well as the free float of ECMS, do not fall within the scope of the ruling.

But as a result of the ruling, France Telecom will be able to consolidate the entire financial results of ECMS, representing additional annual revenues of over Eur360m.

As of the end of 2008, Mobinil had 20.1 million subscribers and around 43 per cent market share, making it the market leader ahead of Vodafone Egypt and Etisalat.

The number of prepaid mobile subscriptions in the Middle East crossed the 100 million mark in the second quarter, reaching 101.7 million at the end of June.

Prepaid services continued to dominate in both the Middle East and Africa, with a combined 321.55 million subscriptions at the end of June, accounting for 84.46 per cent of the total regional mobile market.

But the dominance of prepaid was more pronounced in Africa than the Middle East. The 219.86 million prepaid subscriptions in Africa at the end of June represented 94.55 per cent of all subscriptions on the continent, and in the Middle East, prepaid accounted for 68.39 per cent. The popularity of prepaid subscriptions is highlighted by Egypt’s third operator, Etisalat Misr, which launched in the second quarter, where 96.97 per cent of its 960,000 subscriptions by the end of June were prepaid. This is an even higher proportion than that of its rivals, Mobinil and Vodafone Egypt, which had 10.83 million prepaid subscriptions, or 93.94 per cent of its customer base, and 9.56 million, or 94.03 per cent of customers on prepaid tariffs respectively.

In Iran, the wholly prepaid Taliya network had 1.03 million subscriptions at the end of June, up from 125,000 at the end of the same quarter last year. Irancell had 781,900 prepaid subscriptions at the end of June, accounting for 46.39 per cent of its subscription base. Iranian incumbent MCI had 200,000 prepaid subscriptions at the end of June, accounting for just 1.12 per cent of its subscription base.