First it was Warid Telecom's impressive roll out of telecom services in Pakistan, then within a month, came along Etisalat and took over the national telecom carrier (PTCL). UAE's monopoly telecom service provider has taken several steps during the past 1 year to become a regional telecom giant. This could be a proactive reaction; firstly, to counter any potential competitors entering its domestic territory, secondly because the customer base in UAE is limited. Pakistan offers a potential customer base of more than 150 million compared to UAE, where Etisalat has over 4 million GSM subscribers and 1.2 million fixed lines. UAE's cellular lines surpassed fixed lines as far back as the year 2000. This move by UAE's giant corresponds to the recent 'investor friendly' atmosphere created in Pakistan, where various conglomerates from the Gulf are entering energy, transport, hospitality, and real estate sector, besides communications. Few of the high dollar investments include Al Habtoor group's $1.87 billion Pakistan venture and Dubai's Al Ghurair Giga Group's $0.54 billion investment in Islamabad.

Etisalat & PTCL
Founded on 30th August 1976, the Emirates Telecommunications Corporation - Etisalat is 60 per cent owned by the government and its revenue has risen to $2.84 billion by the end of 2004, from $1.6 billion in 2000. Etisalat's network of Satellite, Earth and Coastal stations; landlines covering the length and breadth of the UAE; submarine cable systems, cable ships, optic fiber cables and international projects are all utilized to service the communication needs of its local and international customers. On the other hand, PTCL is one of the largest corporate entities in Pakistan and accounts for about 15 percent of the weighted-average index of 100 shares at the Karachi Stock Exchange. PTCL has 5.05 million fixed phone clients. The phone company earned $483.33 million in profits for the year ended June 2004.

Shopping spree!
Etisalat has taken the telecom market by storm. It had recently acquired 50 percent shareholdings in Atlantique Telecom, a West African mobile operator. It has gained holdings in regional operators such as Etihad Etisalat in Saudi Arabia, Qatar Telecom (Qtel), Sudatel, Africa Zanzibar Telecom (Zantel), satellite-based telecoms service provider Thuraya, and e-Marine, an international cable link. Next on horizon is Turkey as Etisalat has been pre-qualified to bid. Etisalat became the highest bidder for a 26 per cent stake in Pakistan Telecommunication Corporation Limited (PTCL), with a $1.96 per share offer acquiring 1.326 billion shares and management control of PTCL, out-bidding China Mobile with a bid of $1.409 billion, and Singapore Telecommunications Ltd with a bid of $1.166 billion. The bid totaled $2.598 billion. PTCL's total assets include a combined customer-base of over 7.5 million, including fixed-line, cellular and wireless local loop (WLL) users.

Not only is Etisalat acquiring telcos but it is also upgrading its present gear. Emirates Telecommunication Corp's investment arm Etisalat International will get $1 billion (Dh3.67 billion) from Hong Kong-based Huawei Technologies Investment Co for its international operations. Huawei delivers solutions to deploy and operate mobile networks in more than 70 countries. Huawei would alert the Etisalat International to any opportunity in the region, in terms of new licenses, partnerships or other opportunities. They will then be able to jointly exploit any new business opportunities fully.

Muhammad Farooq is a BSc. (EE) from USA and is completing his MBA. He is MCSE, CCNA, NGDLC, ATM and NGN certified. He has worked in Telecommunications sector, and taught at various universities. Currently he is working as a Telecom/IT Consultant in UAE and running an online Telecom/IT newsletter (www.farooq.com.pk).
He can be reached at info@farooq.com.pk