Egypt telecom major gets foothold in India

Orascom picks 19% stake in Hutch; both firms to sign roaming agreements.

A month after Vodafone stepped into India through a stake in Bharti, its arch rival Orascom Telecom has got a foothold in the country.

The Cairo-based telecom major Orascom Telecom has picked up a 19.3 per cent stake in the Hong Kong-based Hutchison Telecom, which holds a 42 per cent stake in Hutchison Essar.

Orascom Telecom Chief Executive Officer Naguib Swiris, who announced that his aim was to emulate Vodafone by building a mobile empire, said the acquisition would help it to enter India. "We have often expressed our keen interest to enter some of the largest and highest growth mobile markets in the world like India, Indonesia and Vietnam. The tieup with Hutchison Telecom presents Orascom Telecom with exposure to these markets," a joint statement issued by the two companies on Wednesday quoted him as saying.

In addition to sending two representatives to the Hutchison Telecom board, Orascom is expected to have members on the board of Hutchison Essar, Hutchison Telecom's joint venture in India with the Essar group. The Essar group holds 35 per cent stake in the company.

Without mentioning Hutchison Essar, the announcement of the comprehensive global strategic alignment between the two companies said Orascom will have representation at the operating subsidiary board level in Hutchison Telecom's most populous and fastest growing markets. India, the world's second largest telecom market, is sure to feature in the list, analysts said.

Analysts said the Orasom-Hutchison would be a formidable force in the emerging markets including India. On a combined basis, Orascom and Hutchison Telecom control mobile operators in 15 countries representing an area covering 2 billion people. They together serve 40 million mobile subscribers as on September 30, 2005.

As part of the agreement, the two groups will combine procurement and sign roaming agreements between all the operations which are complementary. For example, Hutchison has operations in India and Sri Lanka, while Orasocm has businesses in Pakistan and Bangladesh.

Analysts said the access to India is important for Orascom since other telephony markets across the globe are witnessing a saturation, with the exception being the markets in South East Asia, Eastern Europe and Russia.

"The Asian markets like India, Bangladesh, Pakistan, Indonesia and Sri Lanka are slated to be the growth market for global companies," they added

Orascom Telecom operates GSM networks in Algeria (under the brand name Djezzy), Pakistan (Mobilink), Egypt (MobiNil), Tunisia (Tunisiana), Iraq (IraQna), Bangladesh (Banglalink) and Zimbabwe (Telecel Zimbabwe).

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India Calling

Orascom CEO says the acquisition of stake in Hutch's Hong Kong parent will help it to enter India

The Cairo-based telecom major is expected to have members on the board of Hutchison Essar

Hutchison has operations in India and Sri Lanka, while Orasocm has businesses in Pakistan and Bangladesh