[2008-01-21]  Saudi to Buy Oger Telecom Stake for $2.56Billion
(Saudi Telecom Co., the Arab world's largest phone company, agreed to buy 35 percent of Oger Telecom for 9.6 billion riyals ($2.56 billion) to gain access to markets including Turkey and South Africa amid growing competition at home.

Saudi Telecom will complete the acquisition by the end of the first quarter, the Riyadh-based company said in a filing to the Saudi stock exchange. Oger Telecom, controlled by Lebanon's Hariri family, provides fixed, mobile and Internet services in Turkey, South Africa and Lebanon.

``This acquisition offsets home competition and gives the company a wider footprint,'' Diala Hoteit, telecom analyst at National Bank of Kuwait, said in a telephone interview.

The purchase is at least the third that Saudi Telecom has made in the past year as it prepares for a third mobile-phone provider to begin service in Saudi Arabia, the Arab world's largest economy. In 2007, it won a mobile-phone license in Kuwait for $908 million, and paid $3 billion for a 25 percent stake in Malaysia's Maxis Communications Bhd.

The Maxis stake gives Saudi Telecom access to 1.4 billion people in Asia and enables it to provide roaming services to at least 1.5 million Indians working in Saudi Arabia.

``This transaction marks another important milestone in STC's development and will help us achieve our ambition to become the undisputed leader in the region,'' Chairman Mohamad al-Jaser said in a statement received via email today.

Higher Profit

Saudi Telecom also said profit rose for the first time in six quarters. Fourth-quarter net income rose 9.3 percent to 3.05 billion riyals ($813.4 million) from 2.79 billion riyals in the year-earlier period, the company said in a filing to the Saudi stock exchange today. The company didn't disclose earnings per share.

Full-year profit fell to 12 billion riyals, or 6.01 riyals a share, from 12.8 billion riyals, or 6.4 riyals, the filing shows.

Vivendi SA, whose SFR unit is France's second-biggest mobile-phone company, ended talks in November to buy a stake in Oger Telecom, which is based in Dubai in the United Arab Emirates.


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