Thursday, May 24, 2012
(This story was originally published Wednesday.)
--Friendi eyes initial public offering within the next couple of years
--Talking to banks regarding IPO but no firm decision reached
--Eyes MVNO licenses in Egypt, Saudi Arabia and Lebanon
By Shereen El Gazzar
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Dubai-based Friendi Group is working towards an initial public offering within the next couple of years, while the telecoms services company also aims to set up operations in Saudi Arabia, Egypt and Lebanon as a mobile virtual telecom operator, or MVNO, the company's chief executive said.
"An IPO [initial public offering] is something that we are looking at and definitely find interesting, but it's still in the future," Mikkel Vinter, the founder and chief executive officer of Friendi, told Zawya Dow Jones in an interview on Wednesday. "There are a number of banks that we are talking to, but we haven't concluded anything."
Vinter said a public listing is a natural step for the company and would help improve liquidity for investments and provide it with welcome access to capital markets.
"After certain companies reach a certain level of maturity it (IPO) is a natural step," he added, without giving a specific date for an IPO, or where it would likely be listed.
In the meantime, Friendi will continue to focus on expanding in the region through MVNOs, a process where a company rents capacity on an incumbent operator's network. Several telcos in the region are looking at acquiring such licenses to expand in foreign markets without incurring huge capital expenditure bills.
Friendi's Vinter said the company is considering launching MVNOs in Saudi Arabia, Egypt and Lebanon, as the region is warming to the idea in what Vinter calls "the second wave of MVNOs". Friendi already operates in Oman and Jordan as an MVNO.
"These [Saudi, Egypt, and Lebanon] are the ones that we are immediately looking at. There are also a number of research and discussions ongoing with a number of the other regulators. It is definitely a wave that is catching up now. We are getting close to one million customers now across the region," said Vinter.
Saudi Arabia, the Middle East's biggest economy, is expected to issue three MVNO licenses this year, while the Egyptian Ministry of Communications and Information Technology is expected to issue a tender for the country's first MVNO in about three months time.
In a recent report, analysts at HSBC said that the introduction of MVNOs in Saudi Arabia will exert pressure on the revenues and margins of existing telcos as voice still constitutes more than 75% of the revenues for all the Saudi operators.
Friendi's Vinter said Wednesday that there's room for both traditional mobile operators and MVNOs to co-exist peacefully.
"We are leaving the one size fits all era and moving into an era where the focus in on customer segmentation. There are lots of examples particularly from Europe and North America, where there are some very productive partnerships between MVNOs and operators where it's complimentary rather than competing," he said.
"What we see is that the operator is perhaps a state-owned incumbent company, very solid, but some youth customers may perceive it as old fashioned. That is a perfect opportunity for the operator to partner with an MVNO that has a more beautiful brand and a fresh approach to the market," said Vinter.
-By Shereen El Gazzar, Dow Jones Newswires; +971 444 61684; Shereen.elgazzar@dowjones.com; Twitter: @ZDJnews
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
24-05-12 0352GMT
