Tuesday, Oct 11, 2011
--STC executive sees good lending environment
--Eyes acquisitions in Gulf, wider Mena region; sees no specific targets
--To focus on growth in Indonesia
By Shereen El Gazzar
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Saudi Telecom Co. (7010.SA), or STC, is well placed to secure funding for possible acquisitions but doesn't see any specific opportunities in the market at the moment, a senior company executive said.
"Lending has never been better. Interest rates are good for borrowing. Availability of cash is there. In crisis, people are looking to lend companies in a strong position. The question is about prices and opportunities," Ghassan Hasbani, STC chief executive officer for international operations, told Zawya Dow Jones in an interview in Dubai on Monday.
"We are limited by our detailed approach and our strict strategy that we are adhering to. We are not going to rush to an opportunity unless we find potential value and synergies that we can create," Hasbani said.
Riyadh bourse-listed STC is looking for either greenfield opportunities or an existing operator in the Gulf, Levant or the wider Middle East-North Africa region as the telco targets a share of 50% of its revenues from international operations over the next three years, he added. Currently, international operations represent about 33% of STC's annual revenues.
Saudi Arabia's largest telco is increasingly looking beyond the kingdom for earnings growth. It has targeted regions such as Africa and Asia as competition in its domestic market from the likes of Etihad Etisalat (7020.SA), or Mobily, and Zain Saudi (7030.SA) heats up. According to STC's website, it now has a presence in Kuwait, India, Indonesia, Malaysia, Turkey and South Africa.
Hasbani said he sees the majority of its international revenues coming from countries such as Malaysia and Turkey, which have young and growing populations. STC will focus also on growth in Indonesia, he added.
"Ultimately, the big stable operators generate steady income and steady revenue like in Malaysia and Turkey," Hasbani said. He declined to say how much each of the units contributes to STC's revenues at present.
"We are focusing on growth in Indonesia's Axis and that has taken a lot of our focus. Our target is to make sure this company continues to grow revenue. We have 15 million subscribers. We continue to grow our revenue by double digits. Since March 2010, we almost tripled our revenues," Hasbani said.
"We are in the beginning of our inflection point of our growth in Indonesia. Indonesia has the second-largest Facebook community in the world. We are focusing on using these young users who are internet savvy," he said.
STC shares closed up 2.87% at SAR35.90 Monday in a broadly positive Saudi market.
-By Shereen El Gazzar, Dow Jones Newswires, +9714 446 1684 Shereen.elgazzar@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
11-10-11 0429GMT
