Mobile Telecommunications Company K.S.C (MTC) Board recommended during its meeting today a 100% increase of capital at KD 1.250; (Par Value of 100 Fils and a premium over par of KD 1.150). Mr. Asa’ad Al-Banwan, Chairman of MTC Group said: “We are recommending an increase of the capital of MTC to confirm our commitment to our expansion strategy in the Middle East and Africa.” He went on to add: “This capital increase will enhance our ability to expand as well as assist us in refinancing the bridge loan that was secured for the recent Celtel acquisition.”
Al-Banwan commented further that MTC Group may need another US$ 2 billion in the 2nd half of 2005 to fund not only the upcoming Iraq mobile license but also other target markets considered in MTC’s expansion plans. Al-Banwan also stated: “MTC Group has proven itself during the past 3 years to be a leader in identifying and securing opportunities in markets across the region. MTC’s Board carefully evaluates these opportunities with a focus and emphasis on enhancing and increasing shareholder value.”
Dr. Saad Al-Barrak, MTC Deputy Chairman of the Board and Managing Director commented: “MTC’s recent performance is a result of the implementation of MTC’s 3X3X3 strategy emphasizing that the great success of this strategy can be seen today in the operating and financial performance of the MTC Group.” Dr. Al-Barrak added that MTC Group’s expansion program had a direct impact on the market value of MTC shares, pointing out that the market capitalization of MTC increased by US$ 4 billion in the last 4 months. Dr. Al-Barrak confirmed that MTC Group’s recent acquisition of Celtel last April elevated the expansion strategy to new heights and created excellent opportunities for MTC’s expansion on the African Continent. Africa today has the highest growth potential for mobile usage as the mobile penetration stands at less than 4% today. “Celtel contributed 23 Fils per share profits to MTC’s bottom line since we acquired it in April of 2005. Moreover Celtel adds 200,000 to 300,000 customers per month to MTC Group’s customer base and this impacts positively the overall growth level of MTC,” explained Al-Barrak.
As of June 30, 2005 MTC customers increased by 306% to exceed 10.607 million customers when compared to 2.611 million during the same time last year.
Al-Barrak ended by stating that MTC intends to accelerate its expansion in the African markets in the near future making use of the Celtel’s excellent reputation in those markets as well as its long experience serving the population of the African Continent.
About MTC
Mobile Telecommunications Company (MTC) was founded in 1983 and is today one of the largest mobile operators in the Middle East and Africa, offering a comprehensive range of world-class voice and data mobile services to over 10 million customers spread across 18 countries – Kuwait, Bahrain, Jordan, Iraq, Lebanon in the Middle East and 13 countries in sub-Saharan Africa- Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Kenya, Malawi, Niger, Sierra Leone, Sudan, Tanzania, Uganda and Zambia..
Listed on the Kuwait Stock Exchange, MTC’s market capitalization exceeded US$10 billion as at August 1, 2005. The shareholder base consists of 75.4% public and 24.6% by the Kuwaiti government. For the year ending December 31, 2004, consolidated revenues were KD 322.327 million (US$1.009 billion) and consolidated net income was KD 120.24 million (US$410 million).
MTC's corporate strategy can simply be summarized as "3x3x3", an ambitious, sustainable expansion strategy that will see MTC become a leading mobile and lifestyle services provider on the global stage by the end of the year 2011. Initiated in year 2002, it is this strategy that will make MTC a global player in three stages: regional, international and global, with each stage completed in three years, with an aim of reaching a subscriber base of 20 million. In essence, through acquisitions, partnerships and green-field opportunities, MTC aims to achieve in nine years what other companies have taken more than 27 years to achieve.
In addition to securing the best possible returns for shareholders cohesive with a high standard of corporate governance, MTC considers itself defined by a commitment to excellence in providing world-class mobile services and an ethos of corporate social responsibility in supporting communities, offering employment and creating business opportunities wherever it operates.
Facts on our operations (as of August 1, 2005):
Kuwait (branded as mtc-vodafone)
Notably distinct as the first mobile operator in the Middle East (1983), in September 2002, MTC entered into a Partner Network Agreement with Vodafone, the world's leading mobile community, creating mtc-vodafone Kuwait. The agreement allows MTC Kuwait customers to access their home services when roaming abroad on any of Vodafone’s networks and to access Vodafone’s global products and services. With a sound track record in providing world-class services, the operation has over 1.38 million subscribers, representing over a 60% market share.
Jordan (Fastlink)
In January 2003, MTC acquired 91.6% of Fastlink in Jordan, taking MTC’s ownership to 96.5%. Fastlink is one of the best known brands in Jordan, holding a dominant market position with a 71% market share. It has continually broken new ground through the introduction of new products and services. It was the first Middle Eastern operator to launch MMS Services and offers an abundance of mobile data services and infotainment solutions to over 1.43 million customers.
Bahrain (mtc-vodafone)
MTC won the Bahrain license to develop the second GSM network in April 2003 and officially launched its services in December 2003, at the time, the fastest deployment in the Middle East. Known as mtc-vodafone, the operation is at the forefront of technological development in the Middle East. It pioneered the introduction of 3G and EDGE, offering high-speed data and multimedia services to its customers. In less than 2 years of operation, it had gained over 165,000 subscribers representing a 20% market share.
Iraq (mtc atheer)
In December 2003, mtc atheer was licensed to install and operate a GSM network in the southern region of Iraq. In less than a year, the company succeeded in executing its initial objectives despite the security situation in Southern Iraq and has recently connected Baghdad. mtc atheer offers the highest standard of services and the most technologically advanced products to approximately 600,000 subscribers in Iraq. It has the widest reaching mobile telecommunications network in the country (2200km), and by September 2005, this will be expanded to offer a full GPRS network with a plethora of new services capable of supporting 1 million subscribers.
Lebanon (mtc touch)
On June 1, 2004, the Lebanese government handed over the management of one of the two mobile networks (MIC 2) to MTC, now known as mtc touch. The 4-year management contract will see mtc touch leveraging resources, expertise and know-how from different areas of the group and applying them to provide customers with cutting edge products and services. On taking over, the initial effort and focus was to re-brand the operation and upgrade the network through a new Intelligent Network (IN) that provides customers with a host of new services. The operation has in excess of 479,000 subscribers, representing a 50% market share. The agreement places MTC in the best possible position if the Lebanese government decides to privatize the assets after the management contract expires.
Africa (13 countries) (Celtel)
In May 2005, MTC acquired Celtel International, an African communications network company with major interests in 13 sub-Saharan African countries, in one of the biggest telecom deals in the Middle East and Africa worth USD 3.36 billion. With over 6 million subscribers, Celtel enjoys a commanding position in the telephony market of sub-Saharan Africa. Celtel covers 13 countries – Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Kenya, Malawi, Niger, Sierra Leone, Sudan, Tanzania, Uganda and Zambia. The company’s motto is “Making life better”.
