Securities & Investment Company (SICO) has released an extensive report initiating coverage on Mobile Telecommunications Company (MTC). Kuwait’s MTC is a high growth player in the regional telecom sector with aspirations to become a global competitor. The company currently has over 25 million customers spread over 20 countries (most with low telecom penetration).
The Middle Eastern and African region is seeing a phenomenal growth in telecommunication services, driven by the continued increase in disposable income, rising penetration levels and deregulation of the telecom sector.
The 38-page report aims to provide investors with a better understanding of the company, its history, business strategy, valuation and investment case.
The report, which has been distributed by SICO’s Research department to key clients, includes industry analysis of the region’s telecommunications sector as well as competitive comparisons.
SICO restates in the report that the telecommunication services sector in the GCC and wider MENA markets continues to witness unprecedented growth rates as a result of liberalization and increased competition. With increased acquisitions spreading across the Middle East and Africa, MTC has become an international player in the mobile telecommunications field. The acquisition of Celtel, with its African operations, in April 2005 followed by acquisitions of Mobitel (Sudan) and V-Mobile (Nigeria) helped the company gain a strategic inroad in the African mobile market. The region promises to be one of the most lucrative telecom markets in the world.
SICO believes that MTC is well poised to aggressively bid for further licenses and privatizations both within the region and globally. The company is expected to post strong growth in the years ahead with revenues and net incomes forecasted to grow at a compounded rate of 50% and 35% respectively between 2005 to 2008. The company trades at a Price to Earnings ratio of 9.7 times its forecasted earnings in 2007 (a steep discount to regional telecommunications companies) and is thus significantly undervalued.
Securities & Investment Company is a securities house offering a selective range of investment banking services, including asset management, brokerage, corporate finance and market-making on a regional basis and with a particular emphasis on Bahrain. SICO was incorporated in Bahrain in 1995 and holds an investment-banking license from the Central Bank of Bahrain.
