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MTN extends strategic co-operation with BICS

By  Prince Osuagwu

Belgacom International Carrier Services (BICS) and MTN have announced a next step in their strategic co-operation by combining their international carrier services, resulting in MTN holding an equity stake in BICS.

In terms of this transaction, MTN will contribute into BICS the assets of MTN ICS, it’s international wholesale subsidiary, which generated revenues of €223.2 million for the year ending 31 Dec 2008.
In addition, MTN will mandate BICS to operate as the official international gateway for carrier services of MTN globally.

The completion of this transaction is expected to take place during the fourth quarter of 2009, subject to, inter_alia, the approval of the relevant government, regulatory and competition authorities and the completion of certain statutory formalities. It is envisaged that the MTN ICS operations will be progressively integrated. Post implementation of the transaction, Belgacom will own 57.6% of BICS, Swisscom 22.4% and MTN 20.0% with the right to appoint two directors to the board.

The combination of the international carrier services of BICS and MTN ICS is expected to improve efficiencies and product offerings resulting from greater economies of scale. In addition to the anticipated efficiencies, the transaction is expected to positively impact the future growth of the larger combined entity which will become the leading international wholesale operator in Africa.

Excited Sifiso Dabengwa, Group Chief Operating Officer of MTN said that “this transaction is a natural next step following our successful strategic co_operation with Belgacom ICS since 2005. By combining our international carrier services activities, we seek to further improve the quality of the international service offering of our operations in Africa and the Middle East, while realising meaningful cost benefits.”

Didier Bellens, CEO of the Belgacom Group commented: “This agreement perfectly meets the strategic objectives of Belgacom ICS: to participate in the international wholesale market consolidation while developing in parallel innovative wholesale solutions for mobile operators worldwide. Our strategy to participate in the ICS consolidation, was initiated in 2005 with the creation of Belgacom ICS as a joint venture with Swisscom, and pursued with the signature of various outsourcing agreements. We are proud to welcome MTN as a new shareholder of Belgacom ICS.”

Carsten Schloter, CEO of the Swisscom Group, commented: “We are confident that this transaction will generate significant value for the three shareholders.  Belgacom ICS has indeed successfully proven to-date its ability to integrate an acquired international carrier business and to sustain profitable growth.”
Daniel Kurgan, CEO of Belgacom ICS, commented: “Thanks to this cooperation, Belgacom ICS will reinforce its leadership in international wholesale telecommunications, both for voice services (now within the world top 5) and for international connectivity services to mobile operators (world leader). Becoming the carrier partner of African’s biggest mobile group will significantly strengthen our footprint and make Belgacom ICS the Number 1 international carrier in Africa.

This transaction will be of benefit to all existing and future customers”
Elie Bardawil, CEO of MTN ICS, commented: “MTN ICS, formerly known as Mediterranean Network, operated for more than 10 years as the international gateway for primarily the Investcom group of companies until its acquisition by MTN in 2006. Since then MTN ICS has contributed to the overall growth of MTN’s international traffic and related services. MTN ICS will bring to the combined entity its knowledge of the African and Middle Eastern markets and the skills and experience of its team.”


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