Sun 4 Mar 2007
So today we all awoke on confirmation on the deal of the year, where Qtel bought 51% of Wataniya Telecom! They bought out KIPCO’s share in the company in a deal worth 1.1 billion KD.
Qtel is Qatar’s only telecom company. It was listed in 1998, and it provides local and international fixed telephone, mobile, Internet, data and cable television services….with no competition in Qatar! They also started a new telecom company in Oman called Nawras 2 years go, and have been growing since by acquiring companies in places like Singapore and Indonesia (and Kuwait now!)
Wataniya, on the other hand, has been in the market since 1999, and has been associated with the KIPCO group since they started it. Wataniya has a network in Tunisia, Algeria, Iraq, the Maldives, and recently bought into a company that works in Saudi Arabia.
The deal is one of the biggest in the region’s history and could be the beginning of many more mergers and acquisitions n the all different sectors in the region.
I have criticized Wataniya more than once, mostly for their branding and marketing efforts. Their products seem to be excellent (I use W-net and it really is excellent!), but they definitely need to work on everything around the product! I had two surveys on the blog a year apart, the first was on August 2005 where I asked what you think “the best corporate brand in Kuwait” is, and Wataniya came in 5th place with 3%. The second was in October 2006 where the question was “Which company do you feel most proud of as a Kuwaiti?” , and Wataniya came in last place with 2 votes out of 129!!
This takeover, even thought done by a Qatari company, could help Wataniya’s branding if the new management actually cared about creating a true strong brand! I actually have high hopes!
Oh….and another example of Wataniya’s really bad marketing and PR is found on their website. The takeover happened at least 2 days ago, and the preparations must have been done months or at least weeks ago, yet they do not mention anything about being bought out! Qtel’s website on the other hand has it on the main page.
We’ll probably hear about the new management soon, and maybe some new plans?? We can hope!
17 Responses to “Qtel buys out Wataniya Telecom”
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March 4th, 2007 at 10:05 am
I wouldn’t hold my hopes up too high for better branding with Q-Tel. I mean look at THEIR logo!!
March 4th, 2007 at 11:24 am
Could you elaborate more on what such a huge give-up by Hamad’s group mean?
March 4th, 2007 at 11:50 am
slight typo there,…
it was bought for KD490 million, so around US$1.7 billion.
March 4th, 2007 at 11:54 am
Zaydoun, I know their logo is incredible, and the other major disadvantage is that they have not been in direct competition with someone really big like MTC before, so it will be an interesting challenge for them. On the positive part, Im sure they will be willing to spend alot more on whatever it takes to make the company work better (the Qatari way).
Jandeef, I honestly dont have a good answer. Im sure the price is right, I think if you average it out, they end up with an average price of 4.700 KD per share, which is way above the 2.900 KD it is at right now. The price probably got there because of the other bid reports which pushed the price up! Anyone would sell for the right price! Especially if someone offered nearly twice the price, and there is a third telecom company coming up so it might be an option for them? Politically, I dont see anything in it, its all about pricing, and if there is any political indications, im better off leaving it for you guys at SS.
March 4th, 2007 at 12:01 pm
Jandeef is right, you didn’t elaborate on the significance of the merger, and focused only on branding.
March 4th, 2007 at 12:06 pm
skunk, it was bought for 1.1 KD billion, but KIPCO’s profit from the deal was 490 mil.
This is the news from the KSE -
. مشاريع الكويت تتوقع تحقيق 490مليون د.ك من بيع حصتها في الوطنية للاتصالات
يعلن سوق الكويت للاوراق المالية، ان شركة مشاريع الكويت القابضة بصدد بيع
حصتها في الشركة الوطنية للاتصالات، اي عدد اسهم 135,888,884 سهم
وعدد 32,937,500 سهم لشركة تابعة بقيمة 4,600 د.ك للسهم الواحد ، أي
بقيمة اجمالية 776,601,366 د.ك .
وتتوقع الشركة تحقيق ربحا وقدره 490,135,978 د.ك من تلك العملية .
سيكون من حق المشتري طبقا لبنود العقد حجز مبلغ وقدره 89,332,135 د.ك
من قيمة الاسهم المملوكة لشركتنا موضوع هذه الاتفاقية وذلك لحين تحقق شروط
معينة وارد ذكرها في عقد الاتفاق المشار إلية، وبذلك سايتم استبعاد هذا المبلغ
من صافي الربح المذكور أعلاه
The rest of the profits were distributed to the other companies.
March 4th, 2007 at 1:37 pm
the qutari way is throwing money on a problem until its totally covered up
anyway i’m hearing / reading a lot of anylist about why it was sold , but all agree its better for Kipco than Qtel
March 4th, 2007 at 2:58 pm
Q,
Forget about QTel.
what do you think about the Government submitting its resignation?????????
March 4th, 2007 at 3:30 pm
What I’d be interested in knowing is why did Etisalat refuse to bid for the Kipcos share? I know the Etisalat peeps are very astute, professional and fiscally responsible so I’m curious…did they see something here that would have amounted to a corporate stumbling block?
Qtel is an up and comer, I would have much prefered Etisalat to buy that stake. you guys would have seen improvements within a year.
March 4th, 2007 at 5:21 pm
نبارك للشيخ حمد
شركة الأتصالات الثالثة بالكويت
March 4th, 2007 at 8:02 pm
Well I don’t know much about Qtel. I know however they are doing pretty well in Qatar. As for the brand name, maybe the marketing campaigns are not so professional, but Wataniya won 1st place in best Arab brand. The W now is their brand. W-Net, W-Connect, WTV… etc.
Unlike MTC, who are usually brilliant in their ads, but they are not using a brand name. e-Go for example doesn’t reflect the company name at all.
It will be interesting to see how things turn up now. It’s not only new managemnt, but Wataniya have came out of whole KIPCO group. A group of around 64 companies in Kuwait, including Burgan Bank and other big names.
March 4th, 2007 at 10:17 pm
interesting Q,
when Wataniya start in 99, it was a big challenge to MTC as a big competitor at that time, and by time MTC worked well n turned up by the marketing campaigns n became one of bigest n largest companies. while Qtel bought 51% of Wataniya Telecom, makes Qtel one of MTC challenge coz of many things like (their past performance, risk, and as a foreign company) rather than 3rd. tele company.
KIPCO’s strategy focused in short-term by having profit around 490 mil., while they can work better in their ads n marketing campaigns to reach costumer needs. That makes Qtel willing to have a chance to do pretty well as Qatar.
So i wish all the best to all n waiting 4 diversity in telecom sector.
March 5th, 2007 at 8:47 pm
Q, it wasn’t only KIPCO shares that were sold in the deal. The 51% was a consortium that was lead by KIPCO (ownes approx. 24%) + other major shareholders (undisclosed - all theough ‘ma7afith’ in KAMCO) who together formed 51%.
March 6th, 2007 at 5:21 am
lets wait and see if the KIPCO group would enter the third telecom company! them doing so would explain their sale of NMTC, although the profit they made from the sale is good enough reason on its own..
March 6th, 2007 at 11:11 am
عرض خاص
كل خطين تيس مجانا
March 6th, 2007 at 11:41 am
Why assume that KIPCO will enter the bid for the third telecom license? It may actually be that they saw that a third company is coming sooner or later and they wanted to cash out now before they feel the strain of added competition in a largely penetrated market and prices are squeezed.
March 17th, 2007 at 11:48 am
[…] In the past two weeks or so, three major deals have happened to Kuwaiti companies that need to be looked at in that perspective! The most famous and biggest one is the one I already talked about, Qtel’s takeover of Wataniya. […]