Friendi eyes IPO Saudi licence

Friendi eyes IPO Saudi licence

Dubai group Friendi plans an initial public offering within two years, the mobile virtual network operator's chief executive told Reuters on Monday.

December 6, 2011 10:17 by Reuters

Friendi has MVNO licences in Jordan and Oman, plus a partnership deal to provide branding and advisory services to Saudi Arabia number three telecoms operator Zain Saudi , while it is eyeing four to five licences in the Middle East and North Africa, including Saudi Arabia.

MVNOs target niche segments, such as ethnic groups, leasing excess capacity from conventional telecoms operators and typically paying them a percentage of their revenue.

“We are planning to launch an IPO in 18 to 24 months,” said Mikkel Vinter, chief executive and founder of Friendi Group, declining to reveal what bourses it might list on. “How the markets are performing is one of the considerations for us; at the moment it’s not the best time, but we’re optimistic about the medium to long-term outlook for the region.”

Vinter said Friendi’s exact ownership structure was confidential, with local partners owning 20 to 40 percent of its operations in Oman and Jordan, while investors in the parent firm Friendi Group include National Technology Enterprises Co, which is owned by Kuwait’s sovereign wealth fund, and Millennium Private Equity, which is owned by Dubai Islamic Bank.

Oman’s Dolphin International is a minority shareholder in Friendi’s Oman subsidiary and also the parent company.

“We never enter a market without local partners,” said Vinter. “Every market is different, and it’s important to have partners that have a deep understanding of the market and maybe some assets that can help the operation.”

GULF OPPORTUNITIES
In the Gulf, only Oman has granted MVNO licences, with regulators wary of opening up the state-dominated sector — 10 of the 15 Gulf telecoms licences are ultimately government-controlled.

Yet stagnating subscriber growth will spur liberalisation, said Vinter.

“Once a country has two or three national mobile operators, it doesn’t make sense to award another mobile licence that duplicates another X billion dollars of investment,” he said.

Saudi Arabia’s technology minister was quoted in the Saudi Arabia media in November as saying the kingdom was planning to issue three MVNO licences in 2012.

When asked if Friendi would bid for a Saudi licence, Vinter said: “We are keen to look at that.”

“MVNO licences will probably be granted next year, but we are not aware of the final terms being determined,” said Vinter. “The next wave of competition will be more about services than infrastructure.”

Vinter declined to reveal which other markets were potential Friendi targets.

“We are working with four to five countries where we are in advanced negotiations, and in a few cases even early-stage implementation has started,” he said.

Friendi has more than 300,000 subscribers in Oman, split between its two brands, Friendi Mobile and Halafoni, to claim 65 percent of Oman’s MVNO subscribers. These use former monopoly Oman Telecommunications’ (Omantel) network.

Vinter declined to give subscriber numbers for its other operations.

“On a group level, we expect to reach 1 million early next year,” he added. (Reporting by Matt Smith; Editing by Will Waterman)