Interview with Orascom Chairman Naguib Sawaris

Q. Where is Orascom headed?

A. In the Middle East, the last available licenses are in Saudi Arabia and Oman. Oman doesn't fall into our strategy because it's a small market; we're now concentrating on markets with big populations.

The fact is that the Middle East is now done. There is only the Saudi Arabian license, then there are no more. Therefore, our thinking now is that we will move forward.

We will look at Asia. We'll look at some markets in Asia, further markets in the Russian republics, Muslim countries and mainly where the cooperation is high and there is still a chance to go out there and get 2-3 million subscribers in a country. If this is not available, we will not go.

Q. Isn't there a risk of repeating the mistakes of the past?

A. No, because all our big markets are mature and they are pumping cash. Actually, the question is not that. The question is: 'Next year, do we keep the cash?' We either expand and get more growth, or we give it back as a dividend. There is no risk anymore.

Q. What markets are you looking at now?

A. We are going to Asia, more Muslim countries, the Russian republics: Kazakhstan, for example, and Ukraine.

Q. What about acquisitions within the region?

A. We would be interested in bidding for a mobile license, but would not be interested if it was coupled with a fixed line.

Q. There are a lot of players in the Arab world. Is consolidation likely?

A. There will be consolidation in the region. I understand that size is important. If we want to create a truly Arab operator, we'll have to come together and create that.

Currently, we have good relations with other regional operators, who do not necessarily have the same footprint and would be complementary to us. I mention a company like MTC of Kuwait, who have done really very well until now: they've moved into Bahrain, Jordan and are now managing the Lebanese license. We complement companies like that.

Q. What kind of relationship can exist between MTC and Orascom?

A. In the future, once we feel that the valuation is right, I think we'll sit down and see how we can cooperate. I have a good relationship with the management there.

Q. Are you then looking at any merger or acquisition possibilities?

A. It's too early to speak about that.

Q. Why do you think MTC and Wataniya are so active across the Middle East?

A. There is jealousy because they have the same local market so they want to compete. They're competing in their own country. It's good for the industry. When we went out of our country, everybody thought we were crazy. Now, everybody is following in our footsteps.

Q. Why Kuwait? Why haven't Etisalat and STC been able to do the same thing?

A. Because they are not totally governmental. There's a lot of private sector. When a company is 100 percent owned by the government, they move much more slowly.