Investcom’s subscribers up 86%

31 Aug 2006

Lebanese-based mobile group Investcom, which South Africa’s MTN Group acquired in July for USD5.5 billion, has reported an 86% year-on-year rise in total subscribers to 6.14 million at the end of June 2006. Investcom operates GSM networks in Ghana, Syria, Yemen, Sudan, Cyprus, Benin, Guinea, Guinea-Bissau, Liberia and Afghanistan, offering services under the Areeba brand name. It said that subscriber growth was driven principally by the recently launched Sudan unit as well as operations in Syria. Its subscriber base in Ghana exceeded two million while the new operation in Guinea grew faster than anticipated with 115,000 subscribers at the end of June. Areeba Afghanistan launched commercial operations last month and has reported that it signed up almost 60,000 users in its first six weeks.

Investcom’s 1H revenue was up 52% year-on-year to USD600 million, while net profit was up 30% at USD131 million. In addition to the overall increase in subscribers, financial performance was boosted by the consolidation of its Yemen division, previously accounted for as an associate company, as well as network expansion in Sudan, and to a lesser extent the recent launch of services in Guinea. Investcom’s international carrier service Mednet increased its revenues by over 60% in the period under review due to a revised tariff structure and increased traffic volumes.

Key priorities for MTN in the short term include the integration of Investcom and the realisation of synergies as a result of the transaction. In the medium term, priorities are the implementation of longer-term synergies as well as the repayment of debt used to fund the acquisition. MTN made a cash and shares offer in May to acquire the entire issued share capital of Investcom for USD5.5 billion. Its shareholders approved the transaction in June and it became wholly unconditional on 4 July. Investcom will be consolidated from this date onwards, MTN said.

Lebanon, South Africa, MTN Group