UAE’s e& looks to expand in telecoms and other areas, including via M&A

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DUBAI — E&, the UAE telecoms group formerly called Etisalat, is looking to expand into new markets in Africa, Europe and Asia and in areas outside telecoms such as financial technology as its seeks to drive growth, its CEO told Reuters.

The company is exploring a range of possibilities, including potential joint ventures, acquisitions and listings of subsidiaries, though it would want to retain control of all its units, Group CEO Hatem Dowidar said in an interview.

“While telco is a good business, and we’re still focusing on telco – as for us it is the money-generating cash cow – the long-term growth needs to be through expansion,” Dowidar said.

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“In the telco space, we are looking at geographic expansion,” he said, exploring markets in Africa, Europe and Asia with room for growth, political stability and strong regulations. He did not name any specific target markets.

The group has separated its business into consumer services-focused e& life, e& enterprise to provide digital services to government and business, and telecoms arm Etisalat, which Dowidar said is the world’s seventh largest by market capitalisation.

It has also set up e& capital to drive acquisitions and mergers.

Dowidar said a breakdown of how much each unit contributes would be shared with investors “in a few months.” Total revenue growth at e& was 3% in 2021, while e& enterprise grew by 17%, he said, adding he expected growth to accelerate.

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“We are preparing a few more announcements soon in Egypt,” as well as Pakistan, he said. The announcement in Egypt will be related to the fintech sector, he added.

The firm is open to potential deals with other large telecoms providers, he said. He did not expect any to enter the UAE, where the government holds controlling stakes in the two telecoms providers, due to high penetration and already high-quality internet speeds and service.

“Given e&’s ambitions highlighted in the new operating model, we may consider raising debt if a suitable inorganic opportunity materializes,” a representative said.

Whether popular internet-calling applications like WhatsApp – which have long been blocked in the UAE – will be allowed is up to regulators, he added. WhatsApp and others were allowed at Dubai’s Expo world fair.

“We are ready for whatever is in the market … at the end of the day, these applications, they all use data. It might decrease our voice usage, but it will increase our data usage,” Dowidar said. (Reporting by Yousef Saba Editing by Mark Potter)