Bahrain's biggest telecommunications operator is weighing acquisitions in the region as growing competition and political unrest in the small island nation impacts the company's financials, says its chief executive. Bahrain Telecoms Company, known as Batelco, is also expected to conclude a US$950 million (Dh3.48 billion) acquisition of 25 per cent of Zain Saudi Arabia with Kingdom Holding.
Batelco is providing 15 per cent of the purchase funds.
Due diligence on the deal is expected to be completed by the end of the second quarter, said Peter Kaliaropoulos, the head of the state-owned Batelco.
"We're looking at buying existing companies rather than greenfield companies with no experience," Mr Kaliaropoulos said yesterday.
"The market here has gone soft," said Mr Kaliaropoulos, calling the Bahraini telecoms sector, which is home to three telecoms players, "too small".
Listed companies within the Middle East and North Africa region are among Batelco's target acquisitions, he said, without disclosing any names.
"Eight weeks from today we hope to have the definitive documents," Mr Kaliaropoulos said.
He added that the death of Nasser al Kharafi, the billionaire chairman, and a major shareholder in Zain, had not affected the transaction.
"We are still proceeding with due diligence. If the seller changes his mind, that has nothing to do with Batelco and Kingdom," Mr Kaliaropoulos said.
Losses at its Indian joint venture, S Tel, and growing competition in the Bahraini market have prompted the phone company to look further afield.
On Wednesday the company said first-quarter profit fell 28 per cent compared with the same period last year as losses in S Tel cut into margins.
It is not expected to break-even for another four years, Mr Kaliaropoulos said, although he added if "someone was offering the right return" he would consider selling the unit.
"I never get emotionally attached to an investment but right now it's not something we're thinking of doing," he said.