mmC Group

Orascom ready for Canada price war

November 22, 2008

Naguib Sawiris blames Canadian regulators for lack of foreign mobile competitors.

Egypt&com;s Orascom Telecom Holding, or OTH, said Thursday it was ready for a price war in Canada after agreeing to launch a new mobile operator in the country.

"We don&com;t want to invoke a price war, but will if its necessary," Orascom Telecom&com;s Chairman Naguib Sawiris said, speaking at the Morgan Stanley TMT Conference.

In July, OTH won the auction for a cellular license along with Canada&com;s Globalive Communications Corp., the parent company of Yak Communications.

OTH will have a non-controlling interest in the operator, in compliance with Canadian ownership and control regulations.

"Our cost structure is incomparable to the other operators in Canada," Sawiris said."You can&com;t design a distribution worse then theirs... and ours is going surprise the market," he added.

Sawiris added the lack of foreign competitors in Canada was due to the complicated regulatory framework.

"If we can make money in markets where average revenue per user numbers are around $4, how can we go wrong where they are above $40?" he said.

OTH will take on Canadian mobile incumbent rivals Rogers Communications Inc., Telus and BCE Inc. in a market where mobile penetration levels hover around 60% and customers pay higher tariffs than in most countries for cellular services.

Company Web site: www.otelecom.com