Bahrain Telecom plans $4 bln of acquisitions

By Mohammed Abbas

MANAMA (Reuters) - Bahrain Telecommunications Co BTEL.BH (Batelco) said on Monday it planned to spend at least $4 billion on foreign acquisitions to offset an expected fall in profitability in its home market as competition intensifies.

Batelco, which lost its domestic mobile phone monopoly three years ago, will also seek to borrow up to $1.5 billion and sell shares to fund acquisitions, Chief Executive Officer Peter Kaliaropoulos told reporters in the Bahraini capital, Manama.

"Our preference is for big acquisitions ... about $2 to $4 billion to buy companies of the size of Batelco," Kaliaropoulos said, making clear later that the value was for individual buys.

Batelco, worth $3.2 billion, is planning to make one or two purchases next year, and is considering bidding for a stake in a mobile company Kuwait is setting up, Kaliaropoulos said.

Batelco has also bid "several hundred million dollars" -- but less than $800 million -- for Qatar's second mobile phone license, he told Reuters.

"The new year will see further major changes in the telecom industry in Bahrain which may adversely affect the bottom line of the Bahrain operations," Kaliaropoulos said.

"In Bahrain, the level of profitability over the next few years is expected to decline," he said.

Batelco, which competes in providing mobile phone services in Bahrain with Kuwait's Mobile Telecommunications Co (ZAIN.KW: Quote, Profile, Research, Stock Buzz), has been under pressure from the telecom regulator to reduce its charges to other operators using its infrastructure.