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France Telecom buys into Jordan Telecoms

AMMAN: Jordan sold 40 percent of its profitable state telecommunications firm on Sunday to France Telecom and minority partner Arab Bank in the country's first major privatisation deal.

The $508 million deal was signed at a ceremony attended by Prime Minister Abdul-Raouf al-Rawabdeh and France Telecom chairman Michel Bon and senior government officials.

Under the combined sale France Telecom has acquired 35.2 percent and Arab Bank 4.8 percent of Jordan Telecommunications Co (JTC), leaving the goverment as the majority shareholder.

Bon said the acquisition would boost the French firm's regional presence, which already counts interests in Egypt and Lebanon, and told Reuters it planned to invest over $400 million within the next four years on modernising and revamping Jordan's telecommunications infrastructure.

"Now France Telecom is by far the largest international telecommunications firm involved in this area and we intend to make the Middle East one of our strong points," Bon said.

"What we are doing in Jordan will make it the largest involvement in the region...We would like to make JTC the benchmark of communications in the region," Bon said.

JTC , with a monopoly over fixed lines until 2002, reported 1999 earnings of 216 million dinars ($305 million), up from 189 million dinars the previous year.

Finance Minister Michel Marto said the deal also emphasised Jordan's seriousness in pushing ahead with liberalising its economy and fulfilling its commitments to accelerate privatisation under IMF-guided reforms.

"Privatisation is moving rapidly and this deal shows that we are meeting our commitments in privatisation," he told Reuters.

The JTC deal brings to an end a long saga of failed efforts since 1997 to sell a major stake as an essential part of a broader national economic liberalisation.

Jordan had been negotiating with France Telecom since November after the the withdrawal of Emirates Ein Investment Group, the investment arm of the United Arab Emirates royal family which had U.S. giant GTE as technical partner.

The deal is the first serious privatisation deal since the kingdom began an accelerated liberalisation under three-year IMF reforms begun last year that have also secured it World Trade Organisation (WTO) membership.

FRANCE TELECOM WANTS TO MODERNISE JTC

Jordan's strong growth potential in telecommunications, especially in cellular and Internet services, encouraged France Telecom to enter the Jordanian market, Bon said.

"JTC is a company that is well managed from the technical and financial sides and enjoying strong growth potential," he said.

France Telecom and its minority partner now have three seats on a new seven-member board running the restructured JTC.

The new firm plans a new GSM cellular service to compete with the country's sole provider by next September alongside development of the fast expanding Internet market.-Reuters