Armies of Liberation

Background: In November 2005, UNITEL signed a new agreement with the Ministry of Telecommunications and Information Technology which grants it priority in operating the third GSM company in Yemen. Unitel was a product of China Mobile Telecommunications Corp. and a group of Yemeni and Arab businessmen. The agreement is valued at USD149 million. UNITEL initially failed to pay the USD149 million to the Yemeni governments. In July, second highest bidder, Omantel, declined to resubmit its offer of USD 100 million, telling Elaph website that it was dissatisfied with the Yemeni governments handling of the UNITEL transaction. The Saudi-based House for Integrated Technology Systems and UNITEL merged to form HitsUnitel. Later in October of 2006, UNITEL reportedly paid the debt and is on track to establish the company. HITSUNIEL reportedly increased its capital to USD190 million during its first meeting in January 2007 and will be managed by Damascus-based Syriatel Mobile Telecom under the chairmanship of Nader Al Kalai, Syriatel’s chief executive. The company expects to operational by mid 2007.

Coninuing the Unitel, Omantel saga, the Saudi company HITS doesnt appear to exist in any substantial form according to the following article from allafrica.com (who tried to reach them and found all their phones unavailable.)

The Monitor (Kampala)
NEWS
April 3, 2007
Posted to the web April 2, 2007

By Muhereza Kyamutetera

So much could have been said and promised by Hits Telecom, but who are the people behind it and can the company deliver on its promises?

On March 12, the same day Hits Telecom got their telecom licence, the company’s directors, Abdul Karim Ahmet Abushanab, and House of Integrated Technical and Systems Limited, sold their shareholding to Middle East and Africa Investments Company for a nominal Shs10 million each.

This, according to sources, made Middle East and Africa Investments Company (MEAIC) the majority shareholder with 88 per cent and the rest (12 per cent) belonging to Veritus, the supposedly local investor.

This however raises questions as to why any investor would chose to sell off their holding on the same day the company acquired a licence.

HITS telecom directors could not be reached for a comment as all their phones were not available.

On the same day, however, Edwin Rowell, Hits Telecom CEO, promised not just mere mobile phone services, but a real shake up of the mobile phone market.

Mr Rowel said his company, based in Saudi Arabia, alongside with a local partner, Veritus Communications would sink into the market $150 million (Shs262.5 billion) this year and another $50 million (Shs87.5 billion) in the first quarter of next year.

The tough-talking Mr Rowel did not mince words on the need to “increase the network capacity in Uganda to meet the existing as well as the future demand of subscribers.”

He further predicted: “All over the world, the expansion of the number of operators and the associated competition drives down tariffs and improves service for the customers. Uganda will not be an exception to this principle.” |

As expected, the market welcomed Hits Telecom, as a saviour form tariffs the public considers high, given the economies of scale that the players should be enjoying given that mobile subscription is close to 3 million customers or nearly 10 per cent.

In a recent press interview, Mr Rowell reportedly said the company will begin rolling out on April 3. “The rollout team of some 17 quality individuals will arrive on April 3 to export their expertise to Uganda, covering all functions,” he was quoted in the the New Vision. According to him they would include several hard-nosed veterans of Africa to get the job done.

Ultimate Media quoted him as having said the company would also invest up to $500 million (Shs875 billion) in power generation.

So much could have been said and promised by Hits Telecom, but who are the people behind it and can the company deliver on its promises?

The company behind Hits Telecom is registered at the Registry of Companies as House of Integrated Technical Systems Uganda Limited thus the name Hits.

Documents available to Business Power indicate that the company was registered on November 22, 2006 by four shareholders.

These are: Abdul Karim Ahmet Abushanab whose registered address is P.O Box 1809 Kampala and MEAIC also registered at the same address.

The other shareholders are Veritas Communications which is registered in Tortola British Virgin Islands (though Rowell claimed it is a local partner) and House of Integrated Technical Systems Limited registered in Al Ulayya, Riyadh in Saudi Arabia.

The documents filed by their lawyer, Salim Makeera of Salim Makeera Advocates on Metropole House, however do not indicate how much shareholding each of the shareholders has in the company. Their bankers are: Crane Bank, Standard Chartered Bank, Stanbic Bank and Tropical Africa Bank. Although Hits telecom announced that it has 2.5 million subscribers in Yemen, Saudi Arabia, and Algeria, the company, according Yemen Times newspaper, is yet to start operations in the country.

According to Yemen Times, their alliance with Chinese investors, Unitel to form Hits Unitel failed to take off until they were rescued by Syria’s Syriatel which acquired a 10 percent holding and has assumed management. HitsUnitel is expected to begin operations mid 2007.

It is not clear though, whether the company has GSM operations in Saudi Arabia as the country has only three players: MTN Saudi Arabia, Bravo and the Kuwaiti based MTC which has just won the third mobile GSM operator licence.

It is also not clear whether Hits is a shareholder in Algerie Telecom and Orascom Telecom Algeria, the only two mobile players there.

A google search on the company only yields stories written by the local media on the company, suggesting that the company has no official website. Only time will tell whether Hits Telecom has the resources to take off.

And as long as we’re on the topic of mobile phone providers:

almotamar.net –

SANA’A, April 03(Saba)- The GSM service operator Spacetel Yemen has announced its combination with the Mobile Telephone Network (MTN)to become MTN Yemen.

In a press conference held at Taj Sheba Hotel in Sana’a on Tuesday on the announcement, the executive director of MTN Yemen, Raed Ahmad, said that combination process is considered to be a unique economic success that reflects Yemen’s successful steps in economic
development.

“It is an economic success for Spacetel and Yemen in general and it clearly indicates the success of mobile service in Yemen and the interest of the government to encourage giant companies to invest in Yemen,” said Raed.

He said that Spacetel Yemen belongs to the Investcom group which was established in 1994 and has branches in 10 countries. He said that
the Investcom combined with MTN Yemen in July 2006.

Walid Okawi director general of Marketing in the MTN Yemen, said the number of subscribers to Spacetel Yemen reached 1.25 million by the end of 2006 covering 69% of Yemen.

The combination with MTN, to become MTN Yemen, will enable us to develop our services and extend the MTN Yemen coverage and to support Yemeni society through sponsoring sport, culture, environment and creative activities, said Okawi.

In the vision of MTN group strategy and according to the unlimited development activities it regards, MTN Yemen has signed sponsorship agreements with six Yemeni prominent soccer clubs for the current
sports season 2007-2008.

The MTN has 40 million subscribers in 21 countries, in Africa and Middle East. Its revenues has exceeded USD 7 billion and the amount of profit is $2.97 billion.

The Spacetel Yemen and Sabafon are the first GSM service operator in Yemen as they started in 2001.