There are several examples: in 2008, Mexico lifted the 49% FDI cap in fixed-line telecommunications; Vietnam issued a decree that encourages all economic sectors to invest in telecoms; Zambia agreed to deregulate its international telecoms gateway to promote competition and foreign investment; and Indonesia reversed a policy to allow Qatar’s Qtel to raise its stake in Indosat’s mobile and fixed-line operator from 49% to 65%.

A recent trend in the sector has been the emergence of several global players based in the developing world (such as Etisalat, Zain and Orascom). These are proceeding with their overseas expansion plans and entering new markets despite

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the financial crisis. In January, Telecel Globe, an affiliate of Orascom Telecom, acquired Namibia’s Cell One mobile operator. Orascom Telecom has also entered the North Korean market (third-generation service) and has expanded its activities in Lebanon (management contract for Alfa). Etisalat is expanding in Iran, receiving the country’s third national mobile licence as part of a consortium with Taameen Telecom (Iran). The company has also made substantial investments in Pakistan’s telecoms sector. Zain has been awarded a licence to manage one of Lebanon’s mobile phone operators. These companies, eager to establish themselves as global or regional players, are helping to lessen the overall adverse impact that the financial crisis and recession have had on foreign investment in telecoms.

However, as is the case in other industries, the economic climate is having an adverse impact on privatisation in telecoms. A few scheduled sales of state-owned telecoms have been postponed. One recent example is Telekom Srbija (Serbia), whose privatisation last year was put on hold citing the economic climate as an important factor. Lebanon has cited the financial crisis as influencing its decision not to pursue the privatisation of its cellular networks.

Nevertheless, some sales are proceeding. In February 2009, mobile phone operator Albanian Mobile Communication was further privatised through the sale of a 12.6% stake to Cosmote (Greece) for €48.2m. Ukraine has announced its intention to launch a tender for the privatisation sale of 67.79% of fixed-line operator Ukrtelecom in 2009. This is in line with the country’s accelerated privatisation programme, which is expected to be a source of funds in the worsening economic conditions in Ukraine.

Asia

Korea is planning to engage in the privatisation sale of several state-owned enterprises acquired during the Asian financial crisis in the late 1990s, to boost FDI.

Pakistan has published the list of enterprises seeking private sector participation in its public-private partnerships framework.

Europe

Ukraine has published a list of 232 companies to be privatised this year, including a 90.8% stake in cable maker Azovkabel and a 100% stake in Ukrainian National Airlines.

The Czech Republic is to proceed with the privatisation of Ceske Aerolinie.

Montenegro is to privatise the Port of Bar.

Middle East and Africa

Iran is privatising Homa, Iran Air Tour and the Homa Hotel Group.

Nigeria intends to sell four oil refineries.

Tunisia has an open international tender for a mobile telecoms licence award.

This privatisation news is provided by the FDI.net Privatisation Alert (www.fdi.net/privatizationalert). FDI.net is a web portal from the Multilateral Investment Guarantee Agency, a member of the World Bank Group, that offers free, on-demand country analysis and information on issues related to foreign direct investment in 175 countries.