"The company reviewed available foreign investment opportunities, based on the return on (foreign) investment compared with domestic investment, and decided not to go ahead with the Tunisie Telecom investment opportunity," Saudi Telecom announced.

The partial privatisation of Tunisia's largest telecommunications provider and most profitable company is expected to raise about US$ 1.7. The sale attracted interest from several top European and Middle Eastern operators. Vivendi Universal, France Telecom and Etisalat were among those to pre-qualify as potential bidders. Telefonica and Bouygues Telecom have withdrawn from the list of bidders, while Vivendi and France Telecom have said that they are still interested.

The government originally hoped to conclude the sale by December 13, 2005, but has postponed the bid deadline. The government now expects to select a winner in April.

Saudi Telecom "is still looking at other investment opportunities," the company said in a reference to its interest in a third mobile license in Egypt.

"STC (Saudi Telecom) has more to gain focusing on the potential of the domestic market than buying a minority stake in Tunisie Telecom," an industry source said.

Saudi Telecom recently named the head of its mobile operations, Saud al-Duweish, as its new CEO. The move illustrated Saudi Telecom’s intention to capitalise on the potential of the mobile sector and fight strong competition from private mobile operator Mobily, which cut into STC's profits in its first year of business, analysts say.

Source: Reuters - WDR/Intelecon Regulatory News