PALTEL

active

PALTEL was founded in 1995, after the Palestinian Authority was granted the right to build an independent telecommunications network to serve the Palestinians in the West bank and Gaza Strip. Palestine Development and Investment Company (PADICO), PALTEL's parent was created shortly after the 1993 Oslo peace accords between the Palestinian Authority (PA) and Israel. PALTEL was created with 66 institutional investors forming the core of the company. The investors agreed to own 75% of the company and offer the remaining 25% to the public by a local IPO. That IPO was four times oversubscribed, raising about US$65 million. By 1998, PALTEL was a publicly traded company on the Palestinian stock exchange owned by over 6,000 individual shareholders. The small core group of the institutional investors were overseeing both the strategic issues and daily management issues. The most visible of these were the largest PALTEL investor, PADICO (19.44%) and the Palestine Commercial Services Company (PCSC) (5.84%), which represented the interests of the Palestinian Authority in PALTEL. The Arab Bank owned a 7.78% stake in the company, while the Al-Aqqad Company and the Cairo Amman Bank each owned 3.89%. PALTEL began trading on the Palestine Stock Exchange in June of 2000. In 2005, stocks of Paltel were listed on Abu Dhabi Stock Exchange. As of 2002, public shareholders owned 29%, with PADICO holding 25.79%. PALTEL was granted a 20 year license to operate basic and value added telecommunications services in November 1996. The license could be extended for additional 20 years. The license granted PALTEL monopoly rights for all basic services, including Internet services. In addition PALTEL had exclusive rights to provide cellular services for 5 years or until the subscriber base reacheed 120,000; whichever came first. In addition, PALTEL officially took over operations from the Ministry of Post and Telecommunications in 1997 acquiring the ownership and operation of 77,400 main lines in service and the associated network infrastructure. The license required PALTEL to have 250,000 fixed lines installed within the first three years of operations including 75,000 acquired from the Ministry of Posts and Telecommunications. By the end of 1997, its first year of operation, PALTEL had added an estimated 25,000 lines. The total investment in its first year was US$50 million, 22% of which came from PADICO. In its first three years PALTEL planned to invest US$300 million; while its long term plans included a total of US$600 million investment over the next 20 years. Ericsson Israel Ltd. received US$40 million of that to build and operate PALTEL's cellular network which was launched in 1998. It had attracted 140,000 subscribers by mid-1998, compared with just over 110,000 lines in place in the West Bank and Gaza in 1997. By end 2004, the number of subscribers totaled about 400,000. In 1999, PALTEL introduced PALCEL (Jawwal), its own Palestinian cellular network, but then spun it off into its own company in which PALTEL held the majority stake. By end-2004, PALTEL had 290,010 active fixed-line subscribers, about 193,211 lines in the West Bank and the remaining at Gaza Strip. The investment figures from 2004 on out, when PalTel re-acquired 100% of PalCel, are inclusive of the two companies in their annual financial reports which can be found here: http://www.paltel.ps/shareholders.cfm 2005 capex of Paltel are the capex figures for Jawwal from annual Report DON'T DOUBLE COUNT INVESTMENT FIGURES. Investment figure 2011 based on Wireless Intelligence Q1-Q3, extrapolated for the whole year. Capex 2012: Wireless Intel