Amazing news this morning. Umnia has been sold to Batelco (Bahrain Telecom) for 415 million dollars. Not bad for a company that is only one year old. Also not bad for Michael Dagher, the Lebanese American entrepreneur, who came to Jordan originally to head up Fastlink and who is a major shareholder in Umnia.
This kind of huge corporate acquisition is another example of the amazing cross-border investment activity happening in the Arab world today. I wonder what the late Arab Nationalists leader Jamal Abdelnasser would think of such deals: A Lebanese guy, starts a company in Jordan (with the help of Kuwaiti money from Al Ghanem group and Global Investments), uses low cost Chinese equipment (from Huawei) to quickly deploy a national communication network.. then sells the company to Bahrain’s national telecom company. Long live Arab unity
What is also interesting is the possible connection with Batelco Jordan (which is being alluded to in the press release). Batelco Jordan has been the most aggressive in positioning itself as a new alternative national telecom in Jordan. It has been lately promoting bundled broadband and cheap international calling services and has been promoting its Dunia branded calling cards.
The tie-up with Umnia means that Batelco-Jordan can start offering mobile and internet services (including IP voice services, of course). Umnia also has a strong retail presence through its network of distributers, which Batelco Jordan lacks.
If Betelco-Jordan can crack the bandwidth nut and get cheaper bandwidth independent from Jordan Telecom, then it will be in a strong position to start offering the kinds of services that telecom liberalization is supposed to bring. Jordan’s telecom market has been liberalized for 18 months and we still have not seen many results.
Internet usage is still low (but growing). I think that it is REALLY time for someone to offer higher, more reliable access speeds for low prices. Bundling VoIP phone services as well as other IP services on top of an affordable internet will surely have an effect on internet adoption in Jordan.
Finally, what will happen to the brands involved. Batelco-Jordan, has undergone two ‘rebranding’ efforts over the past two years. The original Batelco name is uninspiring (sounds like: ‘Battle’ Co). It is quite well known in Jordan as an ISP. The latest rebranding is probably helping shift the perception to ‘comprehensive telecom’ rather than ‘ISP’.
The Umnia brand, on the other hand, is quite something. It is Arabic, which makes it accessible to a large number of people. It means ‘wish’. It has the potential to be an aspiration lifestyle brand. It has made inroads in the youth market. It has distribution and recognition.
Despite the conceptual strength of the Umnia brand, I see it as highly unlikey that all Batelco activities in Jordan will be Umnia branded. Nonetheless it will be something interesting to watch how things unfold from the perspective of branding and bundled service provision.