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 France Telecom KOREK and The Iraqi Telecom Fruits

  The opinions expressed in this commentary are solely those of the author


France Telecom KOREK and The Iraqi Telecom Fruits ‎ 7.7.2012 
By Mrs. Benaw Izzat, Erbil
Special to

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July 7, 2012

ERBIL-Hewlêr, Kurdistan region 'Iraq', — This week on July 5th, France Telecom former CEO Didier Lombard who left the company under pressure in March 2010 was indicted as well as two others managers by judge Pascal Gand in Paris over allegations that he led a corporate culture of harassment that resulted in the suicide of at least 30 employees.

His program so called “NEXT” cut more than 22,000 jobs over a short time and made managers change jobs every three years. He was replaced by Stephane Richard frequently described as a close friend of former President Nicolas Sarkozy.

A few months later, on November 25Th 2010 the Financial Times started announcing that France Telecom was eyeing a stake in the Kurdish telecom operator Korek. It ended up in a deal, investing USD 430 M for a 20% minority stake. (see the details  and )

Among the 35 employees who committed suicide left several notes blaming the intense pressure at work; making hard to understand that suddenly a few months later a small company like Korek could become by virtue such a strategic priority justifying a heavy investment in a war torn country like Iraq.

In 2012 France Telecom reported a strong loss on this investment and now Ahmed Alomary, commissioner of Iraq's Communications and Media Commission (CMC) fines Korek, Asiacell and Zain for missing one more time the deadline to do their IPO on Baghdad Stock Exchange.

Zain announced that they already spent USD 20M to prepare the IPO and they hired notorious international banks such as BNP Paribas, Citigroup and National Bank of Kuweit. Zain is fined USD12.864/day but they represent 53% of the market. (source Zain annual report 2011)

Asiacell now owned at 60 % by Qatar telecom represents 38% of the market and is fined USD 8 500,-per day.

Korek which according to its CEO GhadaGebara appointed Lebanon's Byblos Bank and Iraq's North Bank in December 2011 (source  ) represents 9% of the market and is fined USD 2 500,- per day.

France Telecom employees will appreciate that their restless efforts have been bearing such a nice fruit.

As for Zain with USD 20M they could have bought 10% of Dar El Salaam bank (HSBC), or the total market capitalization of the ISX insurance sector(USD12M) plus the total of the investment sector (USD8M). (source )

At the end will the Iraqi customer pay for those bitter fruits?

By Mrs. Benaw Izzat -

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The opinions expressed in this commentary are solely those of the author


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