AT Capital

AT Capital Telecoms Update - 24 September 2008

Key themes in this issue:

• A surprise announcement today was that Anders Jensen, Grameenphone's (GP) CEO, has decided to step down well before his term finished at the end of 2010.

• Although GP stated that it would have no impact on the IPO, local and international investors are not surprisingly carefully assessing what the surprise events actually mean.

• Among other potential issues, it is natural to consider whether the change in leadership reflects the disappointing performance of Grameenphone which might be a negative for the IPO

• Was Telenor concerned about the recent problems and uncertainty as a result of the ownership conflict with Professor Yunus and Grameen Telecom?

• A more optimistic view is that the change in leadership may reflect a behind-the-scenes deal between Telenor and Grameen Telecom for a Bangladeshi CEO that might address some of the concerns Professor Yunus has.

• However, it still does not address the fundamental issue of Grameen Telecom moving to a majority ownership stake in GP.

• While there are still many unknowns, including the tax dispute between GP and NBR, it appears ambitious, albeit not impossible, for the IPO to be completed before year-end.

• If the company wants a successful IPO, it is imperative that the company provides the market and especially foreign investors with greater clarity on the future CEO, a resolution of the shareholder dispute with Professor Yunus, and the text dispute with NBR.