By Yousef SABA

DUBAI (Reuters) – UAE telecoms group e& said on Friday it will consider joint investments with Vodafone (NASDAQ:) after buying a 9.8% stake in the British company last week, and is seeking to cooperate on procurement as well as research and development.

Hatem Dowidar (CEO of Etisalat) said that he is confident in Vodafone’s strategy. This includes streamlining and consolidation in Europe.

When Dowidar was asked whether Vodafone should be more aggressive in its acquisition strategy, Dowidar stated that “I believe they are very clear about what they need to do and that they’re working hard to achieve it.”

He stated that the channel would be open to investment if it makes economic sense for them.

Dowidar said e& bought the stake because it saw Vodafone as undervalued and dividend returns are higher than the cost of debt backing the deal, adding there are no plans to increase the holding “at the moment” and e& would remain a passive investor.

Dowidar stated that $4.4billion was paid for by a partially-drawn $7billion one-year credit facility. The consortium included banks. She declined to give names.

Dowidar stated that the two companies would collaborate on research and development, such as Open Radio Access Network. He also said procurement (including standard parts) will be a part of their collaboration, which will reduce costs. Joint ventures are also possible.

Dowidar said e& is looking at more opportunities in telecoms and expects to make small investments in venture capital.

“If we discover similar opportunities to Vodafone or companies that yield good dividends that we could have some synergies with, that’s what we will do… it is something we will be looking at,” he said.

Additionally, it expects to finalize its offer to boost its Saudi Arabian Mobily stake to half-off by the end the third quarter.

While e& has no current plans to raise more debt this year, it will consider issuing bonds when markets stabilise.