Telecom Egypt could acquire a controlling stake in Vodafone’s Egyptian operation once the 4G licensing process is underway.
The development is highly surprising, as Vodafone was widely believed to be interested in buying out Telecom Egypt’s 45% stake in Vodafone Egypt. This would have provided a much-needed cash injection for the Egyptian government, and would have prevented a conflict of interest for Telecom Egypt, which has a monopoly on the fixed-line market.
Telecom Egypt has applied for a concession that has never previously been available in Egypt – an integrated licence that would allow it to offer both fixed and mobile services. If rival operators such as Vodafone obtained integrated licences, they could also begin a fixed offering – and this would lead to a conflict of interest for Telecom Egypt.
Telecom Egypt CEO Mohamed El-Nawawy said: “Management may propose that we evolve with this asset, and by ‘evolve’ we mean being buyers or sellers.” He added that integrated licences would likely be issued before the end of the year, with 4G licences following within the next year.
