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Vodafone may acquire Telecom Egypt’s JV stake

Vodafone is reportedly looking to buy out Telecom Egypt’s 45% stake in Vodafone Egypt for as much as $2 billion.

A sale would be a welcome cash injection for the government, which holds an 80% stake in Telecom Egypt, and could also prevent a conflict of interest for the operator, which currently has a monopoly on the country’s fixed-line market.

Telecom Egypt has applied for an integrated licence, which would grant it permission to offer both mobile and fixed services – a first in Egypt. The country’s three leading mobile operators – Etisalat, Orange and Vodafone - could also apply for integrated licences, allowing them to enter the fixed-line market.

While this could lead to Telecom Egypt holding stakes in competing firms, the operator stated in August that it did not need to divest its Vodafone stake in order to obtain an integrated licence. It is currently unclear whether further integrated licences will be issued.

The Egyptian regulator has confirmed that it would issue Telecom Egypt with an MVNO licence if requested. If the operator wished to offer mobile services it would need to sell its stake in Vodafone Egypt. The proceeds from the sale could be enough to acquire a 4G licence and begin building out infrastructure.

 

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