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Egypt considering auctioning 4G licences internationally

After all three Egyptian operators chose not to acquire a 4G licence due finding the terms unfavourable, the government is debating whether to auction them internationally.

Etisalat, Orange Egypt and Vodafone Egypt all shunned the opportunity to acquire a 4G licence, with only fixed line incumbent Telecom Egypt picking one up for EGP7.08 billion ($797 million). This will allow the operator to move into the mobile market directly as opposed to via a partnership with another provider.

Egypt’s regulator NTRA is also considering alternative routes to bringing 4G services to the market, and has stated that “options will be presented to the board of directors at its next meeting in early October.”

Despite the snub by Egypt’s domestic operators, many international firms – including China Telecom, Lebara KSA, Saudi Telecom Company and Zain – have indicated that they would be keen to obtain an Egyptian 4G licence.

Vodafone Egypt has noted that it would be interested in a licence if the terms are updated to “encourage future investment in the development of Egypt’s mobile industry.” It noted that it originally declined the licence as it did not provide adequate spectrum for the operation of 4G services, but added: “we want to launch 4G in Egypt as soon as possible… Vodafone will work alongside the Egyptian government to try and achieve this.”

Operators reportedly also objected to the stipulation that half of the payments for the licences were to be made in US dollars. While the telecoms ministry has stated that the licensing terms will be updated to include more spectrum, they also noted that the payment conditions would remain the same.

A Reuters report noted that “Egypt needs hard currency after burning through its foreign exchange reserves as political turmoil hit foreign investment and tourism since a 2011 uprising.” The government is looking to raise around EGP22.3 billion from the auctions.

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