A Telecom Egypt building is seen at the Smart Village in the outskirts of Cairo, Egypt, October 27, 2015 (Reuters)
Telecom Egypt, the country's state-owned landline monopoly, is in talks with banks about a EGP 5 billion loan to acquire a 4G licence, banking sources said on Thursday.
The sources said Etisalat Egypt was also in talks with banks for a 5 billion pound loan to acquire the licence.
"TE is negotiating to acquire five billion pounds, and Etisalat Egypt is also negotiating for the same amount to obtain the 4G licence, the National Bank of Egypt is participating in managing the loans," one banking source said.
The sale of 4G licences is part of a long-awaited plan to reform Egyptian telecoms. The reforms will potentially allow Egypt's land-line monopoly, TE, which owns a 45 percent stake in Vodafone Egypt, to enter the mobile phone market directly.
It will also allow mobile operators to offer fixed line services, ending Telecom Egypt's dominance.
Telecom Egypt and Etisalat Egypt were not immediately available to comment.
Egypt's telecom regulator has approached Egypt's three operating companies currently offering mobile services - Orange Egypt, Vodafone Egypt, and Etisalat about buying the 4G licences.
Saudi Telecom, Kuwait's Zain, China Telecom and a European firm have expressed interest in the licences.
Orange Egypt said it is not seeking loans from Egyptian banks, an Orange official told Reuters.
"We are in talks with our parent company to finance the 4G licence, we will not acquire loans or credit facilities domestically so that we don't sustain interest burdens on the company's earnings," the official said.
Orange Egypt said last month that Egypt's telecommunications regulator had asked it to pay EGP 3.54 billion for a licence to offer fourth-generation mobile phone services.
The government has said a unified licence will put all four telecoms companies on an equal footing. It also hopes to collect a total of EGP 22.3 billion from licence fees, Communications and Information Technology minister Yasser al-Kadi said last month.
The current operators have until the first week of August to submit applications.
*The official exchange rate for $1 = EGP 8.78