Telecom Egypt board tentatively agrees to buy 4G license

Reuters , Sunday 31 Jul 2016

Telecom Egypt
A Telecom Egypt building is seen at the Smart Village in the outskirts of Cairo, Egypt, October 27, 2015 (Reuters)

Telecom Egypt (TE), the state-owned landline monopoly, said on Sunday its board had tentatively approved plans to buy a fourth-generation mobile license and a company official said it would offer the services within a year of obtaining frequencies.

Egypt is selling four 4G licenses as part of a long-awaited plan to reform the telecoms sector.

The reforms will potentially allow Telecom Egypt, which owns a 45 percent stake in Vodafone Egypt, to enter the mobile phone market directly. They could also allow Egypt's three mobile operators to offer fixed-line services, ending TE's dominance.

TE said in a statement on the stock exchange website that its board of directors had given its preliminary approval on July 28 and a full study of the 4G license plan would now be presented to the investment committee.

"Telecom Egypt will provide the service within a year of obtaining the license due to its need for experts to run mobile services, prepare networks and work on agreements," a TE official, who declined to be named, told Reuters.

Egypt's telecom regulator has directly offered 4G licenses to the three companies currently offering mobile services - Orange Egypt EMOB.CA, Vodafone Egypt, and Etisalat -- as well as to TE. Only Orange Egypt has disclosed the price it has been offered to obtain the license -- about $400 million.

Banking sources told Reuters earlier this month that Telecom Egypt was in talks with banks to secure a loan worth 5 billion Egyptian pounds ($563.07 million) to acquire a 4G license.

The operators have until the first week of August to submit responses.

The government hopes to collect a total of 22.3 billion Egyptian pounds from license fees, Communications and Information Technology minister Yasser El-Kadi said last month.

The company's shares were traded on the Egyptian Stock Exchange at 9.25 pounds, up by 1.3 percent.

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