Egyptian regulator receives two bids for fixed-line licence

Egypt’s telecoms regulator has received two bids for a licence to run the country’s second fixed-line telecoms licence.
Amr Badawi, the executive president of the National Telecom Regulatory Authority, said that two companies bid for the licence before…

Egypt’s telecoms regulator has received two bids for a licence to run the country’s second fixed-line telecoms licence.

Amr Badawi, the executive president of the National Telecom Regulatory Authority, said that two companies bid for the licence before the regulator’s deadline on 15 April.

Badawi declined to name the bidders and – so far – neither company has leaked their involvement in the competition to the international or local press.

The winner of the licence will provide fixed-line services to a series of residential compounds, each containing about 10,000 homes, outside Egypt’s largest cities.

“They are on the outskirts of Cairo and Alexandria, but they have not mentioned any names,” said Nadine Ghobrial, telecoms analyst at EFG-Hermes, an Egyptian investment bank.

As the regulator has not given the bidders enough information to put a value on the licence, it has instead asked them to file solely technical bids. The company that wins the bid on its technical merits will pay the regulator a share of its revenues. Analysts estimate that the regulator wants 8% of sales.

Telecoms analysts believe that both bidders are local companies because the licence, which does not give the right to provide fixed-line services to the vast majority of Egyptian homes, is too small for an international telco to make a sufficient return.

“We only heard about local companies interested in the licences,” said Ghobrial. “However, in my opinion, the licence is the best way to introduce competition to the fixed-line market without hurting Telecom Egypt.”

Telecom Egypt, which is majority owned by the Egyptian government, has suffered from increasing competition with Egypt’s three mobile phone operators: Etisalat Misr, Mobinil and Vodafone Egypt.