Telecom Egypt, the country’s fixed-line monopoly, has made an informal approach to buy out Vodafone’s £3bn, 55% controlling stake in mobile phone operator Vodafone Egypt.
The two companies held initial talks about a possible deal about a month…
Telecom Egypt, the country’s fixed-line monopoly, has made an informal approach to buy out Vodafone’s £3bn, 55% controlling stake in mobile phone operator Vodafone Egypt.
The two companies held initial talks about a possible deal about a month ago.
Telecom Egypt owns the remaining 45% stake in Vodafone Egypt – a company that it set up in partnership with Vodafone in 1998.
On 13 May, Tarek Tantawy, Telecom Egypt’s chief executive officer, said that he wanted the company to own a mobile phone operator as soon as possible. Telecom Egypt’s fixed-line customer base has shrunk over the last few years as it faces increasing competition from cheap mobile phone subscriptions.
Telecom Egypt could also enter the mobile phone market if the Egyptian government auctions a new mobile phone licence later this year.
The Egyptian authorities may auction a fourth licence after October this year, according to Nick Read, Vodafone Group’s chief executive officer for the Asia Pacific and Middle East region, who spoke on the sidelines of Vodafone’s annual results on 18 May.
Telecom Egypt said it would consider either a takeover of Vodafone Egypt or the acquisition of the new licence.
“The company is exploring several alternatives including increasing its stake and role in Vodafone Egypt or potentially to apply for the fourth mobile licence if the Egyptian government were to make one available,” the company said in a statement on 21 May.
If the government auctions a further licence, however, Telecom Egypt risks losing out to a more cash-rich bidder, such as Saudi Telecom, the Arab world’s largest operator by market capitalisation.