The interim Egyptian government said on Tuesday in an interview that it is looking to postpone a fourth mobile operator license in the country. According to Communications Minister, Maguid Osman, in an interview with Bloomberg news agency, the government is “unsure” of launching a new license at this time.
“There are a lot of changes in Egypt now and we are not sure whether launching a new license at this moment is the right decision from the economic point of view,” he said.
The move has Telecom Egypt, a company that most believed would win the new license, looking into purchasing the rest of Vodafone Group’s local unit in the country.
The landline monopoly and state-owned telecom operator currently owns 45 percent of the local Vodafone company, but is looking at ways to expand its stale customer base as it risks losing revenue.
Last year, Telecom Egypt attempted to purchase the remaining share of the local unit, but the world’s largest mobile phone operator ended the talks without a deal going through.
Hassan Naguib, a Cairo-based analyst and former ministry of communications official, said that Telecom Egypt is “desperate to broaden their footprint on the telecom market in the country and the fourth license was what they were looking for, so now it puts them in a bind.”
He did say that it may be difficult for the state-owned operator to purchase Vodafone’s unit as a result of the company’s rising value and stock in the past year.
Bloomberg reported that Vodafone “has risen 31 percent in the last 12 months, compared with a 15 percent gain in the UK’s FTSE 100 benchmark index.”
This could make Telecom Egypt’s efforts increasingly difficult.
By Desmond Shephard
