Reuters
CAIRO: The country s sole fixed-line telecoms operator, Telecom Egypt, is considering competing for Saudi Arabia s second fixed-line license next year, a senior company executive said on Thursday. Saudi authorities are expected to offer the second fixed-line and the third mobile licenses in 2007. Of course we would have to look at the terms of the offer and what license fee was expected to be paid, Director of Investment Tarek Tantawy told Reuters in an interview. If we find the terms acceptable then yes … we will go for it, he added. Telecom Egypt, which increased its stake in Vodafone Egypt to nearly 49 percent in a deal executed on Wednesday, already has Internet DSL operations in Jordan through its subsidiary TE Data and a fixed-line operation in Algeria. The operation in Algeria is not huge or significant within the TE group context, but its importance mainly lies in being the first cross-border operation, and we are using it as a test case to explore further regional opportunities, Tantawy said. Telecom Egypt had initially bid for Egypt s third mobile network but lost the competition in July to Etisalat of the United Arab Emirates, which won with a bid of LE 16.7 billion. Ideally we would have loved to have a majority-owned mobile subsidiary but the second-best option for us was to increase the stake in Vodafone Egypt, which means basically more exposure to the fast-growing mobile market in terms of increasing revenues and increasing profitability, Tantawy said. He also said Telecom Egypt was willing to buy more shares in Vodafone Egypt if British group Vodafone agreed to sell any of its 50.1 percent stake in the firm. The British firm has said it would not sell any of its shares in the Vodafone Egypt. Shares in Telecom Egypt, which was partly privatized in 2005, have jumped by 27 percent to about LE 16.55 a share since it announced its interest in buying the Vodafone Egypt stake.
The company financed the acquisition of Vodafone Egypt shares by gathering around LE 4.5 billion in loans and some LE 1.1 billion from its own resources. This debt was basically raised within an hour s time, Tantawy added, putting the company s debt-to-equity ratio at less than 40 percent, which he described as very conservative within the telecom sector. Tantawy said Telecom Egypt would begin serious talks with Vodafone Egypt by mid-November over possible joint services that both firms can offer to their subscribers in the coming year. We have the fixed line and broadband platform and Vodafone has mobile platform and obviously to any subscriber it would make sense to have all the services from one provider, he said. This has to be validated and approved by the regulator … we will be doing it in a way which does not jeopardize the competitive situation in the market.
