GENEVA: The Egyptian government will not allow Telecom Egypt to purchase two information technology units, up for sale by Orascom Telecom, preferring private investors as buyers, the communications minister said.
We will not allow it because it (Telecom Egypt) will be too dominant in the market, Tarek Kamel told Reuters in an interview at a telecoms industry conference in Geneva.
It would exceed 90 percent of the capacity and I would be hesitant to allow that, Kamel said.
Telecom Egypt has said it would be interested in buying Orascom Telecom s LinkDotNet operations, and according to media reports is also interested in purchasing Link Egypt.
I have told the CEO of Telecom Egypt and the chairman this a couple of days ago, Kamel explained, adding: I would like LinkDotNet to be purchased by the private sector.
He declined to say who would be a potential buyer but said he was witnessing with interest the convergence between ISP (internet service providers) and mobile operations and we encourage that more and more .
Orascom has said it may sell the two units to Mobinil, Egypt s largest mobile operator by subscribers, in which it owns a stake.
LinkDotNet sells internet services in the Middle East region and Link Egypt sells offshore software development services, according to its website.
State-owned Telecom Egypt enjoys a fixed-line monopoly in the most populous Arab country although it faces significant challenges from three mobile phone operators: Mobinil, Vodafone Egypt and Etisalat.
Plans to invite bids for two licenses for triple-play cable, telephone and internet services, announced last month, could open the way to break that monopoly.
This is an opening up of competition in value added services, Kamel said. Telecom Egypt will continue to have its own role…it can work with new players and do bundled packages.
Egypt s telecom regulator said a year ago it had decided to postpone an already-delayed auction for a second fixed-line license for a year, citing global market woes.
Kamel said it was difficult to say for how long it will be postponed, citing mixed feedback from potential bidders.
Asked if a drawn-out dispute between Mobinil s main shareholders, Orascom Telecom and France Telecom, could be keeping international companies from investing in Egypt, Kamel replied: I hope not.
This successful partnership is suddenly facing a commercial dispute between shareholders, Kamel said. The government is not and will never be part of that dispute.
Kamel said he had personally invited both shareholders several times to come together and negotiate but, while they have tried, the efforts were not successful.
The two heavyweights, who together own a controlling stake in Mobinil, have gone through years of arbitration resulting in a ruling that Orascom should sell its 28.75 percent stake in their joint holding company to France Telecom for LE 273 ($49).
OT and Egypt s regulator have said this decision compels FT to make a similar offer for the remaining shares at an equivalent price, which FT disputes. OT also has a 20 percent direct stake in Mobinil.
Asked if he saw room for more mobile operators, Kamel said: For the time being three mobile operators in Egypt are enough but I don t rule out more growth in future.
However, Kamel added, you have to ask what would a fourth or fifth operator add?
