Telecom considers mobile options

27 May 2003

Telecom Egypt claims it is mulling a number of possibilities regarding its participation in the Egyptian mobile communications sector. The company, which has a monopoly in the fixed line market until 2005, was permitted by law to enter the cellular market last November when the duopoly shared by MobilNil and Vodafone Egypt expired. However, earlier this month Telecom said the steep depreciation of the Egyptian pound against the main foreign currencies had made the construction of a new network unfeasible for the time being. Other options being considered by the telco are whether to purchase a stake in one of the two existing operators, or whether to lease capacity and act as a mobile virtual network operator (MVNO). Last week it said it was in talks with the two existing operators about delaying construction of its network until 2007 in return for CDF1 billion (approximately USD165 million) worth of compensation. Talks between the three companies are expected to conclude within two weeks.