Egypt’s second mobile operator Vodafone Egypt finally listed on the local bourse on Sunday, following a series of last minute postponements and hiccups. In a convoluted deal, the country’s PTO Telecom Egypt (TE) has acquired a 25.5% stake in Vodafone Egypt and agreed to form a new consortium with the Vodafone Group, Vodafone Egypt’s majority shareholder. The new arrangement will see the UK giant, which prior to the deal held 67% of the cellco, selling 16.9% of Vodafone Egypt to TE. On top of this Vodafone Egypt’s minority shareholders have also agreed to sell a further 8.6% to the national fixed line operator. The two principal shareholders in Vodafone Egypt now plan to form a 50:50 joint venture called Wataniya Consortium, which will hold 51% of the cellco – giving it management rights. Such a set-up will enable TE and Vodafone Group to have rights in the mobile operator, through Wataniya, although the UK-based company will retain overall control by dint of the 25.5% it holds outside of Wataniya.
The complex deal also included a provision under which Vodafone Egypt, its rival MobiNil and the National Telecommunications Regulatory Authority (NTRA) agreed to license new spectrum in the 1800MHz band to TE, in return for which the telco will sell back its existing licence to NTRA. It is believed that the deal will give Vodafone a competitive advantage over its rivals by virtue of the fact that TE controls all fixed line telephony services in Egypt and therefore has access to a huge customer base.