Vodafone negotiating Egypt 3G licence

7 Dec 2006

Vodafone Egypt is in negotiations with the Egyptian government over the possible purchase of a 3G operating licence, Chief Executive Ian Gray told investors and analysts at a meeting this week. Gray said that whilst buying a UMTS licence would be more expensive than first thought, it would give Vodafone’s business a significant boost in the country. ‘There are already more than 600,000 3G [capable] phones being used by customers on our network and a lot of these are high value customers,’ he said. ‘The argument against doing 3G in Egypt is quite straightforward – it’s a lot of money, but we need more capacity if we are going to grow the business.’

According to TeleGeography’s GlobalComms database, Egypt’s National Telecommunications Regulatory Authority (NTRA) has previously stated that the cost of a standard 3G licence for any other operator wishing to upgrade their 2G concession would be equal to 20% of the winning bid for the country’s third mobile licence. The concession – which covered both 2G and 3G spectrum – was won by Etisalat of the UAE in July 2006 with a winning bid reportedly worth EGP16.7 billion (USD2.9 billion), almost eight times the auction starting price, putting the cost of a 3G licence upgrade at around USD578 million. On top of licence fees, operators are also required to pay annual royalties to the state.

Egypt, Vodafone Egypt