Fourth mobile licence unlikely in short term

24 May 2011

A fourth mobile concession in Egypt appears less likely following reports that the government may hold off on licensing a new player in the wake of the country’s political upheaval. According to Bloomberg, Egyptian communications minister Magued Osman noted: ‘There are a lot of changes in Egypt now and we are not sure whether launching a new licence at this moment is the right decision from the economic point of view.’ Such a decision, it is suggested, could prompt the country’s fixed line incumbent, Telecom Egypt (TE), to reconsider bidding for an increased holding in local cellco Vodafone Egypt, in which it already has a 45% stake. As previously reported by CommsUpdate, in June 2010 UK-based mobile giant Vodafone Group reportedly ended negotiations over a possible divestment of its interest in the mobile operator, just a few weeks after it first emerged that it was in talks with TE over the latter’s potential purchase of the 55% stake. TE had reportedly approached the British company in April 2010 to sound out the possibility of a deal, which had been valued at between GBP3 billion and GBP4 billion (USD4.5 billion-USD6.5 billion).

In addition to the consideration being given to the potential introduction of a new wireless player, the government is also understood to be examining laws related to the disconnection of internet and mobile phone services, after the previous authorities forced services offline and instructed operators to send messages on its behalf during the recent uprising. Calling the disconnection ‘a decision that [has] negatively reflected on all citizens in Egypt’, Osman revealed that the state was revising legislation to make clear who would be responsible for such a decision, adding: ‘We would like to be more specific in terms of identifying who should be in charge to take that decision if needed.’ A draft of the revised laws is expected within the next three weeks.