Vodafone mulling Egyptian buyout?

24 Oct 2013

Fixed line incumbent Telecom Egypt’s share price has increased after suggestions that UK-based Vodafone Group had expressed an interest in buying out the former’s holding in their joint venture, mobile network operator Vodafone Egypt. According to Bloomberg, an unnamed official at the British mobile giant was said to have claimed that Vodafone Group is prepared to acquire the 45% stake in the JV held by Telecom Egypt, in a move which could end the conflict of interest which has arisen after the government’s decision to issue the fixed line incumbent with an integrated license, under which it is expected to enter the wireless market as a virtual operator. Nonetheless, a formal offer for the stake has yet to be received by Telecom Egypt, one of the telco’s officials confirmed, though no further comment on the matter was forthcoming.

As noted in TeleGeography’s GlobalComms Database, Vodafone Egypt is currently owned by Vodafone Group (54.9%) and Telecom Egypt (44.95%), with the remaining 0.15% in free float. In January 2013 the fixed line operator said it was awaiting word from the National Telecommunications Regulatory Authority (NTRA) as to whether it would be forced to divest its holding in light of the revelation that the state was planning to grant the telco permission to enter the wireless sector. At that date the telco’s investor relations manager was cited as saying: ‘We are waiting for a decision by the regulator on whether we will be forced to divest from Vodafone Egypt or just leave our seats on the board of directors.’ Subsequently, in September 2013 TE said it was not planning to sell its holding, having refuted claims it had done just that a month earlier. Further, TE stated that it aimed to retain its stake in the cellco, barring a request to sell from the country’s competition watchdog.

Egypt, Telecom Egypt, Vodafone Egypt, Vodafone Group