Telecom operators will be allowed to pay for 4G licenses in four annual instalments if the USD shortage persists, a corporate source told Al Mal. CIT Minister Yasser El Kady denied the statement to Reuters’ Arabic service, saying companies will be required to pay the fee in full upon signing the contracts. Besides the licensing fee, the companies will have to pay 6% directly to the state coffers, Al Mal’s source added, noting that the three active mobile operators already pay 5-6% of annual revenues to the state as a royalty. The pricing of 4G licenses depends on the number of subscribers each company has as well as the requirements for extra 3G bandwidth. Meanwhile, neither Vodafone nor Orange will be allowed to begin offering services through international gateway licenses for a period of two years after their purchase date, according to a CIT ministry source. Each of the two multinational operators is bidding for a gateway license.

The source also noted that China Telecom is among the contenders for the 4G license, but did not give any further details. Reuters quotes El Kady as saying the 4G licenses will be offered in an international auction if local operators reject the terms, as CIT officials had been saying for the past two weeks or so.

…TE will not have to get rid of Vodafone stake: Telecom Egypt (TE) will not have to sell its 45% stake in Vodafone Egypt if it obtains a 4G licence, two telecommunications sector sources told Reuters. “The telecommunications regulator is not forcing Telecom Egypt in official correspondence over its application to offer 4G services to get rid of its Vodafone stake,” one of the sources explained, with the other saying TE will sell only “when it gets an offer for a good price.” Applications for 4G licences have to be submitted by the first week of August. CEO Tamer Gadallah told Al Mal that TE has already begun negotiations with domestic banks as it will require funding to cover the USD-portion of the licence fee. The talks are still in the preliminary stages, Gadallah said.

Meanwhile, Etisalat Misr thinks the asking price is too expensive, CEO Hazem Metwally told Al Masry Al Youm, particularly as the company is struggling to find FX as roaming revenue dropped with the slump in tourism. Metwally also added that Etisalat Misr has not yet received the complete details of the 4G licence. He added that Etisalat Misr could be next on the IPO bandwagon, saying the company could float part of its shares on the EGX but is waiting for the right time. If we recall correctly, Etisalat Misr — 66% owned by the UAE’s Etisalat — was required to explore an IPO as a condition of the third mobile network operators’ license back in 2006. The company was said almost exactly two years ago to have been exploring a USD 500 mn offering on the EGX.