Back to the complete issue
Thursday, 1 September 2016

TE signs 4G agreement, to begin providing mobile services within six months

Telecom Egypt (TE) is Egypt’s first 4G operator: State-run fixed-line monopoly Telecom Egypt is now in the mobile network operator business. TE inked an agreement yesterday with the National Telecommunications Regulatory Authority (NTRA) allowing it to provide 4G mobile network services, according to a company statement (Al Borsa has photos from the signing ceremony). The licence cost to TE stands at EGP 7.08 bn, of which EGP 5.2 bn is paid in advance, with the balance due in equal installments over the next four years. Half of the total license cost will be paid in USD. The license is for 15 years, renewable for five more at a cost of EGP 2 bn. TE is due to begin providing mobile services within six months.

CEO Tamer Gadalla said TE is also set to sign agreements with local MNOs to use their existing 2G and 3G network infrastructure until it completes its own 4G network, according to Al Mal. Acting NTRA executive director Moustafa Abdel Wahed told Al Mal TE has two months to reach an agreement with the MNOs, without mentioning the potential repercussions would be for the MNOs or Vodafone if no agreement is reached.

Does TE get to keep its 45% stake in Vodafone Egypt? So far, yes. Both Abdel Wahed and Gadalla have said that TE will not be required to dump the stake, though speculation in the press is that threatening to require a full or partial exit could be enough to force TE to come to terms with its rivals on infrastructure sharing. Other operators have for some time demanded that TE divest its stake in VFE.

Where the money is coming from? TE is financing its agreement with NTRA through an EGP 5 bn facility extended by a syndicate led by National Bank of Egypt and QNB Al Ahli, Gadalla told Al Mal.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.