China Telecom, Saudi Telecom show interest to acquire Egypt 4G licence
State-run phone carriers China Telecom Corp. and Saudi Telecom Co. have expressed interest in acquiring 4G mobile-phone licences offered by the Egyptian government, a Communications Ministry official said.
The two carriers join Kuwait’s Zain, which made an official request a week earlier to obtain the Egyptian 4G licence.
China Telecom, that country’s third-largest mobile carrier, and Saudi Telecom, the biggest phone operator in Saudi Arabia, haven’t presented formal requests yet, said the official, who asked not to be named discussing private information. A Saudi Telecom official declined to comment. China Telecom didn’t immediately respond to requests for comment.
Interest in the 4G licences by newcomers in Egypt may add to pressure on local units of mobile operators Vodafone Group Plc, Orange SA and Emirates Telecommunications Corp. to accept licence terms before the deadline set by the government at the first week of August. State-run fixed-line monopoly Telecom Egypt has welcomed the offering as it eyes entering a mobile market.
The licences would only be offered to new market players in case current operators rejected the licence, the official said. Egypt has about 95 million mobile subscribers, according to the communications ministry website.
Orange SA’s Egyptian affiliate said in a June filing that it has been required to decide on whether to agree to terms of a 4G licence by the first week of August. The price of the rights for Orange is 3.54 billion Egyptian pounds ($399 million), the company said.
China Telecom does not have any 4G development plan in Egypt, the company said Tuesday in an e-mail.
For China Telecom, a 4G licence would broaden its revenue stream, said Steven Liu, head of research at China Securities International.
“Overseas revenue mainly comes from roaming and is almost negligible,” said Liu by phone. “If they were to acquire 4G licences, it would be more of the goal to establish a presence than to compete toe-to-toe with European operators,” Liu said by phone on Tuesday.
China Telecom will probably have revenue of 347.5 billion yuan ($52 billion) this year, about 4.9 percent more than a year earlier, according to estimates compiled by Bloomberg.
New Rivals
The 4G licences in Egypt replace an earlier plan that some mobile operators threatened to fight in international arbitration because of concerns that a new competitor would eat into their market share, the telecommunications regulator said at the time. The government has said that operators interested in the licence will have to pay half of its value in U.S dollars at a time when the country faces its worst foreign currency shortage in years.
Source: Bloomberg
