Orange Egypt acquires 4G licence for $484 million

Orange Egypt has signed a deal with Egypt’s telecoms regulator on Thursday worth $484 million to start operating fourth-generation mobile phone services after the government agreed to offer it additional spectrum.

Egyptian Minister of Communications, Yasser El-Kady attended the signing ceremony between Orange Egypt and the National Telecom Regulatory Authority (NTRA) where officials from both sides were present.

Orange would pay half the licence fee in Egyptian pounds. The French company has also acquired a licence to offer fixed line services for a further $11 million, an official from NTRA said.

Egypt is selling four 4G licences as part of a long-awaited plan to reform the telecoms sector and to raise money for stretched government finances.

The country’s three existing mobile phone operators – Orange, Vodafone and Etisalat – initially all turned down the 4G licences saying the amount of spectrum on offer was not sufficient to allow them to offer the service efficiently.

The regulator then announced that operators which paid for the licence entirely in dollars would be given priority in buying additional spectrum. U.S. dollars are scarce in Egypt due to a long-running economic crisis.

Orange Egypt, a subsidiary of French telecoms group Orange, said earlier on Thursday it wished to “renegotiate acquisition of a 4G license in light of new terms.”

NTRA said the company had until October 23 to submit a formal offer but the chief executive of Orange Egypt signed a $484 mln deal on Thursday, receiving 10 megaherz of spectrum instead of the 7.5 offered initially.

Telecom Egypt, the state’s fixed-line monopoly, was the only company to take up the original offer, buying a 4G license in August for 7.08 billion Egyptian pounds ($797 million) to enter the mobile market directly for the first time. The company later offered to buy additional spectrum not acquired by other operators.

The regulator said it would reconvene on October 23 to discuss additional options for rolling out 4G services that include holding an international auction for the remaining licences and selling additional frequency to Telecom Egypt.

Kuwait’s Zain, China Telecom, Saudi Telecom and Lebara KSA have all expressed interest in acquiring Egyptian 4G licences if the established companies bow out.