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UAE's Etisalat is granted third mobile license in Egypt

By Malak Labib - Kuwait Times

CAIRO: A United Arab Emirates-Egyptian partnership was granted yesterday the third mobile telephone network license in Egypt, officials said.
The offer by United Arab Emirates telecom operator Etisalat, in partnership with the Egyptian Postal Authority, the National Bank of Egypt and the Commercial International Bank (CIB), is worth 16.7 billion Egyptian pounds (2.9 billion dollars), almost eight times the minimum offer, Amr Badawi, an official from the telecommunications ministry, told reporters.
"The contract will be signed next month and the network will be launched in February," Communications Minister Tarek Kamel told reporters after the announcement, adding that Etisalat would control 70 per cent of the consortium and the Egyptian partners 30 per cent.
Two network operators, Vodaphone and Mobinil, currently operate in Egypt. The third network will see the number of mobile phone subscribers go from 15 million to 35 million in the next four or five years, according to Badawi.
The consortium headed by Etisalat will gain 20 to 25 per cent of the market share, he predicted. For his part, Prime Minister Ahmed Nazif said the tight competition between the companies was a "clear message showing international confidence in the Egyptian economy."
Nazif said that the choice was made transparently, with sealed offers opened at the ministry of communication in Egypt's Smart Village, a high-tech city on the outskirts of Cairo.
Revenues from the sale will go to the public treasury, said Nazif, adding that they would "support the state budget and will be invested in development projects."
Mohammed Hassan Omran, chairman of Etisalat, said "The winning partnership is committed to offering high quality service on the highest levels to serve Egyptian clients."
"Etisalat is focused on achieving its expansion goals to become the driving force for change in the region's telecom sector," Omran said in a statement.
The winning bidders will offer GSM and third generation technology, the statement said.
The third mobile network will offer "many benefits to customers ... with improved prices and choices for customers, better coverage in the country and the use of the latest technology available in the world," said Omran adding that the network will provide many job opportunities for Egyptians.
Etisalat was chosen from among nine European, African, Arab, Asian and local companies that had presented bids.
In May, eleven candidates, including EgyptTelecom, Telecom Italia, Kuwait's MTC, Turkcell of Turkey, South Africa's MTN and Russia's MTS all presented bids for the mobile license.
The decision in May 2003 to grant a licence to a third mobile network prompted the two current operators-Vodafone and Mobinil -- to propose a payment of 300 million dollars to EgyptTelecom to stave off the arrival of a competitor until 2007.
But parliament's transport and communications committee opposed the idea, affirming the need to put an end to the existing duopoly.
Rumours of a win by the Etisalat-led consortium sparked a 6.0 per cent rise in shares of CIB yesterday, the official news agency MENA reported.
At the same time, other Egyptian companies who had participated in the offer saw their shares dip between 1.5 to 4.6 per cent.
Etisalat heads a consortium that operates the second mobile telephone network in Saudi Arabia and has shares in several operators in Africa. In 2005, the UAE company saw a 25 per cent increase in net profit to 4.3 billion dirhams (1.17 billion dollars). -AFP



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