Telecom Egypt misses deadline for sale of Vodafone stake
11 January 2016 | Alan Burkitt-Gray
Telecom Egypt has missed its end-of-2015 deadline to sell its 45% stake in the local Vodafone operation, which is a condition for the award of a new unified licence.
A unified licence will allow Telecom Egypt – which already has the biggest fixed network in Africa – to offer mobile services in competition with Vodafone, Orange’s Mobilnil and Etisalat. At the same time Vodafone, Mobinil and Etisalat will also be able to offer fixed services.
The Egyptian government has been expected to grant Telecom Egypt a unified licence – which will allow it to offer mobile as well as fixed services – since mid-2014, but that would require it to sell its shares in Vodafone Egypt, which is the market leader.
There’s “no change in the shareholding and nothing to report”, according to Vodafone’s group head office in London.
Telecom Egypt, which is 80% government owned, has been on the point of appointing financial advisers to handle the sale since early 2015. A report in February said the company was considering both JP Morgan Chase and a partnership of Lazard and EFG-Hermes. Bloomberg reported in November 2015 that it was still aiming to divest its stake by the deadline at the end of the year before getting the unified licence.
However the government still hasn’t awarded the fourth licence to Telecom Egypt, said an executive with knowledge of the matter. That award would trigger the disposal of the Vodafone shares and allow Vodafone, Mobinil and Etisalat to compete in the fixed-line market.
However the management of Telecom Egypt has been changed a number of times. In May 2015 the Egyptian government appointed Osama Yasin as CEO and former telecoms minister Mohamed Salem as chairman after its dismissal of previous CEO Mohamed El-Nawawy.
In September Salem resigned as chairman and was replaced by Waleed Gad. Reuters said at the time that Salem’s resignation letter said: “For four months I have done all I can to improve the company’s performance … but I have faced many stumbling blocks and difficulties.” He added that he could not operate in a “combative environment”, added Reuters.
12h | Alan Burkitt-Gray
12h | James Pearce
12h | James Pearce
13h | Alan Burkitt-Gray