Telecom Egypt and Telecom Italia to join force to operate Egypt 3G network

May 7, 2006

Telecom Egypt (TE) is expected to join hands with Telecom Italia to bid for a license to operate Egyp's third-generation (3G) mobile network, state media reported on Thursday.

TE has reached an agreement with Telecom Italia to work together to tender for the third Egyptian mobile phone license, a TE official was quoted by the official MENA news agency as saying.

According to the agreement, a new firm would be set up, with majority stake owned by TE, if the two companies succeeded in winning the bid, said the official.

He said that TE is a major player in Egyptian telecommunications market while Telecom Italia has expertise and experience in 3G services in international market. The partnership was a natural outcome of previous agreements and cooperation between the two companies, the official added. Telecom Italia reached a deal with TE in 2004 that enabled the Egyptian company to offer Internet protocol services to its clients.

A total of 21 companies, which formed 10 major alliances, have applied to bid for the 3G license by the Thursday's deadline, according to Amr Badawi, Chairman of the National Communications Organizing Authority, the watchdog of the Egyptian telecom market. The offer is expected to hit 50 billion Egyptian pounds (8.71 billion U.S. dollars), Badawi was quoted by Egyptian Gazette assaying.

The third telecom company is likely to be in operation six months after winning the bid, he added.

The Egyptian mobile phone service is currently dominated by two companies -- MobiNil, a joint venture set up by Egypt's Orascom Telecom Holding and France Telecom, and the U.K.-based Vodafone Group.