Egypt May Offer 4G License in International Tender

(Bloomberg) -- Egypt may offer 4G mobile-phone licenses to international telecommunications companies, the head of the nation’s telecom regulator said Thursday, after the three local operators rejected the government’s terms.

The National Telecom Regulatory Authority will present to its board options for offering the new licenses on Oct. 10, Executive President Mustafa Abdul Wahid said by phone, confirming that all three local operators had rejected the licenses. Earlier, Arabiya TV cited Telecommunications Minister Yasser El Qady as saying the new licenses would be offered under terms different from those presented to domestic operators. El Qady said 4G service would go ahead as planned, and would be offered by Telecom Egypt, according to the report.

The rejection marked the second time a deadline for the offer had passed with Vodafone Egypt Telecommunications SAE, Orange Egypt and Etisalat Misr declining to secure the next-generation license. Only Telecom Egypt, the state-run fixed-line monopoly, has a 4G license, which it acquired for 7.08 billion Egyptian pounds ($800 million).

Orange’s main objection was the quantity of spectrum offered by the government, which “would not allow us to offer 4G service up to international" or the company’s standards, Ayman Essam, the operator’s senior director for legal and corporate affairs, said by phone. “You can’t offer any service and claim it’s 4G service."

The license terms didn’t offer enough spectrum for efficient operation, or allow consumers to experience significant increase in speed, Vodafone Egypt said in an e-mailed statement. The company would be interested in a license if the terms were revised, it said.

Abdul Wahid rejected the companies’ claims about insufficient spectrum being made available, saying "of course it will not be enough for the 90 million users, but it’s sufficient" as a starting point. The same terms "are void" and won’t be offered again, the telecom authority said in an e-mailed statement.

The operators’ refusal may lead to a stand-off with the government similar to the one in 2014, when it attempted to hand a mobile license to Telecom Egypt but backtracked as carriers threatened international arbitration over what they said were unfair rules.

An Egyptian telecommunications ministry official said in July that the country had already received expressions of interest by international operators, including China Telecom Corp. and Saudi Telecom Co., as well as Kuwait’s Zain.

To contact the reporters on this story: Tarek El-Tablawy in Cairo at teltablawy@bloomberg.net, Ahmed Feteha in Cairo at afeteha@bloomberg.net. To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Phil Serafino, Ville Heiskanen