Mobinil buys $599mn 3G licence

Egyptian mobile operator granted a high-speed, third-generation mobile licence.

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By  Reuters Published  July 18, 2007

Egyptian mobile operator Mobinil has been granted a high-speed, third-generation mobile licence for 3.4 billion Egyptian pounds ($599 million), the Communications Ministry said on Wednesday.

The ministry said in a statement the firm would be able to pay the fees in instalments, as did rival Vodafone Egypt, which acquired a licence in January for 3.34 billion pounds.

Mobinil said last week it was applying for the 3G license after months of hesitation. Market growth appears to have driven the move after the company said in April it did not want to burden investors with the high costs of a 3G service.

Chief Executive Alex Shalaby said in June his firm had witnessed strong growth in the previous six months and would outgrow its allocated 2G spectrum sooner than was previously expected.

Etisalat of the United Arab Emirates entered the market in May as the newest competitor, also with a 3G licence, putting pressure on Mobinil to act.

The Communications Ministry also said it had agreed to sell the mobile operators licenses for direct long-distance calling. Mobile phone companies currently must route international calls through Telecom Egypt

Minister Tarek Kamel told Reuters in March the government had estimated it could raise some $500 million to $600 million over the next two to three years from selling such licenses.

Telecom Egypt will also lose its monopoly as the sole fixed-line operator in 2008, when the government plans to offer another license for sale.

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