Vodafone Egypt and Etisalat sign multimillion dollar 4G license agreements

Vodafone Egypt and Etisalat Misr, the Egyptian unit of Etisalat signed 4G license agreements with the country’s telecoms regulator for $335 million and $535.5 million respectively late on Saturday, the regulator said in a statement on Sunday.

The companies also signed a fixed-line phone service license worth $11.26 million.

This raises Vodafone Egypt’s overall spectrum to 42.5 MHz, and Etisalat Misr’s to 40 MHz.

The country’s three existing mobile phone operators - Orange, Vodafone and Etisalat - initially all turned down the 4G licenses saying the amount of spectrum on offer was not sufficient to allow them to offer the service efficiently.

The regulator then announced that operators that paid for the license entirely in dollars would be given priority in sales of additional spectrum. US dollars are scarce in Egypt due to a long-running economic crisis.

Orange Egypt, a subsidiary of French telecoms group Orange, on Thursday signed a license deal, paying $484 million and receiving 10 megahertz of spectrum instead of the 7.5 initially on offer.

Telecom Egypt, the state’s fixed-line monopoly, was the only company to take up the original offer, buying a 4G license in August for 7.08 billion Egyptian pounds ($797 million) to enter the mobile market directly for the first time. The company later offered to buy additional spectrum not acquired by other operators.

The regulator said it would reconvene on Oct. 23 to discuss additional options for rolling out 4G services that include holding an international auction for the remaining license and selling additional frequency to Telecom Egypt.

Kuwait’s Zain, China Telecom, Saudi Telecom and Lebara KSA have all expressed interest in acquiring Egyptian 4G licenses if the established companies bow out.

Egypt needs hard currency after burning through its foreign exchange reserves as political turmoil hit foreign investment and tourism since the 2011 popular uprising that ousted former autocrat Hosni Mubarak from power.