Telecom Egypt board to replace chairman and CEO

Egypt's prime minister named new government representatives to the board of Telecom Egypt. (File photo: Reuters)

Egypt's prime minister named new government representatives to the board of Telecom Egypt , his office said on Wednesday, with the state-owned landline monopoly facing challenges in expanding into the lucrative mobile sector.

A government statement said the new board would meet later on Wednesday to choose a new chairman and chief executive officer for the company, in which the Cairo government owns an 80 percent stake.

The reason for the removal of Mohamed Elnawawy, who became CEO about three years ago, was not immediately clear.

But it raised questions about the future of a unified license that would allow Telecom Egypt to enter the mobile sector against Vodafone Egypt, Etisalat and Mobinil.

Elnawawy told Reuters earlier this year that the company was eager to acquire the new license. “We know mobile is the only way forward,” he said in March.

Yet the shake-up has stirred speculation about whether the new management will change course or pursue the unified license, said Allen Sandeep, head of research at NAEEM Brokerage.

“The current management still seems interested in going forward with the mobile license. With the new management in place we'll have to wait and watch whether this would remain intact,” he told Reuters.

Telecom Egypt, which has a 45 percent stake in Vodafone Egypt, agreed last year to pay 2.5 billion Egyptian pounds ($327.65 million) for the unified licence.

But while the government approved the license last year, its activation has been repeatedly delayed byreported discord among the four companies and within the government over its details.

Earlier on Wednesday, Telecom Egypt said it was considering buying treasury stocks after the company's share price plunged below nominal value.

Shares rose by more than four percent on Wednesday before the bourse halted their trading, awaiting the new board's formation.

Last Update: 06:46 KSA 09:46 - GMT 06:46