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Sun 5 Mar 2006 04:00 AM

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18 interested parties buy tender documents in Egypt

The deadline for interested parties to submit their proposals and pay a US$4.4 million bond guarantee has been set for April 17.

Egypt’s National Telecommunication Regulatory Authority (NTRA) has said that by March 2, 18 companies had applied to receive a copy of the specifications handbook, having issued the request for proposals (RFP) regarding the award of the country’s third GSM licence on February 19. Each copy of the handbook costs US$25,000.

The deadline for interested parties to submit their proposals and pay a US$4.4 million bond guarantee has been set for April 17. To qualify for the third license, foreign bidders will have to partner with an Egyptian entity.

The UAE’s Etisalat, MTC of Kuwait and South Africa’s MTN have already confirmed their plans to participate in the process. Etisalat has signed a partnership agreement with Mashreq Telecom (a new Egyptian company owned by Gamal El-Sadat), the National Bank of Egypt and EFG-Hermes Holdings, which will act as financial advisors for the group.

MTN has partnered with Raya Holding and Golden Pyramids Plaza, with MTN expected to have majority ownership in the consortium with a 50 or 51% stake. Raya will own 20% and the remainder will be held by GPP. Kuwait’s MTC is yet to announce a local Egyptian partner.

Despite previous comments that incumbent fixed line operator Telecom Egypt would not be allowed to participate in the award of the third licence, it now appears that the telco has been given tacit authority to move forward with a bid. The telco has expressed interest in entering into a consortium with an international operator and is reported to have not yet decided whether it will keep or sell its 25.5% stake in Vodafone Egypt, should it join in the bidding.

Telecom Egypt has a put option that requires Vodafone Group to purchase its stake in Vodafone Egypt at market prices if Telecom Egypt opts to sell.

The bidding process will be an open auction format. Qualified bidders will sit around a table and bid face-to-face, with the licence ultimately going to the highest bidder. A minimum licence fee of EGP2.5 billion (US$438 million) and 3% of revenue is reported to have been set as the minimum fee.

The winning company will be awarded 1800 MHz frequency, but will be able to take advantage of national roaming and number portability to gain access to the 900MHz networks of the two incumbents.

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