Sale of Vodafone Egypt at odds with CEO strategy

Various reports are circulating that indicate that Telecom Egypt is interested in acquiring Vodafone Egypt. Any move by Telecom Egypt to become the majority shareholder in the Vodafone subsidiary would seem to go against a statement made by CEO Vittorio Colao concerning Vodafone's continued interests in Africa.

While analysts have speculated that the sale of Vodafone's 55 per cent holding in Vodafone Egypt could raise over £3 billion, only last week Colao said that Europe, sub-Saharan Africa and India were the three priority areas for the company, and that it would focus its investments on those regions.

Telecom Egypt, the only provider of fixed-line services in the country, said in March it wanted to increase its exposure to the mobile market. CEO, Tarek Tantawy, has stated that the company would consider acquiring an integrated telecoms company, and could also enter the bidding for a fourth mobile licence in Egypt if it came to the market.

However, the Egyptian mobile market has become fiercely price competitive with reducing margins, while mobile penetration has now approached 75 per cent.

The existing largest player in the Egyptian market is Mobnil--now jointly owned by Orascom Telecom and France Telecom--with Vodafone Egypt a close second and Etisalat Egypt, a unit of UAE-based Etisalat, the third-largest operator.

For more on this story:
- read Bloomberg & Total Telecom

Related stories:
Pressure mounts on Vodafone to revamp business structure
France Telecom looks to Africa for more growth
Rumour Mill: Will Vodafone sell off its SFR holding?
Egypt's ban on mobile VoIP makes Skype mad

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