Telecom Egypt's mobile strategy in doubt after leadership changes

Telecom Egypt's board raised questions about the state-run operator's future mobile strategy this week, when it appointed a new chairman and CEO.

According to Reuters, the board--which in turn includes new government representatives appointed this week by the prime minister--selected Osama Yasin as the new CEO, replacing Mohamed Elnawawy. Former telecoms minister Mohamed Salem was appointed chairman.

The reasons for Elnawawy's removal have not been disclosed, Reuters said. It's also not clear if the new management will pursue a unified fixed and mobile licence or change direction on the operator's mobile strategy, the news agency added.

The incumbent operator agreed in May 2014 to pay EGP2.5 billion (€298 million/$327 million) for a unified licence, which would have allowed it to enter the mobile market for the first time.

Reuters noted that the former CEO said earlier this year that Telecom Egypt was keen to buy the new licence.

"The current management still seems interested in going forward with the mobile licence. With the new management in place we'll have to wait and watch whether this would remain intact," Allen Sandeep, head of research at NAEEM Brokerage, told Reuters.

The Egyptian government approved the unified licences last year, but the activation of the licences has repeatedly been delayed. Such a licence would also allow the nation's three mobile operators--Vodafone Egypt, Etisalat and Orange's Mobinil--to sell fixed-line services.

Telecom Egypt also still owns a 45 per cent stake in Vodafone Egypt. As things stand, the state-owned operator is due to sell this stake by the end of 2015.

Mobinil has previously expressed uncertainty about the unified licences, warning that it might opt out of the landline option unless it was permitted to build its own fixed networks.

Orange increased its stake in Mobinil to 99 per cent in February this year, describing the Egyptian market as one of its most important assets in the Middle East and Africa (MEA) region and its largest market in terms of customers.

For more:
- see this Reuters article

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