4th Jul 2006 16:12
Telecom Egypt S.A.E04 July 2006 Telecom Egypt's Consortium Not Awarded the Third Mobile License in Egypt Cairo, 4 July 2006: Telecom Egypt (TE) (Ticker: ETEL.CA; TEEG.LN) announcedtoday that its consortium was not awarded the third mobile license in Egypt. Telecom Egypt announced in May that it had formed a consortium with TelecomItalia, with TE as the majority owner, to participate in the tender. The twocompanies worked closely in preparing a joint technical and financial proposal. After a competitive financial auction consisting of nine consortia, the NationalTelecommunications Regulatory Authority (NTRA) in Egypt awarded the license toEtisalat's consortium. The license, which has a term of 15 years, was acquiredfor a fee of LE 16.7 billion in addition to an annual royalty fee of 6% of grossrevenue. The minimum bidding value was originally set by the NTRA at LE 2.5 billion inaddition to an annual royalty fee based at 3 per cent of gross revenue, butwhich rises by 0.2 per cent for each LE100 million increase in the bid value upto a cap of 6%. Commenting on the auction, Chairman of Telecom Egypt, Akil Beshir, said: "While we are disappointed not to have won the auction, I am confident that ourdecision to be firm on price is in the best interests of our shareholders. Themobile market is growing strongly, but entry into that market has to make goodfinancial sense, especially given our existing investment in Vodafone Egypt,which is already achieving strong financial results for TE. "Furthermore, I would also like to stress that while our commitment todeveloping the Egyptian telecommunications market is unwavering, mobile is notour only option for growth. Good progress has also been made towards ourstrategy to look both within and outside of Egypt for future growth prospects.Our regional expansion strategy has already taken its first small steps withmoves into Algeria and Jordan and we will continue to rigorously explore otheropportunities as they arise. "In addition, Telecom Egypt has the resources to develop rapidly the range ofhigh bandwidth data products required more and more by developing serviceindustries in Egypt. Through our existing customer relationships and ourinternet subsidiary TE Data, which is performing exceptionally well and isalready one of the leading access providers in a highly competitive market,Telecom Egypt will increasingly provide tailored full service solutions forcompanies and individuals in Egypt. With that said, Internet penetration remainsin single digits, and our progress to date is just the tip of the iceberg. "Telecom Egypt currently participates in the growing mobile segment in Egyptthrough its strategic 25.5% shareholding stake in Vodafone Egypt (VE), one ofthe two Egyptian mobile operators. We see ourselves as the natural partner toVodafone Egypt following the recent announcements by Vodafone of its intentionto develop convergent offers to Global and Local customers. We already providethe fixed line infrastructure to the entire VE network and, subject to allnormal regulatory restrictions, both companies can successfully build on thecooperation already established." - Ends - For further information: Telecom Egypt - Investor Relations Contacts Tarek Tantawy, CFADirector of Investment, Treasury & Investor RelationsTelephone: +202 5788111Fax: +202 5789314 Eman AnisAssistant Manager; Investor RelationsTelephone: +202 5788787Fax: +202 5789314E-mail: [email protected] Notes to Editors: About Telecom Egypt Telecom Egypt (TE), Egypt's incumbent telecommunications operator, started itsoperations in 1854 with the first telegraph line in Egypt. Then it wascorporatized in 1998 to replace the former Arab Republic of Egypt NationalTelecommunication Organization (ARENTO). The Company is the largest provider offixed-line services in the Middle East and Africa with more than 10.5 millionsubscribers as at the end of March 2006 representing a teledensity of 14.7percent. TE provides retail telecommunication services including access, local, longdistance and international voice, Internet and data, and other services. Thecompany also provides wholesale services including bandwidth capacity leasing toISPs, and national and international interconnection services. Telecom Egypt'sservices also include the provision of narrowband and broadband internet accessthrough its subsidiary TE Data. TE Data has current operations in Egypt, Jordan,and Dubai and has ambitious plans in other parts of the MENA region. Telecom Egypt's shares and GDRs (Ticker: ETEL.CA; TEEG.LN) are traded on theCairo and Alexandria Stock Exchanges and the London Stock Exchange. About Telecom Italia Group The Telecom Italia Group is one of Europe's telecommunications industry leaders.Group activities span the entire advanced communications services chainincluding fixed and mobile telephony, internet, media and innovative businesssolutions and systems through TIM, Telecom Italia Media and Olivetti. TIM, themobile telephony unit, has long been a lead technological innovator in Italy andworldwide. TIM has brought to market third generation technologies, theEDGE-UMTS platform, new high-speed multimedia services and wireless and Internetdata transmission. The Group also promotes research and innovation through thelaboratories of Telecom Italia lab, which develop technologies that improve andenhance the competitiveness of the services the Group provides. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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