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CORRECTED-UPDATE 2-Vodafone Egypt to pay half of 4G licence in dollars
October 17, 2016 / 9:31 AM / 9 months ago

CORRECTED-UPDATE 2-Vodafone Egypt to pay half of 4G licence in dollars

3 Min Read

(Corrects day in paragraph 1 to Monday)

By Ehab Farouk

CAIRO, Oct 17 (Reuters) - Vodafone Egypt will pay half of the fee for its 4G mobile broadband operating licence in dollars, a company official told Reuters on Monday.

Egypt's telecom regulator said in August that companies interested in acquiring a 4G licence would be required to pay 50 percent of the fees in U.S dollars, a demand which was resisted by the telecom companies.

Egypt needs hard currency after burning through its foreign exchange reserves and some multinational companies have struggled to repatriate dollars amid the currency shortage.

Vodafone Egypt agreed on Sunday to pay $335 million for the licence as part of the country's long-delayed plan to reform the telecoms sector.

The company did not disclose at the time whether they had reached agreement over the dollar payment, but said new terms that eased their ability to buy additional radio operating frequencies for the 4G network had sweetened the deal.

"We paid 1.5 billion Egyptian pounds of the licence value on October 15 and we will pay the remaining fee within the coming days in coordination with our parent company," the official, who declined to be identified, said.

Egypt is selling four 4G licences as part of a long-awaited plan to reform the telecoms sector and raise much-needed dollars for depleted government coffers.

Its three existing mobile network operators - Orange , Vodafone and Etisalat - had initially all turned down the 4G licences saying the amount of radio spectrum on offer was inadequate.

Etisalat also signed licensing agreements on Sunday, having agreed to pay $535.5 million, and plans to purchase 10 megahertz (MHz) of additional spectrum after the deal.

Etisalat said on Monday it had yet to pay for the licence and that it was considering a capital increase, a loan and other means of funding it.

Orange signed a deal last week, agreeing to pay $484 million after the regulator amended conditions for buying additional spectrum.

The regulator said previously that it would consider running an international auction for the remaining 4G licences if the country's existing mobile carriers refused to do a deal.

Telecom Egypt, the state's fixed-line monopoly, was the only company to take up the state's original offer, buying a 4G licence in August for 7.08 billion Egyptian pounds to give it direct access to the mobile market.

Companies had initially objected to the requirement that half the licence fee be paid in dollars but Orange agreed last week to do so.

The regulator also announced last week that operators that paid for a licence entirely in U.S. dollars would be given priority in buying additional spectrum.

$1 = 8.8799 Egyptian pounds Writing by Eric Knecht, Ola Noureldin, and Ahmed Aboulenein; Editing by Louise Heavens

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