CAIRO: Egyptian mobile firm Orascom Telecom would consider a bid for Vodafone’s 55-percent stake in its Egyptian unit if it were put up for sale, Orascom’s executive chairman said.
Egypt’s fixed-line monopoly Telecom Egypt, 80 percent owned by the government, said last week it was considering boosting its 45 percent stake in Vodafone Egypt, the country’s second mobile operator by subscribers.
Vodafone has not commented on its intentions. Sources said Telecom Egypt had held informal talks with Vodafone on a possible deal but said no agreement was imminent.
Analysts say Vodafone may be suffering from saturated and highly competitive European markets and high costs and slowing growth in some of its emerging markets such as India. Some of the analysts suggest it should look at non-core disposals.
"We will compete strongly for the deal to buy Vodafone, should it be seriously offered, to acquire a controlling stake in mobile services in Egypt," Orascom’s Naguib Sawiris told the business daily Al-Mal in remarks published on Thursday.
Orascom is a major shareholder in Egypt’s biggest mobile firm by subscribers Mobinil. The other main shareholder is France Telecom. Orascom’s other businesses extend from Canada to Algeria to North Korea.
An Orascom official confirmed the chairman’s comments, saying: "If Vodafone is serious about selling the Egyptian operation, he is sure there would be a bid … All he said was, yes, we would certainly consider it."
Egyptian Communications Minister Tarek Kamel said on Monday a final decision had not been made about whether Telecom Egypt would try to boost its stake in the Vodafone unit.
Orascom is locked in a row with the Algerian government over taxes related to its Algerian unit, Djezzy. Algiers has blocked a possible sale of Djezzy to South Africa’s MTN.
"It is far from clear how Orascom Telecom would finance a major acquisition until it solves its problems in Algeria and regains access to Algerian cash flow. We estimate net debt is already 4-5x EBITDA ex Algeria," said Richard Barker of Credit Suisse.
Alongside the networks of Vodafone Egypt and Mobinil, Egypt’s third mobile network is operated by Etisalat of the United Arab Emirates.