Telecom Egypt to buy stake in Vodafone Egypt  ( October '5,2003, The Economic Times)

Vodafone Egypt has agreed in principle to sell a portion of its equity to state-owned Telecom Egypt and hopes the deal will be concluded soon, Vodafone Egypt's chief executive was quoted as saying on Sunday.

Al-Alam al-Youm newspaper quoted Vodafone Egypt's Ian Gray as saying "the agreement that has been concluded between the two companies has been...initialled". He added that "he hoped the deal would be completed in the near future".

Gray did not give details of the agreement, but Al-Alam al-Youm on Thursday reported that the firms had agreed in principle on Telecom Egypt buying 16.9 percent of Vodafone Egypt. It did not identify sources for Thursday's report.

The newspaper said its sources had declined to give the value of the deal, adding that the agreement would be presented to cabinet for approval.

Vodafone Egypt officials were not available for comment. Telecom Egypt had no comment on the reports. A Vodafone Group spokesman in Britain was not immediately available for comment.

Vodafone Egypt, 67-percent-owned by Vodafone Group, and the Egyptian Company for Mobile Services (MobiNil) run the only two cellular networks in Egypt, the Arab world's most populous country with 70 million people.

Telecom Egypt, the country's only fixed-line provider, has a licence to set up a third network but has said it has been in talks with MobiNil and Vodafone Egypt about possibly not using its licence to set up the network until November 2007.

Egyptian Minister of State for Communication and Information Ahmed Nazif told Reuters in May that Telecom Egypt had not yet decided whether to enter the market as a third mobile operator.

He said Telecom Egypt might instead buy a stake in either Vodafone Egypt or MobiNil, or lease capacity from them as a "virtual operator".

Telecom Egypt had said in May it was in talks with the two cellular providers about delaying its network launch until 2007 in exchange for one billion Egyptian pounds ($163 million) from each of the firms.