Egypt sells 9.5% stake of Telecom Egypt

The Egyptian government has sold a 9.5% stake in state-controlled Telecom Egypt for 3.75 billion Egyptian pounds (US$121.6 million).

The North African country's Ministry of Finance (MoF) said in a statement that the deal to sell 162.2 million shares was executed through the Egyptian Stock Exchange, with each share priced at 23.11 Egyptian pounds ($0.75).

Furthermore, the telco said in a separate filing that the government is also offering another 0.5% stake in the firm to Telecom Egypt employees.

The MoF said the sale formed part of its efforts to expand the ownership base of state-owned companies, with a view to maximize the contributions of the private sector in the country's economic activities.

Egypt purging assets

According to local media, the government announced an overarching economic reform agenda that includes partially selling shareholding either through initial public offerings or through private placements in 32 companies.

The state-linked companies include an undisclosed number of companies run by the Egyptian military.

The Telecom Egypt sale is the second sale of state assets since Prime Minister Mostafa Madbouly announced plans on April 29 to continue with the program of selling assets worth $2 billion by the end of June.

The Egyptian government is also offering another 0.5% stake in the firm to Telecom Egypt employees. (Source: www.slon.pics on Freepik)

Egypt promised the International Monetary Fund (IMF) would roll back the state's involvement in the economy and allow private companies a much greater role when it signed a $3 billion, 46-month financial support package in December 2022.

Egypt mobile mix

It will be interesting to see what happens to the medium-term loan of $167 million that Telecom Egypt received in March 2022 from the European Investment Bank (EIB), to expand its 4G network.

Furthermore, it is worth asking how the government's selling of assets will impact the uptick of Egyptian telcos working toward expanding their networks in the North African country.

In February 2022, Orange Egypt was allocated more spectrum by the country's National Telecommunications Regulatory Authority (NTRA), to be used for both 4G and 5G deployments.

In March 2023, telecom operator Etisalat Egypt signed a funding agreement with Commercial International Bank (CIB) worth 4 billion Egyptian pounds ($129 million).

Market research company Omdia, a sister company of Connecting Africa, estimates that in the first quarter of 2023, the telco had about 11.8% share of the Egyptian mobile market and about 13 million subscribers.

Telecom Egypt owns a 45% stake in Vodafone Egypt, the country's biggest mobile operator with almost 40% market share and an estimated 45 million subscribers around the same period.

Orange Egypt has about 25% market share with 28 million subscribers. Etisalat follows it with a 22% market share and about 25 million estimated subscribers.

South Africa-headquartered Vodacom Group completed its long-awaited purchase of a 55% stake in Vodafone Egypt in December 2022.

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*Top image source: Telecom Egypt investor relations website.

— Matshepo Sehloho, Associate Editor, Connecting Africa