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MobiNil defers 3G licence application

CAIRO — Egyptian mobile phone service operator MobiNil said yesterday it would defer making a decision on whether to apply for a licence for higher-bandwidth 3G technology for a year because conditions were ‘unattractive‘.

‘At this point the board has elected not to pursue such an endeavour,‘ Chief Executive Alex Shalaby told analysts in a conference call to discuss the firm’s first-half results.

‘The conditions that are currently on the table are extremely unattractive,‘ he added. ‘It is just a very, very difficult equation to make.‘

But he said MobiNil, which is majority-owned by regional operator Orascom Telecom , would reconsider its decision in 12 months.

Egypt’s two existing mobile operators — MobiNil and Vodafone Egypt — would have to pay approximately $580 million for 3G licences because the price for the licence is linked to the unexpectedly high winning bid for the country’s third mobile phone operator.

The third mobile licence was sold at auction this month to Etisalat of the United Arab Emirates for 16.7 billion pounds ($2.9 billion).

The resulting price that the existing operators would have to pay for 3G prompted Egyptian investment bank EFG-Hermes to lower its long-term fair value share price estimates for the two companies to 202.30 pounds for MobiNil and 110.40 pounds for Vodafone.

Shares in MobiNil, which reported first-half net income of 657 million pounds on Thursday, closed trading on Monday at 140.98 pounds.

MobiNil rival Vodafone has said it is evaluating whether to acquire a 3G licence, and was discussing the terms with Egyptian regulators.