The Egyptian government is considering selling an additional 10-15% stake in Telecom Egypt after offloading 9.5% in May 2023 worth $121.6 million.
The previous sale on the Egyptian Stock Exchange involved 162.2 million shares at 23.11 Egyptian pounds each, reducing the state’s ownership to 70%. An additional 0.5% was also sold to Telecom Egypt employees.
According to reports, further sales of shares could occur before year-end. It aligns with Egypt’s broader economic reform agenda to partially privatise state assets in 32 companies, including military-run firms.
In signing a $3 billion IMF deal in late 2022, Egypt promised to roll back state control and allow greater private sector roles. How this asset sale impacts telecoms network growth remains to be seen.
For example, in March 2022, Telecom Egypt secured a $167 million loan from the European Investment Bank to expand its 4G network. Its ability to carry out such expansion under further privatisation is now in question.
The share sale also comes as Telecom Egypt prepares to sell its 45% stake in Vodafone Egypt, the country’s largest mobile operator with 46 million subscribers as of Q2 2023.
Telecom Egypt held around 13 million mobile subscribers in the same period, behind rivals Orange Egypt with 28 million and Etisalat with 26 million users.
The South African group Vodacom recently closed its purchase of a 55% interest in Vodafone Egypt, long-awaited since the deal was announced in 2020.
As the Egyptian government continues shedding state assets, the telecom sector faces uncertainties around ownership structures, network investment capabilities and ongoing state involvement in private firms.