Under the mandate, the banks will advise the ministry on the anticipated offering of 20 per cent of TE’s shares. Analysts say the transaction is expected to take place in the first half of 2006. It is not clear whether TE’s shares will be offered on the Cairo & Alexandria Stock Exchange (CASE) only or also on an international bourse.

TE is the largest fixed-line carrier in the Middle East, operating about 9.9 million lines.

Longstanding plans for the privatisation of TE were revived last July after the appointment of a new reformist cabinet, with former communications & IT minister Ahmed Nazif as prime minister. The government in 2001 appointed Merrill Lynchto advise on the possible strategic sale of a stake in the TE, but the offering was later cancelled.

In a separate move aimed at further liberalising the local telecoms sector, the National Telecommunication Regulatory Authority (NTRA) is preparing to tender two licences for international telecommunication services later this year. In addition, NTRA is expected to release request for prequalification (RFQ) documents for the country’s much-anticipated third GSM licence in the fourth quarter.