It is understood that the qualifying conditions for the tender are stringent. Bidders will be required to have done considerable previous work for major international networks, and they will have to deploy a large amount of equipment in a short space of time to allow the service to achieve maximum coverage as soon as possible.

Companies that have expressed interest in the project are understood to include France's Alcatel, Sweden's Ericsson, China's Huawei Technologies, Lucent Technologiesof the US, Nortelof Canada, and Siemensof Germany. Much of the design work has been carried out by German consultant Detecon.

Telecom Egypt has been in discussions with a number of international operators with a view to taking on a strategic partner for the GSM project. However, industry sources say it appears unlikely that a deal can be concluded before the new service starts. 'They are acting as if the strategic partner would come later on,' says an executive with one of the prospective bidders for the equipment supply contract. 'This means that the supplier could well be required to bring financing and a high level of technical support.'

Telecom Egypt will be required to pay a £E 1,975 million ($428 million) licence fee to the Telecommunications Regulatory Authority before the new system starts up. There are now 3.4 million mobile phone subscribers in Egypt, served by two private operators, UK-controlled Vodafone Egyptand the French/local Egyptian Company for Mobile Services. The four-year period of exclusivity enjoyed by the two operators expires in December 2002.