VE day approaches for Vodafone

17 April 2003
French telecommunications group Vivendi Universalis understood to be preparing to sell its 7 per cent stake in Vodafone Egyptto Vodafonefor $48 million, increasing the UK parent company's stake in the GSM operator to 67 per cent. Vodafone has been pursuing a global expansion policy and has made several offers to buy out minority shareholders' interests in its operations abroad (MEED 28:3:03).

First launched in 1998 as Misrfone Telecommunications, Vodafone Egypt and the other incumbent GSM operator, Egyptian Company for Mobile Services (Mobinil), have a roughly equal market share of about 4 million subscribers.

Both companies have been upgrading their networks in preparation for the launch of a third GSM operator in the fourth quarter by Telecom Egypt (TE). Vodafone Egypt has placed an order with Ericssonof Sweden to deliver and install general packet-switched radio services (GPRS), mobile-to-mobile services and instant messaging services for its existing network.

Between them, Mobinil and Vodafone Egypt account for a large portion of Egypt's relatively small middle class of consumers, and TE will face the challenge of winning new subscribers from predominantly low-income groups, analysts say. The two incumbents also maintain that they have already invested in enough capacity to serve 6 million subscribers. This suggests that TE will have to adopt an aggressive marketing strategy to make headway.

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