Vodafone is reported to be in talks to sell its majority stake in Vodafone Egypt to Telecom Egypt, which already owns 45 percent of the mobile operation. The Financial Times claims that a future sale of Vodafone’s 55 percent share could be worth £3 billion (US$4.3 billion). Vodafone Egypt is highly profitable, and generated £488 million of operating cash flow in 2009-10. Fixed-line operator Telecom Egypt is believed to be keen to enter the domestic mobile market. The Financial Times notes that if no deal is finalised with Vodafone, Telecom Egypt could try and secure its own mobile operating license. The Egyptian government has not ruled out issuing a fourth license.

According to Wireless Intelligence, Vodafone Egypt is the country’s second-largest mobile operator, with a 43 percent market share and 24.6 million connections. The Egyptian mobile market is expected to become more competitive after last month’s settlement between France Telecom and Orascom Telecom, the joint controlling shareholders in ECMS, Egypt’s largest mobile operator. Their decision to end their bitter standoff means that market leader Mobinil could become more aggressive. Egypt’s third mobile operator is Etisalat, the Dubai-based telecoms company that paid US$2.6 billion in 2006 for an Egyptian operating licence and now has 7 million connections (a 12 percent market share).