Orange Buys Egyptian Network from France Telecom

Orange and its parent company have agreed to swap ownership of the Egyptian mobile phone network, MobiNil. France Telecom currently owns 71.25% of MobiNil, and Orange is paying US$320 million for the stake. This is in line with the intention expressed at the time of the IPO of Orange in February 2001. The addition of Egypt means Orange will have operations in 22 countries across Europe and beyond.

Orange will acquire joint control of MobiNil with Orascom Telecom as its partner. MobiNil owns 51% of Egyptian Company for Mobile Services S.A.E. (ECMS). ECMS was formed in 1998 and awarded its GSM900 licence the same year. ECMS markets its services under several brands including MobiNil, Moga and Alo.

Commenting on the acquisition, Jean-Francois Pontal, CEO of Orange, said: "We are pleased to be adding ECMS to the Orange group, thereby expanding the Orange footprint to a country with almost 70 million inhabitants and adding a valuable asset to Orange's portfolio." As part of the France Telecom group, ECMS is already an active participant in Orange's value creation teams and Orange's international division has been represented on the Board of Directors of ECMS since 2001. Orange believes that MobiNil can continue to deliver strong results in a currently under-penetrated market with exciting growth potential. The consideration for the acquisition - which will be funded through Orange's existing shareholder loan facility with France Telecom - is US$320 million in cash. The conditions relating to the transaction have now been met and the acquisition is expected to become effective this month.

We can presumably look forward to yet another network rebranding to be undertaken. Vodafone has a 60% stake in Vodafone Egypt, Egypt's only other mobile network, although competition in the market is due to intensify when the landline carrier, Egypt Telecom re-enters the market next year with its own GSM network.'"

Posted to the site on 4th July 2002