Egypt: More 3G Profits
The Egyptians have joined the Brits and Germans in earning vast upfront 3G profits. It is a shame that it not a mobile operator, but another government.
Vodafone Egypt have agreed to pay LE3.34bn (US$584m) + 2.4% of total revenues as a licence fee for 3G spectrum. Vodafone Egypt recently declared an annual turnover of LE6.8bn and revealed that approximately 22% (LE1.5bn) of this will be Free Cash Flow. Therefore, Vodafone is paying over around 27 months of Free Cash Flow over to the government (assuming no further growth) plus a share of ongoing revenue which seems a little heavy.
However, it is not as much as the third player, Etisalat, agreed to pay LE16.7bn (US$2.9bn) for a 2G/3G licence which was equivalent to 3.4% of Egypt GDP. If we look at the revenues of a % of GDP or % of mobile revenues then the Egyptian 3G auction actually raised more than the UK. Etisalat is expected to launch in April 2007. This could be a mistake of Hutchison Whampoa proportions.
It will be interesting to see (or when) if the owners of the market leader, Mobilnil (Orange / Orascom), agree to pay up.
Vodafone Egypt have agreed to pay LE3.34bn (US$584m) + 2.4% of total revenues as a licence fee for 3G spectrum. Vodafone Egypt recently declared an annual turnover of LE6.8bn and revealed that approximately 22% (LE1.5bn) of this will be Free Cash Flow. Therefore, Vodafone is paying over around 27 months of Free Cash Flow over to the government (assuming no further growth) plus a share of ongoing revenue which seems a little heavy.
However, it is not as much as the third player, Etisalat, agreed to pay LE16.7bn (US$2.9bn) for a 2G/3G licence which was equivalent to 3.4% of Egypt GDP. If we look at the revenues of a % of GDP or % of mobile revenues then the Egyptian 3G auction actually raised more than the UK. Etisalat is expected to launch in April 2007. This could be a mistake of Hutchison Whampoa proportions.
It will be interesting to see (or when) if the owners of the market leader, Mobilnil (Orange / Orascom), agree to pay up.
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