CAIRO: The board of directors of Egypt’s National Telecom Regulatory Authority (NTRA) announced today that 9 out of 11 bids for the country’s third mobile license have passed the technical evaluation. The two bidders that have been disqualified were both made up of consortiums. Emac for Information Systems, a company affiliated with Kuwait’s Kharafi Group, together with India’s Reliance, formed the first consortium and the second was a consortium consisting of Saudi Telecom and Telekom Malaysia.
While reasons as to why the two losing bidders did not qualify have not yet been made public, according to a statement made by an advisor for the Ministry of Communications and Information Technology (MCIT), the choice is based not only on price, but also on how quickly each consortium can set up a network. The advisor also stated that bidding for the license would start at LE 2.5 billion, equivalent to $434 million as a one time upfront fee, in addition to 3 percent from the operator’s revenue as annual licensing fees.
This bidding process will take place over several rounds, eliminating the lowest financial offers in each round. In case of a tie, the technical evaluation results will be considered, favoring the bidder with the higher technical score.
The nine consortia that have advanced to the financial bidding process have received a score of no less than 700 out of 1000 in the assessment of the technical proposals, provided that such score is not less than 85 percent of the highest technical grade awarded.
The report of technical assessment of proposals submitted in response to the RFP issued on Feb. 19, 2006 was prepared by a multi-disciplinary committee, assembled by the NTRA to undertake the task of technically evaluating the proposals, consisting of experts from the Ministries of Investment and Finance, Administrative Control agencies, academia, the State Council, in addition to experts from NTRA.
The RFP was issued Feb, 19, 2006 and 11 consortia from Europe, Africa, Asia and the Middle East in partnerships with Egyptian companies and institutions submitted bids to NTRA on May 4, 2006, said Dr. Amr Badawi, executive president of NTRA. On July 4, 2006, a public auction for technically qualified bids will take place at the NTRA headquarters at the Smart Village, he added.
The nine qualifying contenders remaining following the technical assessment, who are now eligible to submit bids at the auction to be held on July 4, 2006, are, according to their priority in applying for the REF ranking: Etisalat of UAE, with Egypt Post, National Bank of Egypt (NBE) and Commercial International Bank (CIB); MTC of Kuwait with Egyptian Financial Group (EFG-Hermes) and Bahgat Group; MTS of Russia and TeleTech of Egypt; TurkCell of Turkey, with Banque Misr of Egypt and Amwal from the Gulf; TeleNor of Norway and the National Telecom Company (NTC) of Egypt; Wataneyia International of Kuwait, with Univest, the National Bank for Development of Egypt, and Aman Trading; Nesma Consortium – Qtel of Qatar, Naaem Group, and Singapore Tech Telemedia; Telecom Egypt and Telecom Italia; and MTN of South Africa with Raya Holding of Egypt.
In early December, Nasser Al-Kharafi, president of Mohamed Abdulmohsin Kharafi and Sons Company, said that the group, through Emak, a company under the Kharafi Group, was planning to bid for Egypt s third mobile license, together with a foreign partner, which at the time was unannounced. Emak certainly had the financial resources to make it through the price war of the bid, thanks to the fat wallet of the Kharafi Group, one of the wealthiest privately owned and family-run companies, with revenues in 2006 reaching an estimated $3.3 billion. The Kharafi family was also recently ranked as the 29th richest people in the world in Forbes magazine s famed list.
Saudi Telecom and Telekom Malaysia, which had signed an MOU to bid for the third license in Egypt, believed that with the networks and 13 million subscribers between them, the consortium had the infrastructure, services, and financial resources for a successful bid.
At the economic forum held in Sharm El-Sheikh last month, the president and CEO of Saudi Telecom Company, Eng. Saud Al Daweesh, who delivered a key note speech at the Convergence of ICT and Broadcasting conference said that Saudi Telecom is planning to meet the economic and social challenges in Egypt should they win the bid.
“Adapting in real time to an ever changing economy is a major challenge for all companies. Our expedience of [this market] is unrivalled and we believe this challenge can be met, both on a business and social level, through the work we currently do to help our nation and this will never change, he was quoted as saying. “Should we win the license in Egypt we would implement the same strategies here. It is our duty to creatively leverage new technologies for the good of our customers and to succeed as an organization while adding value to the economy and to the society we operate from within, driving today s communications forward and helping source tomorrow s growth, for everyone, he added.