Country profile: Egypt

Egypt has suffered economic turmoil since the Ukraine war led to cost-of-living spikes, including access to fuel. With fuel subsidies putting a huge burden on the government’s finances, state-owned assets are being sold off to mitigate this. The government has raised US$121mn selling a 9.5% stake in Telecom Egypt with most shares sold to local investors as part of a broader plan to sell US$2 billion of state assets. This is likely a driver for Telecom Egypt’s sale, as the MNO is asking to be paid in US$.

While the economy is stabilising, the devaluation of the Egyptian pound has resulted in significant cost increases to deploying and maintaining tower networks, and towercos have started negotiations to adjust prices. However, with a large population and shortage of telecom infrastructure there is plenty of opportunity for growth. The government has also taken notice of the underinvested telecommunications infrastructure sector and has launched projects such as the Hayah Karima initiative to address this.

There has been some action from towercos as ICT Infrastructure provider Benya Group has acquired licensed towerco MobiTower, rebranding to BenyaTower, and is currently executing the governments ‘Hayah Karima’ initiative, a tower-sharing project overseen by the NTRA deploying 300 towers by the end of 2023.

Telecom Egypt is in talks for the sale of 2,500 of its 2,800-tower portfolio, with bids ranging from US$150-250mn, putting a per-tower valuation at US$60-100,000. These sites are understood to be 50% ground-based and 50% rooftop, with most in urban areas. The deal is also understood to include a build-to-suit commitment of 1,500 – 2,000 sites. A transaction was originally dated to finalise in Q1 2024, but no deal has yet materialized.

After Vodafone transferred its 55% stake in Vodafone Egypt to its African subsidiary Vodacom, the MNO is preparing for a carve-out to its new operator-owned towerco MAST Services, which launched in 2023 after taking over the operators 8,600 tower portfolio in South Africa. However, this is understood to be at the early planning stages, and no public information has come to light yet.

With MNOs still owning most of the tower infrastructure new tower deployments are operator-led, as Telecom Egypt is rollout out 1000s of new sites including ground-based, rooftops and inbuilding solutions and Etisalat Egypt investing US$270mn in network expansion.

A big driver of this is the NTRA’s push to ensure national 4G coverage, having accepting Telecom Egypt’s offer for additional spectrum to manage increasing capacity and coverage, as well as fund 5G rollout after the MNO secured a 5G license for US$150mn. Telecom Egypt is aiming to have 50% of its network 5G ready with a targeted rollout. Orange was allocated 5G spectrum back in 2022 with Ericsson since preparing their network.

In 2021 IHS Towers was awarded a 15-year towerco licensed as part of a revised NTRA framework, with the condition it reaches 5,800 new sites through sale leaseback and build-to-suit. However, there has been little progress in achieving this target so far.