Saturday, May 22, 2010

Vodafone To leave Egypt : More Than Economic Decision

Telecom Egypt wants to buy all the Shares of Vodafone in Vodafone Egypt mobile operator

A news that made headlines in almost all the newspapers in Egypt today , a surprising news that no one has expected. The local telecommunication giant which is struggling to stand against the mobile phone operators in Egypt wants to buy 55% of the shares of Vodafone Egypt for LE 30 billion.The losses of the stock exchanges and woes of Greece made TE to think about this daring proposition.

TE is in deep trouble , it wants to secure itself in front the invasion of mobile phone operators , nobody is using the landlines now and it has to find a new way to make sure it will exist in the 21st century.

Now I do not understand Vodafone position from all this , the Egyptian market is very profitable and they have secured their place in the market indeed and it is not only about mobile phone operator but it has become more than that so what is going on !!??

According to the Guardian , the British giant wants to focus on Europe and India and this is why it will sacrifice its successful Middle East investment.

Is Vodafone going to leave the market or is it a big game for the stock markets !!?? And if it is packing for real ; is it because of economic woes only or because of the unknown political future of Egypt or both of them !!??

Capital money is coward and giant companies as Vodafone hate to invest in politically instable countries , it is not a secret if anything happens to the Mubarak regime many foreign businesses will re-think in staying in this instable time in the country.You can read the famous Reuters report about the political risks to watch in Egypt because it is related to our issue here.Those giant multi-national companies have market intelligence and market forecast to secure their investments. To enter or exist a foreign market there is a set of factors from economic to political to social factors all combined together so to have a growing fierce competition in a financial crisis time plus unknown political future ; then it is time to pack our bags and leave when it is safe.

By the way If I am not mistaken there was a big talk about corruption in the Misr phone deal, the original network Vodafone acquired and some day all these files will be opened.

I think Vodafone may find no more reason to invest in Egypt, it is better to leave now with profits before crossing the break even point.

2 comments:

  1. Thanks Vodafone. Go home, and do not forget that you came on a big corruption deal with Misr phone.
    Any new clean regime will definitely be better than the present corrupted regime
    Isis

    ReplyDelete
  2. Probably Vodaphone wants to leave before things get worse. Maybe Egypt is too unstable politically for its comfort zone. What if Egypt decides to nationalize the mobile companies? There are billions of dollars at stake here and better be safe than stupid.

    Any country where people love to chit chat like Egyptians is a gold mine for mobile companies. These companies are making a ton of money. Even millions of people who can't afford the monthly bill go in debt to have these phones. It's crazy.

    ReplyDelete

Thank You for your comment
Please keep it civilized here, racist and hateful comments are not accepted
The Comments in this blog with exclusion of the blog's owner does not represent the views of the blog's owner.