Orascom Loses Zimbabwe License

CAIRO, Egypt -- Orascom Telecom Holding SAE (OTH) announcedtoday that its operation in Zimbabwe, Telecel Zimbabwe (Pvt.) Ltd., was notifiedof the cancellation of its mobile telecommunications license by the Postal andTelecommunications Regulatory Authority of Zimbabwe (“POTRAZ�) on 9 August2007 for its alleged failure to comply with the Postal and Telecommunications Actand provisions of the license limiting foreign ownership to 49%.

Telecel Zimbabwe has appealed this decision to the Minister of Transport andCommunication and applied to the High Court of Zimbabwe to prevent POTRAZand all other persons from in any way summarily terminating the use andoperations of the Telecel Zimbabwe network without due process. The appealalso seeks to allow Telecel Zimbabwe the unimpeded use and operation of thenetwork until such time as its rights to appeal under the Postal andTelecommunications Act and the Zimbabwean Constitution have beenexhausted.

Telecel Zimbabwe serves approximately 235,000 subscribers, and is owned byOTH, owning a sixty percent stake through its wholly-owned subsidiary, TelecelInternational Ltd., with Empowerment Corporation (Pvt.) Ltd., a consortium ofseveral indigenous investors, owning a forty percent stake.Despite its good faith efforts and for reasons beyond its control, TelecelInternational Ltd. has been unable to conclude a fair value transaction for 11% ofTelecel Zimbabwe shares to reduce its stake to 49%. Telecel International Ltd.has written to POTRAZ requesting a two-year extension to meet the requiredforeign shareholding limitation, indicating that such an extension would enable adefinitive resolution to the issue in a more suitable setting for additionalinvestment without in any way harming Zimbabwean investors as the operation ishighly unlikely to pay dividends during such time period due to local economicissues.

In terms of meeting Zimbabwe’s indigenisation goals, the operation is alreadyalmost completely staffed and managed by Zimbabwean personnel. TelecelZimbabwe was deconsolidated from OTH’s financials in 2003.Mr. Naguib Sawiris, Chairman and CEO of OTH stated, “We remain committed tothe market in this economically difficult period for Zimbabwe, and are awaiting aresponse to our request to POTRAZ that will allow us to continue to develop thissignificant investment in a reasonable environment.�

Orascom Telecom