* Rejection opens way for international operators
* Thursday was deadline for companies to accept offer
* Vodafone Egypt says spectrum insufficient (Recasts adding Orange, regulator statement, quotes, analyst)
By Ola Noureldin
CAIRO, Sept 22 (Reuters) - Egypt said it will considerauctioning its fourth-generation (4G) licences on theinternational market after all three of the country's existingmobile phone operators turned down an offer to acquire them.
Egypt, one of Africa's largest markets, is selling four 4Glicences as part of a long-awaited plan to reform the telecomssector and raise much-needed dollars for depleted governmentcoffers.
It gave the four companies already operating in Egyptpriority, but the only taker was Telecom Egypt, the statefixed-line monopoly which needs the 4G licence to enter themobile market directly for the first time.
The established mobile operators, Vodafone Egypt,Orange Egypt and Etisalat, rejected thedeal, saying the terms on offer were not viable.
In light of the rejections, Egypt's telecom regulator saidon Thursday it would consider other means of introducing 4Gservices to the country of 90 million, including aninternational auction.
"The options will be presented to the board of directors atits next meeting, in early October," it said in a statement.
The rejections could leave the way open for Kuwait's Zain, China Telecom, Saudi Telecom andLebara KSA, which had all expressed an interest in acquiringEgyptian 4G licences if the established companies bowed out.
There was no immediate statement from those companies.
Vodafone Egypt said it had rejected the licence because itdid not offer enough spectrum to operate 4G services properly.
"Vodafone Egypt confirms that it would be ready to acquire a4G licence if the terms and conditions can be revised," it saidin a statement.
Orange Egypt also said it could not agree to theterms. Etisalat has yet to issue a formal statement.
Sources told Reuters last month the three companies had alsoobjected to terms requiring 50 percent of licence payments to bemade in U.S. dollars.
A senior Telecoms Ministry official told Reuters at the timethe terms had been revised to include more spectrum but nochange to the licence payment conditions.
Egypt needs hard currency after burning through its foreignexchange reserves as political turmoil hit foreign investmentand tourism since a 2011 uprising.
Telecom Egypt was alone in acquiring its 4G licence for 7.08billion Egyptian pounds ($797 million) last month.
Analysts said while the telecom regulator could go for aninternational auction, both sides stand to gain more by resumingnegotiations.
Telecom Egypt will have to share infrastructure withexisting operators which, for their part, would be loath to seetheir market share diluted by the arrival of new players.
"We expect further negotiations to take place, since it isin favour of all parties involved," Cairo-based Pharos Holdingsaid in a note to clients. (Additional reporting by Eric Knecht; Writing by Lin Noueihed;Editing by Mark Potter and Susan Thomas)