According to the statement, the LE 600 million agreement, signed on Wednesday, allows Etisalat to make use of parts of Telecom Egypt's basic infrastructure to provide services to its customers.

The landline operator, which is 80 percent state-owned, is seeking to launch mobile phone services to ease pressure from declining fixed-line subscriptions.

Total fixed-line subscribers to Telecom Egypt fell from 7.9 million in the first quarter of 2012 to 7.2 million in the same quarter in 2013, ending 31 March.

The Egyptian government is planning to allow Telecom Egypt to provide mobile phone services, while also allowing the three existing mobile operators – Mobinil, Vodafone Egypt and Etisalat Misr – to provide landline services.

The anticipated license will be a virtual license by which Telecom Egypt gains access to competing operator's existing infrastructure while allowing mobile operators to use its landline network infrastructure.

In an earlier statement, Etisalat Egypt specified that the agreement was only a "domestic transmission leased lines agreement," pending a more wholistic interconnection agreement between the two parties.

Etisalat added that it considered "the settlement of all outstanding issues between TE and Etisalat Misr, including the current financial disputes, as well as the signing of a fair interconnection agreement, one of the most important pre-requisites for awarding TE a new mobile license in Egypt."

*This article was corrected from an earlier version published on 18 July, 2013 which stated that the two companies had signed a Memorandum of Understanding over an integrated license, rather than a transmission agreement.