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Egypt offers long-awaited 4G licences

Four licenses are currently on offer, with Telecom Egypt (TE), the nationwide fixed-line operator, having acquired one at the end of August for LE7.08bn ($796.5m). The 15-year licence, which also includes 2G and 3G services, can be extended for another five years.

The other three mobile operators – Etisalat Misr, Orange Egypt and Vodafone Egypt – have also been approached by the National Telecom Regulatory Authority (NTRA), the sector regulator, who has set a deadline for September 22 to finalise their agreements.

The move will allow TE to enter the mobile telecoms market directly within six months; it already holds a 45% investment stake in Vodafone Egypt. In preparation for this step, the company is positioning itself as an all-inclusive operator and has begun rolling out 4G infrastructure, including fibre-optic cables.

“We will offer additional frequencies for the new 4G licences,” Yasser El Kady, minister of communications and information technology, told OBG. “This should allow Egyptian consumers to benefit from improved service.

Fierce competition and low pricing have been defining features of the Egyptian telecoms industry in recent years, driving operators to pursue higher-value-added data services to compensate for declining voice revenues.

“Average revenue per user is among the lowest in the world at around LE23 ($2.59) per month,” Yves Gauthier, the outgoing CEO of Orange Egypt, told OBG. “But it can be increased through boosting different usages, such as data, and developing new services.”

He estimates that data volumes will double every year, underscoring the importance of continued investment in capacity and spectrum.

As of May, there were 26.53m mobile internet subscribers in Egypt out of a population of 90m, according to the Ministry of Communications and Information Technology (MCIT); overall mobile penetration is much higher, at 108.23% according to MCIT’s June figures.The NTRA determined the prices of the 4G licences to be LE3.5bn ($395.6m) for both Orange Egypt and Vodafone Egypt, and LE4.5bn ($507.2m) for Etisalat Misr, with 50% of these values to be paid in US dollars.

Orange Egypt also disclosed that it was offered a landline licence for LE100m ($11.3m), which would allow it to compete with TE, and an international gateway licence for LE1.8bn ($202.8m). Currently, only TE and Etisalat Misr operate international gateways, leasing access to other operators.

The regulator asserts that by offering TE mobile licences, and opening up landline and international gateway licences to incumbent operators, it is giving all players the opportunity to compete on a level playing field.

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