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Egyptian telecoms sector moves towards 4G

Change is a foot and operators are preparing to move adeptly in the years to come to take advantage of new opportunities and face new challenges. Yasser El Kady, Egypt’s new minister of communications and technology, has outlined a number of new policies for the sector, which include investing in telecoms infrastructure and widening access to mobile services in rural communities across the country.

In line with this, the Ministry of Communications and Information Technology (MCIT) has announced plans to offer 4G spectrum in 2016, as part of a broader plan to increase internet penetration that includes fixed-line ADSL in the national market. The government has also expressed its intention to offer a variety of licences, so that the three mobile operators and the fixed-line monopoly, Telecom Egypt (TE), can compete evenly across all segments of the market.

In spite of the uncertainty over the short-term regulatory framework, the market is currently stable and predictable. In the mobile segment, business has been ticking along with revenue growth in the low single digits, and while the current revenue levels are less than ideal, the outlook in the next 12 to 18 months should improve noticeably, as data services increase. In 2014, for example, the combined revenue of the sector grew by approximately 2.8%.

Beltone Financial, a local investment banking and research firm, predicts that the decline will be arrested in the next half decade on the back of growing mobile data revenues. The company forecasts growth ranging from -0.2% to 1.6% up to 2019, while the government envisages growth rates of a minimum of 3% in 2016 due to ongoing developments in the sector.

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