Sunday,23 September, 2018
Current issue | Issue 1312, (22-28 September 2016)
Sunday,23 September, 2018
Issue 1312, (22-28 September 2016)

Ahram Weekly

Not eager for 4G?

Local mobile network operators seem reluctant to apply for 4G licenses even as the deadline for applications hits today, reports Shaimaa Shalaby

Al-Ahram Weekly

Egypt’s three mobile network operators are to decide today on applying for the 4G licenses the government offered recently as part of a long-awaited plan to reform the telecoms sector.

If the National Telecommunications Regulatory Authority (NTRA), the telecommunications sector regulator, does not receive offers from the three local operators it will hold an international tender to sell the licenses.

Telecom Egypt (TE) acquired its license last month.     

The licenses, which provide for a new generation of high-speed telecommunications and data transfer, have caused controversy since the prime minister agreed to offer them.

The mobile operators objected to conditions related to the value of the licenses, the payment methods, and the frequencies. This was in addition to reservations about the fact that the licenses would enable Telecom Egypt to enter the mobile market.

The licenses will also allow the mobile operators to offer fixed-line services, ending Telecom Egypt’s domination of the sector.

In August Egypt’s telecoms regulator directly offered 4G licenses to the three companies currently offering mobile services, Orange Egypt, Vodafone Egypt, and Etisalat, as well as to TE.

This was despite the fact that TE’s acquisition of its license was expensive and could lead to its selling its 45 per cent stake in Vodafone Egypt. However, the license was “a matter of life or death for the company,” said a telecommunications expert who asked to remain anonymous.

The fourth generation (4G) licenses refer to technology that transfers data at higher speeds because it treats data at the same speed as voice. The technology enables the user to display and transfer photographs and multimedia files including videos in a faster and clearer way.

Companies operating 4G networks can offer maximum speeds for data transmission that reach 100 megabytes per second for remote mobile communication users in cars and trains and one gigabyte per second with wi-max technology.  

In June, the NTRA informed all four telecoms companies working in Egypt of the terms and conditions for acquiring the licenses. It said it targeted collecting a total of LE22.3 billion from license fees and added that 50 per cent of the fees would be collected in dollars.

Telecom Egypt, the state-owned landline monopoly, acquired the country’s first 4G mobile license last month at a cost of LE7.08 billion.

The company paid LE5.2 billion, half of which was in dollars and will pay the balance over installments over four years.

TE said it was ready to buy the 4G frequencies any of the other three operators would not use.

Tamer Gadallah, the CEO of TE, said that trial operations of the service would start in six months, while the company would begin offering the service as soon as it had finished building the necessary infrastructure.

Yasser Al-Kady, minister of communications and information technology, said the NTRA had considered offering 4G licenses internationally. Egypt gave companies already operating in the domestic market priority in obtaining the 4G licenses, but has said it will launch an international tender should any of the operators decline the offer.

A number of Asian and Gulf telecommunications companies have expressed interest in the licenses.

The three mobile network operators said they had been surprised that the NTRA had agreed that TE could pay the license fee in installments, a right they were denied when they asked for it last August.

Ayman Essam, head of legal affairs at Orange Egypt, told Al-Ahram Weekly that his company was waiting for a response from its parent company on whether to apply for a license or not, especially since the 4G frequencies “would not represent a great addition to the company” unless the rest of the second and third generation frequencies were also made available.

He said the company might not apply for the license if it was not economically viable. The company had reservations about the size of the frequencies offered as they were less than the International Communications Union recommendations concerning 4G frequencies.

The International Association of Mobile Networks has called on the government to put a road map in place for the 4G applications in order to guarantee the successful launch of the service in Egypt.

Japan was the first country to introduce 4G technology in 2004, followed by Norway and Sweden in 2009 and the US in 2010.

Saudi Arabia and the UAE were the first Arab countries to use 4G in 2011. The technology had two million users in 2009, jumping to 1.1 billion in 2015.

The writer is a freelance journalist.

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