Wednesday,19 September, 2018
Current issue | Issue 1316, (20 - 26 October 2016)
Wednesday,19 September, 2018
Issue 1316, (20 - 26 October 2016)

Ahram Weekly

4G enabled

Compiled by Niveen Wahish

4G enabled
4G enabled
Al-Ahram Weekly

This week all three mobile operators signed deals with the National Telecommunications Regulatory Authority (NTRA) after refusing to do so last month citing insufficient spectrum. Orange Egypt signed off late last week, followed this week by Vodafone Egypt and Etisalat Misr, the local arm of the Abu Dhabi-based Emirates Telecommunications Group. 

Orange will pay $484 million for 10 megahertz (MHz) of spectrum. Etisalat will pay $535.5 million, also for 10 MHz of spectrum, while Vodafone acquired 5 MHz at $335 million. All three companies will also pay $11.2 million for a license to operate a “virtual” fixed-line network using Telecom Egypt’s (TE) infrastructure. 

The price of the license will be paid half in US dollars and the other half in local currency but priced on an exchange rate based on the dollar. Observers believe the latter factor encouraged the operators to move on with the signatures as a devaluation of the local currency is on the horizon. The NTRA offered the companies that paid the full amount in dollars priority in securing additional frequencies in the future.

TE, Egypt’s incumbent fixed-line operator, was the first to go for the 4G license in the summer. It agreed to pay LE7.08 billion for 15 frequency bands. According to an NTRA statement, the agreement with TE “permits the company to provide [4G] services using the new frequencies and providing 2G and 3G services through national roaming with the existing licensees.”

4G technology for mobile services will lead to increases in Internet speeds, ameliorating the quality of the currently provided services and introducing new ones, the NTRA said. It believes that the entry of new operators and the provision of virtual fixed-line phone services “will boost and enhance free competition, and consequently help in benefiting citizens in terms of quality of services and affordable prices, not to mention the provision of revenues to the public treasury and the creation of new jobs.” 

The four deals together will result in some $1.1 billion in hard-currency license fees and LE10 billion in local currency fees, Communications and Information Technology minister Yasser Al-Kady told the TV channel CNBC. The 4G deals include renewing the mobile operators’ 2G and 3G licenses until 2031, Mustafa Abdel-Wahid, acting president of the NTRA said, according to Bloomberg. He added that the companies would source the dollars for their deals from their respective parent companies.

One issue that remains to be resolved is TE’s 45 per cent stake in Vodafone Egypt. Having entered the mobile phone market, it now has to relinquish that stake. Allen Sandeep, Naeem Holdings’ head of research, told Bloomberg that TE had the option to float its stake, which would raise money for the government. He expected heated competition going forward with the entry of TE.

Research by investment bank Prime Holding expects TE to aggressively compete during the first six months over the 4G services. It believes that during that time TE will be “more than able to build its client pool that accounts for five per cent of mobile users in 2017” due to inclusive offers it is expected to offer and discounts to the public as part of a “one-shot marketing campaign during the six months to grab Egypt’s attention.”

Egypt had some 96 million mobile subscribers in June 2016, a penetration rate of 108 per cent.

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