Opening up telecoms
A new regulatory law is changing the face of the telecommunications sector
The new Telecom Act, approved by parliament in early February, is expected to further liberalise Egypt's telecommunications sector and regulate a multiple-player market, reports Niveen Wahish . At a meeting last week organised by the Egyptian High Tech Association and the Software, Information and Communications Technology Chamber at the Federation of Egyptian Industries, the broad guidelines of the new act were explained to the IT community.
One of the main aspects of the new law is the fact that it sets up The National Telecom Regulatory Authority (NTRA) to replace the Telecom Regulatory Authority. NTRA will oversee the application of the universal service principle, which stipulates the provision of telecom services throughout the country, including rural and remote areas where it may be unfeasible for telecom companies to provide the service.
A universal services fund has been created to compensate companies for losses they shoulder in extending service to areas where it may not be economically feasible. NTRA will also supervise regulating the band width, granting licences, as well as issues of national security.
NTRA's resources will come, among other things, from separate provisions in the national budget, in addition to annual fees collected on operation licences and those new licences.
Meanwhile, NTRA's permission is now required before telecom equipment is imported, manufactured or assembled. The authority's executive director, Fekreya Allam, told attendees that a list of the approved machines is to be published to serve as a guideline.
One chapter of the law has dealt with the situation of Telecom Egypt (TE), Egypt's incumbent operator. Until 31 December 2005, TE does not need to acquire licences for services it provides. It does, however, have to pay for the use of the bandwidth and the mobile phone services licence.
During this period, TE will continue to monopolise international lines. Akil Beshir, chairman of TE, said there are many underlying advantages in the law for TE. First, the law states that the minimum nominal value of TE's share is now to be LE10, down from LE100 -- a figure that could discourage potential buyers. The new law also gives the government a free hand to sell the company however it sees fit, not just through public subscription as before.
In addition, the law states that part of the company shares could be sold, as long as the government maintains a majority stake. The company's employees have the priority to buy up to five per cent of the company's shares once it is up for sale.
Meanwhile, the universal services provision will be very useful for TE, Beshir said, as the company is already providing extended services without compensation.
One controversial aspect of the law is the provisions for national security and public mobilisation. All service providers are to supply their networks with the necessary equipment that can be used by national security bodies to intercept calls as needed. While the draft law had allowed unrestricted wiretaps, wiretapping has to be approved by the judiciary under the new law.
Al-Ahram Weekly Online : 20 - 26 March 2003 (Issue No. 630)
Located at: http://weekly.ahram.org.eg/2003/630/ec5.htm