Egypt's mobile phone companies referred to prosecutors

Egypt's antitrust watchdog says Mobinil and Etisalat have not been cooperating with an investigation into the companies' imposition of a new stamp duty on customers

Egypt's Competition Authority (ECA) announced on Tuesday that it had referred mobile operators Mobinil and Etisalat to public prosecutors for investigation, charging them with failing to cooperate with the authority.
"Antitrust law compels economic entities to cooperate with the ECA, in making statements and documents in a timely manner as requested by the authority," said ECA Chairman Mona El-Garf in a press statement.
The ECA has been investigating mobile companies Mobinil, Etisalat, and Vodafone Egypt on suspicion of breaching Egyptian antitrust law.
The simultaneous imposition of a stamp duty by all three companies on pre-paid subscribers at the exact same rates beginning in January 2012 is a violation of Article 6 of the Egyptian antitrust code, according to the authority.
Mobile operators started charging the LE6.1 annual tax from all their subscribers in monthly instalments of LE0.50 and LE0.51 early last year, according to Vodafone Egypt's official website.
The tax itself is not new, having been in force since Law 111 was enacted in 1980. The operators claim that though they had hitherto borne the burden of the tax on behalf of their subscribers, the current economic situation obliged them to charge it to their customers.
"In reality, this was a concerted price raise, not a tax imposition," said Ahmed Samir, Executive Director of Egypt's Consumer Protection Agency, which initially referred the case to the ECA in November of last year for investigation.
"Taxes and duties were always included in the price of pre-paid cards and factored into post-paid bills," Samir told Ahram Online. "The stamp duty was not a new development to justify this concerted action by all three companies, but a pretext to raise prices."
"The fact that the move was made simultaneously by all the companies and that the same rates were applied is what in our view made this a possible breach of anti-trust law."
The ECA had begun practical investigations of the three operators in January 2013, according to Ibrahim Abdel Rehim, head of the authority's communications department, but faced resistance from Mobinil and Etisalat in failing to submit requested documents.
For its part, Mobinil released a press statement on Tuesday questioning the ECA's jurisdiction over its activities, which according to the operator belongs solely to the National Telecommunications Regulatory Authority.
Although the company has yet to receive a formal summons from the public prosecution, it affirmed that once it does it will provide evidence of its cooperation with the ECA, and said that it did present the requested documents to the authority.