Egypt, S.Arabia step up trade ties through coordination council talks    Egypt reviews progress on $200m World Bank-funded waste management hub    Egypt urges Israel to accept Gaza deal amid intensifying fighting    SCZONE showcases investment opportunities to eight Japanese companies    Egypt, ADIB explore strategic partnership in digital healthcare, investment    SCZONE, Tokyo Metropolitan Government sign MoU on green hydrogen cooperation    Egypt welcomes international efforts for peace in Ukraine    Al-Sisi, Macron reaffirm strategic partnership, coordinate on Gaza crisis    Contact Reports Strong 1H-2025 on Financing, Insurance Gains    Egypt, India's BDR Group in talks to establish biologics, cancer drug facility    AUC graduates first cohort of film industry business certificate    Egyptian pound down vs. US dollar at Monday's close – CBE    Egypt's FM, Palestinian PM visit Rafah crossing to review Gaza aid    Egypt prepares unified stance ahead of COP30 in Brazil    Egypt recovers collection of ancient artefacts from Netherlands    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Egypt, Namibia explore closer pharmaceutical cooperation    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Egyptian, Ugandan Presidents open business forum to boost trade    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt, Huawei explore healthcare digital transformation cooperation    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt to inaugurate Grand Egyptian Museum on 1 November    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Competition set to rise in Egypt's telecoms industry
Published in Daily News Egypt on 16 - 06 - 2014

A new licence system governing Egypt's fiercely competitive telecoms sector is expected to be rolled out within weeks, paving the way for mobile and fixed-line operators to vie for each other's business.
While the country has a large consumer population, as penetration has passed 100%, telecoms players have faced an increasingly tough marketplace in recent years, often finding themselves forced to lower prices and look for other sources of revenue through value-added services (VAS).
Most significantly, the universal licence system will allow the main fixed-line operator, majority-government-owned Telecom Egypt (TE), to enter the mobile market. It will also pave the way for the three mobile players – Vodafone, Mobinil and Etisalat Egypt – to establish fixed-line businesses, although current arrangements prevent them from accessing TE's fibre-optic network.

All change
The Ministry of Communication and Information Technology (MCIT) said it expected the licence's roll-out – previously delayed due to political instability – to take place before the end of June. Provided there are no further delays, TE has previously indicated it will be looking to launch its own mobile operator in the second half of 2014.

The company's general manger for investor relations and internal reporting, Mohamed Kamal, told local press at the end of March that TE would target 5m subscribers, or 5% of the mobile market by subscriber numbers, for 2014. Egypt's subscriber base totalled 99.7m at the end of 2013, according to MCIT figures.
TE, which already owns a 45% stake in Vodafone Egypt, will likely launch a mobile virtual network operator (MVNO) following the universal licence system's roll-out. MVNOs have the advantage of a lower capital outlay than traditional operators and are able to introduce their services quickly, since they lease spare spectrum capacity from other operators for an agreed price, eliminating the need for expensive infrastructure installation. However, their set-up also gives them less control over service quality and tends to produce lower margins, prompting some to question whether the firm will eventually opt to launch its own network.

Competitive climate
Egypt's mobile market presents challenges for both existing operators and new entrants. While penetration reached 118.2% at end-2013, according to MCIT data, subscriber growth slowed significantly last year, prompting suggestions that the days of high-volume growth are over.
Increased competition means companies partially rely on winning over customers from other players, which is driving down prices. Average revenue per user (ARPU) dropped to EGP 22-26 ($3.13-3.70) in mid-2013, representing one of the lowest levels in the world, and leading operators to look increasingly to encouraging greater data and VAS usage.

Calls for clarification
The tight pricing environment has also inevitably raised concerns about TE's market entry. In March, both Vodafone and Etisalat called on the government to clarify the rules of the universal licences and re-weigh them in favour of mobile carriers.
Current arrangements provide mobile carriers with access to TE's copper wires but not its fibre-optics network, which is arguably one of the more useful components of the firm's infrastructure, given its ability to carry greater internet data traffic. Some players are also thought to favour a price floor, in light of the impact on ARPU in recent years from slowing penetration and greater competition.
Obtaining access to fibre-optic infrastructure could prove pivotal for the sector as a whole, since increased competition is likely to see operators focus on boosting take-up of additional services, particularly through mobile internet usage and applications. The MCIT estimates that only around 15% of mobile subscribers use the internet on their mobile devices, offering plenty of room for growth.
"While voice revenue continues to be stagnant, if not declining, mobile operators tend to search for new revenue streams like VAS. Such value-added services would also keep the customers engaged and hence can be used as a retention tool," Saeed Al Hamli, CEO of Etisalat Egypt, told OBG. "Mobile data services also continue to be the major contributor of revenue growth currently and will be in the future."
The handing out of universal licences should pave the way for the second phase of industry development, Al Hamli added, involving the roll-out of long-term evolution (LTE). Similar to 4G networks, LTE will support considerably higher data volumes, at a time when internet usage is likely to be growing strongly. However, the process will be capital intensive and require significant investment.
TE's mobile subsidiary will be launching at a time of tight competition in Egypt's telecoms sector, with Vodafone, Mobinil and Etisalat well established. Yet, in the medium term, it should help stimulate differentiation between providers and encouraging the take-up of VAS on a developing LTE network.


Clic here to read the story from its source.