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How did the Communications Ministry manage to take the Egyptian market to 4G? Companies are paying the value of the licences in cash, with a one-month grace period to transfer required amounts, says Abdel Wahed
Negotiations on the conditions of 4G licences continued between the National Telecommunications Regulatory Authority (NTRA) and mobile companies for several weeks before matters were officially sealed regarding the three companies obtainment of the virtual fixed-line landline licences for $1.4bn. According to Mostafa Abdel Wahed, head of the NTRA, the three companies—Vodafone, Orange, and Etisalat—will pay the value of the licences in cash. They were given a period of one month to transfer the required amount from the parent companies outside Egypt, and were given four months to begin operating the 4G service. NTRA has signed the licences for the establishment and operation of the 4G networks, with $535.5m allotted for the establishment and $335m for the operation, with Telecom Egypt (TE) and Orange Egypt. Orange Egypt preceded the two other companies by signing the 4G licences on Thursday for $484m and $11.2m for the fixed-line licenses. Etisalat Misr and Vodafone Egypt then also signed the licences for virtual fixed-lines for $11.2m each later on Thursday. Total frequencies for Etisalat are 40 MHz, and 42.5 MHz for Vodafone. An official at Vodafone said that although the company received limited frequency bands for the 4G services, it will be the fastest company to provide the service to its customers, using their existing bandwidth of 42.5 MHz, of which 80% is "almost ready" to initiate the service. According to a government official who preferred to remain anonymous, total remaining frequencies for 4G licences were 10 MHz after Orange obtained 10 MHz. Etisalat obtained 10 MHz, while Vodafone obtained 5 MHz and was given the priority to obtain new frequencies once they are available in the near future. The telecommunications sector managed to add $1.3bn to the state's treasury for the value of the 4G licences sold to the three mobile companies. According to the official, mobile phone companies competed with each other to hold negotiations with the NTRA for the 4G licence, especially after Orange signed for obtaining the licence on Thursday. In terms of Orange's signature, which was a pivotal moment of change in the NTRA's negotiations with mobile phone companies, the official said that Orange had sent a formal letter requesting for the door of discussions about 4G licence terms to be opened a few hours before the NTRA's meeting. He added that during the meeting the NTRA opened the door for discussions with Orange, which asked to hold an immediate meeting in the presence of NTRA board members. They agreed to increase the frequencies that were allocated to it from 7.5 to 10 MHz. The company paid $484m instead of EGP 3.5bn, equivalent to $397m, under the conditions identified by the NTRA in September. He said that after Orange's signature, Vodafone and Etisalat hurried to open negotiations with the NTRA—Vodafone Intentional itself contacted with NTRA's officials to agree on the terms for the 4G service. Meetings have continued with the two companies throughout Saturday to reach a final agreement before signing for the licence later that same day. The official believes that the ministry has succeeded in spoiling what is described as a "secret agreement between mobile phone companies" to reduce the prices of fourth-generation licences. The official validated his point of view, saying that they paid more than the money specified in the conditions presented by the NTRA in September. An official in Etisalat Egypt said that frequencies offered by the NTRA (of 7.5 MHz) were not sufficient enough to provide 4G services; therefore, it was rejected by the three companies. He said that Vodafone and Etisalat hurried to negotiate about obtaining the 4G licence after Orange has signed for it on Thursday. Another official in one of the mobile companies said that Atef Helmy, former minister of communications and information technology and CEO of Orange Egypt, played a major role in concluding discussions between the company and the government.
