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Egypt salvages sale of 4G licenses

Egypt salvages sale of 4G licenses

Egypt's National Telecom Regulatory Authority (NTRA) has announced that it has reached agreements for the establishment and operation of 4G networks by the country's three telcos during the weekend.

The newly signed deals brings an end to the uncertainty that surrounded the sale as all three telcos failed to meet the NTRA's deadline of 22 September for the submission of their 4G license applications. Disagreements between the telcos and the NRTA on price and other conditions led to the government cancelling its offer after which NTRA Board of Directors met to consider offering the 4G licenses as part of an international tender, among several other alternatives.

The signing ceremony took place at the NTRA's Smart Village premises on 15 October in the presence of the Minister of Communications and Information Technology Yasser ElKady, NTRA officials and senior officials from the three telcos.

Vodafone Egypt signed its 4G license for US$335 million, as well as a license to offer virtual fixed-lines services worth US$11.262 million. Etisalat Misr's 4G license cost US$535.5 million while their fixed-line license totalled US$11.262 million. Orange Egypt agreed to fork out US$484 million and US$11.262 million for its 4G and fixed-line licences respectively.

The Ministry of Information and Communication Technology (MICT) has stated that the inclusion of fixed line licenses in all three deals is a bid to "increase healthy competition, and help in benefiting citizens in terms of quality of services and prices provided...in addition to providing revenues to the State's public treasury and creating new jobs."

Stefano Gastaut, CEO of Vodafone Egypt (which, according to Oxford Business Group's 2016 Egypt Telecoms and IT report, has largest share of subscribers and revenue in the country) signed on behalf of the company for a total of Vodafone 42.5 MHz in frequencies.

Vodafone Egypt was the first of the three telcos to go public about the failure to reach consensus with the government of Egypt with regards to the 4G licences. Vodafone Egypt it would acquire a 4G license if the terms and conditions can be revised in a statement issued shortly after it missed the deadline last month.

"After extensive analysis, Vodafone Egypt's Board of Directors regrets to say that it believes the current terms and conditions of the 4G license do not serve the interests of the Egyptian citizen and do not take into account the developmental dimension of the telecom sector in Egypt. The license does not offer sufficient spectrum to operate 4G services efficiently and in a way that would allow the Egyptian user to experience significantly higher speeds. Furthermore, the lack of available 4G spectrum could also impact the quality of 2G and 3G services being enjoyed by over 40m existing customers. Accordingly, the board has decided to decline the 4G license in its current form."said Vodafone Egypt weeks before it agreed to a deal two days ago.

For its part, Orange Egypt said it had missed the deadline because "the quantity of spectrum availed ahead of the deadline did not allow it to launch a 4G service with the required level of quality according to all international standards." Orange Egypt's frequency was not specified although Etisalat Misr has been granted 40 MHz total frequencies.

Etisalat Misr and Orange Egypt were both represented their individual CEOs Hazem Metwally and Jean Marc Harion. Minister of Communications and Information Technology Yasser ElKad signed on behalf of the government.

The three telcos join fixed-line monopoly Telecom Egypt which was the only application received by the NTRA within the deadline period. It was awarded for US$806m.

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