Egypt 4G licensing process in limbo
Egypt 4G licensing process in limbo
Egypt's National Telecom Regulatory Authority (NTRA) says it is considering alternative ways, including international tender, to offer 4G licences after the country's three mobile operators did not apply for permission to offer 4G services ahead of the yesterday's deadline.
The only application received by the regulator was granted to fixed-line monopoly Telecom Egypt at the end of August 2016 for US$806m.
"Since the three telecoms didn't submit their request for obtaining the 4G licence, and after the prescribed time limit, NTRA addressed the three companies, informing them that the pre-agreed conditions and prices of 4G licenses are cancelled, and that NTRA is committed to implementing the Egyptian Cabinet's decree issued on 4 May 2016 regarding the regulatory framework for providing 4G services and licenses," stated the Ministry of Communications and Information on its website on the final day of applications.
NTRA Board of Directors (BoD) say they have now decided to consider different alternatives to offer 4G mobile licences following a meeting chaired by Egypt's Minister of Communications and Information Yasser ElKady on the day of the application deadline.
A decision on the way forward will only be communicated after the next board meeting in October where a decision on how to deal with the outcome of the licensing process will be made according to the NTRA board.
Contentious terms and conditions
At least one of the mobile operators has since given reasons for its decision to not apply for the 4G license on offer. Vodafone Egypt has pointed to unfavourable license conditions in a statement where the company expressed its wish to launch 4G services in Egypt as soon as possible under what it describes as the "right conditions".
"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."
Vodafone Egypt adds that it would be ready to acquire a 4G license if the terms and conditions can be revised to encourage future investment in the development. The company says will work alongside the Egyptian government to try and roll out its 4G services in the country in the "quickest possible timeframe".
Vodafone Egypt holds the largest share of subscribers and revenue in the country.
The lack of interest in taking up the 4G licenses came as a surprise to some in the Egyptian telecommunications industry as local investment banking and research firms, including Beltone Financial, had predicted earlier in 2016 that the expected growth in mobile data revenues over the coming years would mean that the 4G licences would taken up as soon as they are made available.
Beltone Financial forecasted growth ranging from -0.2% to 1.6% up to 2019, while the government envisages growth rates of a minimum of 3% in 2016 due to ongoing developments in the sector as part of global consultancy Oxford Business Group's 2016 Telecoms and IT report.
The NTRA has since reiterated what it says is a strong commitment to providing the best services and the latest technologies for citizens in accordance with international quality and in a bid to ensure healthy competition in the Egyptian ICT market in a statement on the ICT ministry's website.