2016 Egypt - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

Egypt’s regulator issues two unified licenses, prepping for LTE services

Supported by a population of more than 88 million, Egypt has one of the largest fixed-line and internet markets in Africa and the Arab region. There is also a large mobile market, with mobile penetration having reached 112% by late 2016. Although there is effective competition in most markets, the licensing regime still requires for development. One key development is the award of unified licences to allow operators to offer services in the fixed-line and mobile sectors. The incumbent telco Telecom Egypt, still majority owned by the State, secured one of the licenses on offer in August 2016 which allows it to offer LTE services. The three mobile network operators initially failed to bid for the remaining three licenses, which would have enabled them to enter the fixed-line market and provide fully convergent service offerings. This prompted the government to consider opening the bidding process to international operators, but shortly afterwards Orange Egypt secured a licence after having renegotiated its terms.

The country’s political crisis following the ‘Arab Spring’ revolution which began in 2011 adversely affected the telecom sector. Although revenue has remained stable, profit margins and capital expenditure have fallen due to a weaker local currency, especially since the beginning of 2013, and international investors have shown considerable caution. The government in recent months has endeavoured to secure billions of dollars in funding to develop technology parks and to extend broadband availability, and in the process to create jobs in ICT and rekindle international investor interest.

Efforts are underway to roll out next-generation networks, offering converged IP-based voice, data and entertainment services. Egypt is well connected by several international submarine fibre optic cables, while it also has an extensive national fibre backbone and some of Africa’s most vibrant FttP deployments.

Although Egypt was among the first countries in the region to launch 3G services, the development of LTE has suffered from delays. Nevertheless, Telecom Egypt in August 2016 received the country’s first unified services licence, which allows it to offer LTE services. A commercial launch is expected in the first quarter of 2017. Competition will be provided by Orange Egypt, while Vodafone Egypt and Etisalat Misr may also secured licences on more favourable terms.

The country’s extensive international bandwidth, together with considerable market competition, has meant that Egypt offers some of the lowest prices for DSL services on the continent. The three mobile network operators also offer mobile internet while each also hold stakes in local ISPs. The launch of LTE services will greatly enhance the capabilities of mobile broadband services in coming years.

This report outlines the major developments in the Egyptian telecom sector, including updated statistics and profiles of the operators, a review of regulatory measures, spectrum assignments and licensing. It also assesses market structure and competition issues, as well as the deployment of emerging technologies.

Key developments:

• Telecom Egypt and Orange Egypt receive Unified Telecom Licence;
• Orange Egypt, Vodafone, Telecom Egypt sign $2 billion infrastructure sharing deal;
• Consortium signs contract to build the EA-ME-WE 5 cable;
• Orange Egypt contracts NEC Corporation to provide microwave radio system for LTE traffic;
• Vodafone sees subscriber recovery into 2016;
• Telecom Egypt extends the reach of its fibre networks;
• Continuing strong growth of DSL and mobile broadband;
• Report update includes the regulator’s market data to July 2016, telcos’ operational and financial data to Q2 2016, recent market developments.

Companies mentioned in this report:

Telecom Egypt., Orascom Telecom, Menatel, NilePhone, Raya Telecom, Zhone Technologies, NEC, Nortel Networks; Qualcomm, ZTE, Huawei Technologies, Orange Egypt (Mobinil, ECMS, Global Telecom Holding), Vodafone Egypt, Etisalat Misr, Thuraya, Iridium, Inmarsat, Alkan Communications, EgyptSat, MobiServe, Ericsson, Nokia Networks, Alcatel-Lucent, TE Data, EgyNet, LINKdotNET, Nile Online, Yalla, Equant, Noor, Vodafone Data (Raya Telecom), Menanet, Batelco, Soficom, Egypt Network, Internet Egypt, MenaNet, MenaSat, iSkySat, StormSat Egypt, PLC International, JumpTV.