Egypt on brink of issuing long-awaited converged fixed and mobile licences

Egypt's Ministry of Communications and Information Technology (MCIT) is preparing new joint licences that will enable operators to offer fixed and mobile services in the country.

 Atef Helmy, Ministry of Communications and Information Technology, Egypt

Atef Helmy, Egyptian Telecoms Minister

Telecoms minister Atef Helmy said Egypt's cabinet has approved the move, with details of the new licences to be released on Wednesday March 26. The aim is to clear operators to begin offering combined services by June 30, Reuters reported.

The long-awaited decision is tipped to be a boost for incumbent operator Telecom Egypt, which to date has been prevented from offering mobile services directly under the country's current licence terms.

A move into converged fixed and mobile services would enable the company to compete against Egypt's three mobile operators--Vodafone Egypt, Orange-owned Mobinil, and Etisalat Egypt--which have been eating into Telecom Egypt's voice revenues as consumers shun landlines in favour of mobile connectivity.

The incumbent operator grew net profit from 2.6 billion Egyptian pounds (€271 million/$373 million) in 2012 to 2.9 billion Egyptian pounds in 2013, although revenues from home services fell year on year while enterprise sales grew modestly. Telecom Egypt's international carrier and international cables and networks divisions each enjoyed strong revenue growth in 2013.

Vodafone Egypt has previously threatened to turn to international arbitrators if Egypt introduces unified fixed and mobile licences, but the operator's concerns appear to have been addressed in a recent meeting with Helmy, the Cairo Post reported.

During the meeting, the UK-based group detailed plans to invest 9 billion Egyptian pounds in Egypt and generate 3,000 jobs over the next three years.

Telecom Egypt's future involvement with Vodafone Egypt is less clear. The company currently holds a 44.95 per cent stake in the mobile operator, and CEO Mohammed El-Nawawy recently said it will seek to acquire the remaining 55.05 per cent or sell its current holding in Vodafone Egypt if unified licences are cleared, the Cairo Post revealed.

Separately, Helmy said the MCIT will create 4,000 jobs by June 30, and the contribution of the communications industry to Egypt's GDP will grow 8 billion Egyptian pounds to 60 billion Egyptian pounds in 2014, the Cairo Post reported.

For more:
- see this Reuters article
- see Telecom Egypt's 2013 results
- see this Cairo Post article on Vodafone's investment
- see this separate Cairo Post article on Helmy's pledge

Related Articles:
Telecom Egypt eyes local Vodafone unit
Vodafone looks to African business market for future growth
Telecom Egypt to get mobile licence this year
France Telecom edges closer to strategic Egyptian purchase of Mobinil

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