Telecom Egypt gets preliminary approval from board to buy 4G licence

Cellular antennas on tower

Telecom Egypt said it has been given preliminary approval by its board to buy a 4G licence, in a move that could pave the way for the country's state-owned landline operator to enter the mobile market and for mobile operators to sell fixed-line services.

Reuters reported that the next step would be to present the 4G licence plan to the incumbent operator's investment committee.

After some delay, Egypt now appears to be moving ahead with plans to issue 4G licences to the market's incumbent mobile operators as well as Telecom Egypt. Reuters also previously reported that Kuwait's Zain has expressed interest in gaining a 4G licence in the market.

Orange Egypt announced in June that it had been asked to pay EGP3.54 billion (€357 million/$398 million) for a 4G licence. The operator added that Egypt's National Telecommunications Regulatory Authority (NTRA) also requested that it pay EGP100 million for a fixed-line licence, and a further EGP1.8 billion to offer international calls.

Telecom Egypt appears to face a bill of EGP7.08 billion, which would cover the cost of its 4G licence and also 2G and 3G licences, Reuters reported previously. Banking sources told the news agency earlier this month that the incumbent was in talks with banks to secure a loan worth EGP5 billion to acquire a 4G licence.

Reuters has also said in earlier reports that the NTRA has already approached all three of the country's mobile operators regarding bidding for a 4G licence, while Daily News Egypt stated that the government aims to launch 4G services in the back-half of 2016.

In July, however, the GSMA raised concerns that sufficient planning had not been made with regard to the spectrum requirements for 4G licences.

"It is not yet clear if sufficient spectrum will be made available on terms that will encourage rapid and large-scale investments in 4G networks and services," the association said.

The GSMA said its international experience shows that the total amount of spectrum assigned to each operator for 4G needs to be in the range of 2x30 MHz to 2x60 MHz, across a range of coverage and capacity bands, with a minimum contiguous bandwidth of 2x10 MHz in each band.

An added complication is that Telecom Egypt also still owns a 45 per cent stake in Vodafone Egypt.

In June, a telecoms industry source told Reuters that the government had dropped a requirement for Telecom Egypt to sell its holding as part of its licence conditions. However, a separate industry insider told the news agency that Telecom Egypt is still likely to sell the stake in the long term, when the value of the holding is favourable.

For more:
- see this Reuters article

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