Mobile subscribers up; government share of revenues needed to fund infrastructure projects

Ahmed A. Namatalla
2 Min Read

Amr Badawy: negotiations ongoing with Mobinil on 3G license

CAIRO: The number of mobile and fixed telephone line subscribers continued to climb according to government expectations, a revised Ministry of Telecommunication and Information Technology (MCIT) report released this week said.

According to the report, mobile subscribers reached 17.2 million by the end of November 2006, up from the ministry s original estimate of 16 million. Fixed line subscribers reached 10.8 million, on track to hit 12 million by June of this year.

The government is counting on a strong year ahead for telecommunication companies in order to generate revenue to finance basic infrastructure projects in healthcare, water sanitation, education and transportation.

On Wednesday, Prime Minister Ahmed Nazif said the sector generated LE 20 billion in revenues for the government including the sale of the third mobile license for LE 16.7 billion, and royalty fees paid by both mobile operators as part of their licensing agreements. The entire sum, Nazif said, will be allocated to improving the country s infrastructure, including part of its LE 20 billion plan to bring extend the national sewage grid to neglected upper Egypt villages.

Less than 4 percent of Egyptians living in rural areas have access to the system, according to the United Nations Development Agency.

According to MCIT, the telecommunications sector is expected to generate strong revenues for the government due to the entrance of the third mobile operator and 3rd Generation services. In addition totheir standard revenue-sharing agreements, each of Etisalat Misr and Vodafone Egypt will pay an additional 2.4 percent of 3G revenues to the government. Vodafone signed a 15-year 3G licensing agreement earlier this week with the government for a LE 3.34 billion fee.

Mobinil is yet to reach agreement with the National Telecommunication Regulatory Authority (NTRA) over the price of acquiring the license, but NTRA Chairman Amr Badawy said negotiations are ongoing despite rumors they have broken down.

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