Kamel: international calling licensing postponed to May
CAIRO: The government is studying further liberalization of the telecommunications sector including offering a second fixed-line license and floating another 20 percent stake in Telecom Egypt (TE) in 2009, Minister of Communication and Information Technology (MCIT) Tarek Kamel said Wednesday.
Kamel’s comments came on the sidelines of a one-day Euromoney investment conference for Egypt held in London. The minister also announced the offering of two international calling licenses will take place in May. Kamel had announced in December the licenses were to be offered no later than Q1, 2007.
TE’s international calling monopoly ended legally in December, 2005 and the National Telecommunication Regulatory Authority (NTRA) has promised the release of the two international licenses as early as January, 2006. Still, the offering was never made as critics charged the 80 percent government-owned company continued to enjoy official protection.
NTRA Vice Chairman Sherif Genina says the authority considers TE’s interests “a factor in the timing of the expected offering, but “it’s not everything. Speaking to The Daily Star Egypt, Genina said the expected entrance of Etisalat Egypt as third mobile operator has altered previous calculations for the timing of offering the licenses.
Earlier this month, TE reported final 2006 results showing a 15.7 percent increase in net income to LE 2.4 billion on the back of an 11 percent increase in operating revenues to LE 9.5 billion.
To counter the effects of losing its monopoly on providing the service, TE began implementing several measures in late 2006 including increasing its stake in VFE to 45 percent via a stock market buyout and offering discounts ranging from 6 percent to 12 percent on international bills from LE 3,000 to LE 6,000. The company also announced it is looking for more opportunities to expand regionally beyond its involvement in Algeria’s second fixed-line network construction.
HC Brokerage Telecom Analyst Walaa Hazem says regulators continue to delay offering international licenses because they are unsure of the best way to move forward, whether to hold an auction or award them according to pre-set conditions to existing mobile network operators.
NTRA Chairman Amr Badawy announced this week the authority is ready to negotiate awarding the licenses to existing mobile operators but did not set a timeline. TE’s announced “strategic partnership with Vodafone Egypt (VFE) at the end of last year gave VFE an increased share of international calling revenues and put the company out of contention for its own license. Etisalat, on the other hand, has already announced it has reached a preliminary agreement with the government for the acquisition of an international calling license once it is offered.
On the sector liberalization front, Hazem said TE’s numbers indicate the market is currently saturated and would prove too expensive for an additional operator. TE’s subscriber base grew from 10.4 million to 10.8 million in 2006.