Vodafone Egypt is preparing to purchase the technical equipment and devices needed to put its new frequencies into use, according to Ayman Essam, head of the company’s foreign and legal affairs section.
He said the company has pumped EGP 5bn of investments into the Egyptian market during 2020, but it faces several challenges. Perhaps the most difficult of these, according to Essam, is obtaining the permits and approvals necessary to build mobile towers. He said that the company is looking forward to the National Telecom Regulatory Authority (NTRA) issuing the new regulatory framework for the establishment of mobile towers.
Essam sat down with Daily News Egypt to review Vodafone Egypt’s upcoming plans, and outline the effects of the novel coronavirus (COVID-19) pandemic on business.
What have been the positive and negative effects of COVID-19 on Vodafone, and the mobile market in general?
COVID-19 had both a positive and negative impact. On the positive side, it is affected by the level of growth in the consumption of some services. At the same time, it has also negatively affected the market through the great pressure that has been placed on the network, and the increase in consumption despite the lack of sufficient frequencies.
But in general, the pandemic has proven that digital transformation is inevitable, and that the steps taken by Vodafone, whether through the Vodafone Cash service or other services, were a strong start that pushes other sectors to adopt technological solutions.
How has the pandemic affected the growth in subscriptions to Vodafone’s mobile wallet service?
Vodafone succeeded in addressing the challenges it faced in this period, as more than 80% of customer service employees now work from home, and even better than usual.
We have achieved great success in achieving financial inclusion and transferring money via mobile. Vodafone has acquired 65% of the total number of subscriptions to mobile wallets, according to estimates by the NTRA. With 14.4 million customers, Vodafone Cash is used by 9.4 million customers, and 86% of financial transactions take place through the Vodafone Cash platform.
Has COVID-19 changed the company’s priorities? What are the plans to increase use of Vodafone Cash?
The pandemic did not change the company’s priorities, but rather strengthened them. Vodafone was the first company that implemented digital transformation within its basic strategy, stemming from the company’s belief in digitising various services in order to facilitate the lives of customers.
We were one of the first companies to launch electronic payment services, among other services and solutions, which, with the existence of the coronavirus pandemic, proved to be a must for customer lifestyles.
For example, Vodafone Cash came as an easy, simple, and very safe solution for customers during the coronavirus period. The number of transfers to Vodafone wallets increased dramatically. Therefore, it cannot be said that the pandemic changed the priorities of the company, but it rather proved the success of the company’s strategy and plans to support the digital transformation process.
We have many plans to expand electronic payment services, including the conclusion of agreements and partnerships with a number of companies, banks, and government and private agencies. These will see Vodafone Cash plans expanded in terms of reaching the largest number of customers, and also providing a greater range of services.
What effect will Vodafone Egypt’s recently acquired frequencies have on improving the quality of mobile services?
Vodafone is always working to provide the best service to its customers, whether it is the Internet services, or its voice services. We invested and obtained new frequencies so that the company continues to provide full support to the Egyptian government in the digital transformation process, and to improve the quality of data and voice calls. The company’s investment plan also includes the purchase of equipment and technical devices that keep pace with the new frequencies for better coverage nationwide.
The new frequencies will also support the network, especially mobile Internet services and 4G applications, whose coverage rate on the network has reached 98% nationwide, in addition to enhancing the company’s revenues and its market value.
What challenges does the company face in the local market?
One of the most important challenges that the telecommunications market currently faces is the establishment of new towers. We, at Vodafone, are looking forward with excitement to the NTRA issuing the new regulatory framework for the construction of the towers.
The company faced three difficulties in building mobile towers to improve the level of service quality. Foremost of these was obtaining licences to build new towers to provide the necessary coverage to its subscribers, the length of the licence issuance period, and the number of approvals required to construct a single tower. This ranged from 21 to 24 approvals that sometimes take from six to 12 months.
Some residents also objected to the towers being constructed in their neighbourhoods, despite their complaints of poor service. Therefore, we must also work to educate the people of those areas on the importance of these towers to improve service for them.
What are the most prominent features of Vodafone’s plans in 2021?
In general, the company’s strategy in the coming period focuses on supporting the Egyptian government in transforming the country into a cashless society, by providing technological solutions. The company’s strategy focuses on three main pathways: achieving financial inclusion; infrastructure development; and digital transformation.
The company obtained 40 MHz of the 2,600 frequency from the NTRA at a value of $540m, which supports Vodafone Egypt’s investment plans during the coming period. This will take place in a way that clearly contributes to improving voice and Internet services. These new frequencies will contribute to providing unprecedented speeds in data transmission services to customers in addition to improving the quality of voice calls.
What is Vodafone Egypt’s total investment in the local market since its establishment in Egypt?
The total volume of the company’s investments after obtaining the frequencies reached EGP 65bn in the Egyptian market, of which EGP 13bn were funnelled in the last three years, and EGP 5bn during the current year.
Is competition in the mobile market fair, or does the market need more regulation?
The Egyptian market is fiercely competitive, because the infrastructure development processes have created great competition between companies. This will certainly reflect positively on service recipients in terms of service quality and prices.
Also, the Egyptian market has become not only limited to telecommunications companies, but in fact, companies operating in the information technology (IT) sector are currently playing a fundamental role. They are supporting telecommunications companies, in terms of providing operational systems for networks and communication towers, along with advanced smart services that enable users to get the best service.
How long will Vodafone Egypt continue to be a subsidiary of Vodafone International?
The discussions between the parent company and the Saudi Telecom Company (STC) began last January. The latest statement issued by the two companies confirmed that the STC had completed its due diligence with the continuation of discussions between the two parties. Since that date, we have no other information regarding the negotiations, especially since this matter is the responsibility of Vodafone International.
Over the past 20 years, during the period of Vodafone’s investment in Egypt, the shareholder structure has changed four times. During this period, Vodafone’s plans and objectives in Egypt were not affected, and the company continues to provide the best services to the Egyptian customer.