Egypt warns mobile operators on Ramadan deals

Egypt is threatening to punish mobile phone operators with a freeze on new customer lines if they keep prices lower after the Muslim holy month of Ramadan, newspapers reported on Tuesday.

The main operators and Egypt’s oldest mobile providers Mobinil and Vodafone Egypt have offered customers phone calls as cheap as five piasters (one cent) a minute during Ramadan, which ends Sept. 20.

Vodafone and Etisalat Egypt have also slashed roaming fees to about nine cents a minute for subscribers receiving calls from Egypt while on pilgrimage to Islam's holiest sites in Saudi Arabia.

"I have the power to freeze new subscriptions for those companies and to stop their expansions if they do not cancel their promotional offers by the end of Ramadan," Egypt's Minister of Communications and Information Technology Tarek Kamel said at Monday at a press conference.

"I am not against giving special offers in Ramadan, but I have to protect other operators as well," he said, referring to Egypt Telecom, Egypt's landline operator.

I have the power to freeze new subscriptions for those companies and to stop their expansions if they do not cancel their promotional offers by the end of Ramadan

Tarek Kamel, minister

Competition lowers prices

The company reported in July a loss of 1.5 million subscribers because of the low mobile prices, but Kamel said at a news conference on Monday that he was confident that they would renew their subscriptions, MENA reported.

The price of a call made from a landline to a mobile phone is 60 piasters (12 cents).

Mobinil, with 47 percent of the market share, and Vodafone Egypt are Egypt's oldest mobile providers. The third operator Etisalat Misr entered the market in 2006 and has about 13 percent share, adding to competition for lower income customers in particular.

Egypt Telecom submitted an official complaint to the Egyptian National Telecommunications Regulatory Authority, the former’s executive director Tarek Tantawi said in a press conference.

But ENTRA's president, Amr Badawi, sought to assuage concerns at a separate meeting with executive directors of the three mobile phone operators during which they discussed Ramadan specials, the daily independent al-Destour reported.

"This is a meeting we hold regularly and unlike the minister's meeting, it was not exclusively dedicated to Ramadan promotions," Badawi told the paper.

"The companies announced from the beginning that this offers are only valid through Ramadan, so they will go back to normal prices anyway."

The companies announced from the beginning that this offers are only valid through Ramadan, so they will go back to normal prices anyway

Amr Badawi, ENTRA

Market saturation

About 55 million of Egypt’s 80-million-strong population have mobile phone subscriptions, according to Kamel, who said the mobile market was almost saturated.

Analysts said in March that mobile telecom firms would see slower growth this year as the market for mobile phones in Egypt approached the saturation point.

EFG-Hermes said in March that subscriber growth could be cut by a third in 2008, with only 8 million new subscribers as opposed to 12 million in 2008.

Kamel added that the mobile phone market's growth was profitable for Telecom, which owns a 45 percent stake in Vodafone Egypt and signed a deal with the provider to transit international calls through its gateway services, the agency reported.

The deal is expected to bring in £4 billion pounds ($739 million) for the state-owned company over the next three years.