CAIRO (Reuters, Al Arabiya)
Egypt will invite bids for two licenses for "triple-play" cable, telephone and internet services and expects to draw investment of $1 billion within five years, the communications minister said on Wednesday.
The addition of triple-play operators would increase competition in Egypt's telecom sector and could open the way to breaking state-owned Telecom Egypt's fixed-line monopoly in the most populous Arab country.
" Our expectation is that this will attract within the next five years $1 billion of investments " Minister Tarek Kamel "This (tender) announcement will be issued formally tomorrow in the newspapers and will invite two players, two consortiums from local and international players, to invest in integrated triple play and in the future maybe quadruple-play telecommunication services," Minister Tarek Kamel said.
"Our expectation is that this will attract within the next five years $1 billion of investments," he told a conference in Cairo.
Bids would be due in January and the operators would start work in the second half of 2010. Egypt would not ask for a significant upfront payment but would want the operators to share 8 percent of their revenue with the government. |
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Ready for competition The move will inject further competition into the telecoms sector, where Telecom Egypt (TE) has already faced significant challenges from three mobile phone operators: Mobinil, Vodafone Egypt and Etisalat.
Last month during the Muslim holy month of Ramadan the private operators offered deep discounts, prompting the ministry of communications to warn against such sales after reports the TE lost 1.5 million subscribers because of the low mobile prices. |
" If triple-play services enter into the country, it will add to the competition " Nadine Ghobrial, EFG-Hermes Mobinil, which captures 47 percent of the market, and Vodafone Egypt are Egypt's oldest mobile providers, while Etisalat entered the market in 2006 and has about 13 percent share.
"If triple-play services enter into the country, it will add to the competition," said Nadine Ghobrial, telecom analyst at EFG-Hermes.
"However, TE was already ready for competition because a new fixed-line license was going to be issued and then procedures stopped because of bad market conditions during the past year.
"It can harm them a little bit, but I think they are quite ready for this," she said, adding the triple-play tender could be an alternative to tendering for a second fixed-line license.
Egypt's telecom regulator said a year ago it had decided to postpone an already-delayed auction for a second fixed-line license for a year, citing global market woes. It has yet to announce when it will resume that process.
The new triple play operators would likely have to work with Telecom Egypt's existing infrastructure in any case.
"The fixed services ... will continue to be done by Telecom Egypt but the operators, in this case the private (companies) that are coming in, can work ... with Telecom Egypt if both parties wish, on a commercial basis," Kamel said. |
