Cairo plans 4G licence sale as monopoly targets mobile

Egypt plans to sell fourth-generation mobile licences within two months in a spectrum allotment that would allow fixed-line monopoly Telecom Egypt Company to also offer wireless services in the country, a government official familiar with the matter told Bloomberg.

Telecom Egypt would start by offering mobile services using rivals’ networks if it secures one of the 4G licences, said the Telecommunications Ministry official, who asked not to be named because the results of a meeting of the national telecommunication regulator held on Sunday are still private.

The plan replaces an earlier one that some mobile operators threatened to fight in international arbitration. Mobile carriers, including local units of Vodafone Group Plc, Orange SA and Emirates Telecommunications Corp., were concerned that a new competitor would eat into their market share, the telecommunications regulator said at the time.

Egypt’s government will not let the situation escalate into threats of arbitration this time and has been seeking feedback from the carriers and working to settle disputes with Telecom Egypt, said Ahmed Adel, Lead Telecom Analyst at Beltone Financial. The 2014 plan to issue a virtual licence would have let Telecom Egypt provide mobile services while the existing wireless carriers would have provided fixed-line services.

Telecom Egypt, which is 80 percent owned by the government, is encouraged by recent government talks over the licences and hopes to offer mobile services in the “near future,” it said in a statement on Monday. 

Representatives from Vodafone Egypt and Telecom Egypt said they have not received official communications yet from the government over the 4G licences. Representatives from Etisalat Misr and Orange Egypt were not immediately available to comment. Orange Egypt Chief Executive Officer Yves Gauthier said in March that if the government allows its fixed-line operator to offer mobile services, mobile operators should be allowed to sell fixed-line services.

“The development of this offering will depend on the pricing for the licences for Telecom Egypt as a new operator and how other operators evaluate it,” Adel said. The carriers will also seek something in return for opening the market to another rival, he said.