The pyramids will oversee 70 million subscribers
Egypt is the largest emerging mobile market in the Arab-speaking world with 73 million inhabitants and a strong potential for growth. Mobile was launched in 1999 and penetration now exceeds 42% (probably <30 M subscribers due to multi SIMs) and is forecasted to double( estimate 68 million subscribers) in next 5 years as 3G brings cheaper voice services in the country . Compared to other countries in Middle-East / North Africa, Egypt has the highest annual growth at 170% but third lowest mobile penetration after Lebanon and Syria but may rise to the levels of Algeria, Morocco, Tunisia with similar GDP per capita. The other growth opportunity is in the fixed network development currently at 15% tele-density and 10.5% internet access. (Egypt ‘s 17 Gbps internet backbone access was disrupted in January 2008 by cuts in submarine cables.) As broadband wireless is an access option, the regulator introduced consultations on WiMax and issued 3G licenses .End of duopoly : usage up, tariffs down
Competition has increased throughout the Middle-East with 3 mobile operators per country in Egypt, Saudi Arabia, Kuwait and Jordan. In Egypt, Orascom and Vodafone, controlled the market until 2007 when a new license was awarded to Etisalat. This resulted in a 50% cut in prices to 0.35 LE/min and a decline of ARPU from 15$ (82 EGP) in 2005 to10$ (58 EGP) in 2007. Mobinil and VFE blended ARPU fell by 20% and 12% respectively but low tariffs increased minutes of use to by 15% to MoU to .Again in April 2008, Mobinil announced new price cuts. We expect the operators will have to cut costs by sharing of investments in infrastructure or introducing MVNO retail channels. In addition, the fixed-line monopoly of Egypt Telecom is challenged by the regulator (NTRA) auction of second fixed-line license auction in June 2008. Etisalat and Orascom are possible candidates for this license. Egypt is also introducing number portability using infrastructure from Giza Systems and Telcordia
The following players operate in Egypt :
Orascom Telecom Holding (Mobinil)
48% market share
16 M + (Alohat per-second billing prepaid subscribers)
GSM 900Mhz, 1800Mhz and 1900Mhz, WCDMA 5MHz spectrum
Naguib Sawiris is the well known chairman and CEO of Orascom Telecom.
Vodafone Egypt Telecommunications
42% market share
14 M subscribers
GSM 900Mhz, 1800Mhz and 1900Mhz, WCDMA 5MHz spectrum
Etisalat Misr
10% market share (plans to capture 30% market in next 5 years)
2.0 M subscribers (3.5 M estimate mid 1008)
GSM 900Mhz, 1800Mhz and WCDMA 5MHz spectrum
Ericsson – based 3G HSxPA network covering major cities including Cairo, Alexandria, Zagazig, Tanta, Sharm el Sheikh, Luxor.
Telecom Egypt
Fixed : 11.2 M lines, penetration level < 15%,nhousehold penetration ~ 75%, ARPL ~10$
TE Data ADSL : 0.45 M subscribers (141% growth in 2007)
Internet 0.4 M subscribers (290 M minutes monthly usage, VoIP is illegal for consumers but it legal for corporate accounts through ISPs.)
Telecom Egypt owns 45% of Vodafone Egypt
3G internet + content for early adopters
Vodafone Egypt and Mobinil acquired a 3G license at a cost of 610 M$ each, 20% of Etisalat Misr 2G + 3G license cost. Like in other emerging markets, 3G business case in Egypt includes expansion of the voice capacity, internet access and new entertainment services.
3.5G allows internet access in the marekt underserved by Telekom Egypt (only 0.4 million ADSL subscribers). Already 24% of Egypt’s subscribers use their mobile to browse the internet according to Maktoob Research. Vodafone 3G offering for the for the enterprise sector includes “ mobile connect “ USB modem allowing a browsing and file exchange.
Early adopters are moving on to 3G data services and operators are promoting to high ARPU subscribers to compensate 2G ARPU decline. For an example of the interest by early adopters, check the blog of Tarek Ghazali in Cairo who hosted the carnaval of mobilists in Egypt Vodafone launched its 3G in the youth segment with video calling, mobile TV (1¢/min or 2.5$/month for 5 hours), and music downloads. Kamera's Egyptian subsidiary SweGypt provides a suite of mobile TV channels, including the Arabic news channel ShortCut, the sports channel SportCall and the entertainment channel WOW! TV. Kamera will also deliver highlights from the EURO2008 football championship. But only 12% of Egyptians are comfortable with the idea of watching live television on their mobiles, based on Maktoob Research market survey. Here is one of Vodafone's adds for 3G video calls.
Mobile advertising is also emerging : Vodafone launched the "Please Call Me" message which comprise a link to video ads or IVR announcements. 52% of subscribers say they are interested in receiving advertisements on their mobiles according to Maktoob Research. And mobile communities are also on the growth path : Vodafone Egypt has launched a student competition to stimulate development of social networking and entertainment services .
