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September may be crucial month in telecommunication sector - Daily News Egypt

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September may be crucial month in telecommunication sector

Although the four mobile telecom companies, Vodafone, Orange, Etisalat, and Telecom Egypt received the 4G licence, the National Telecommunications Regulatory Authority (NTRA) has not announced a final date to activate the service. The four companies redistributed their frequencies and began the pilot operation of the fourth generation services in preparation for obtaining NTRA approval to …


Although the four mobile telecom companies, Vodafone, Orange, Etisalat, and Telecom Egypt received the 4G licence, the National Telecommunications Regulatory Authority (NTRA) has not announced a final date to activate the service. The four companies redistributed their frequencies and began the pilot operation of the fourth generation services in preparation for obtaining NTRA approval to officially launch the service.

Yet, sources at the NTRA say that the service will be approved in September. Moreover, the telecommunication sector expects a number of decisions that will be discussed in the coming period.

Launching of Telecom Egypt (TE) mobile service

After several attempts to obtain a mobile licence, Telecom Egypt officially announced that it will launch mobile services in September. The company received a licence to install and operate the fourth generation mobile phone network in Egypt worth EGP 7.08bn, allowing the company to enter the mobile phone market.

The company was qualified to enter the competition of the mobile market, with the three other telecommunication companies. It is expected to present many offers on mobile lines to attract the largest number of customers.

In addition, a company official announced that a number of the company’s mobile lines were received and supplied to the stores in preparation for launching them in the market.

The number of TE land line subscribers amount to 6.55 million users in April 2017, up from 6.09 million in April 2016, a growth of 7.48%.

The number of centrals across Egypt stood at 1,550 in April 2017, compared to 1,435 in April 2016, according to a report by the Ministry of Communication.

Applying VAT on Internet

One of the most important decisions to be implemented in September is the application of the value-added tax (VAT) on the Internet service at 14%. The VAT Law exempted the Internet services for a period of one year from the application of the law in September 2016, as one of the list of exempted services that included 56 goods and services. The tax will be imposed on the Internet, starting from 6 September.

Internet companies have not yet announced how to apply this tax to prices, whether it will be borne by the consumer, or the company.

The total number of subscribers to high-speed ADSL Internet access reached 4.05 million consumers in April 2016, up from 3.32 million in April 2015, registering a growth of 21.99%.

Launch of the 4G services

Everyone is waiting for the official 4G service launch, since it will remarkably improve the internet service quality in Egypt and will enable users to run more applications on smartphones at high speed.

The NTRA has announced in August that mobile companies will complete their frequency allocations within 10 days from the beginning of the month. The company noted that 4G services will be soon launched, but did not specify a final launch date.

Increased prices of mobile services

The three mobile operators Vodafone, Orange, and Etisalat have called upon the NTRA to approve increasing mobile services amid the decline in profits. The revenues of the three companies have plummeted following the price hikes post-flotation of the pound in November 2016. The companies have since sought to increase their service costs, especially as their tools and equipment have become more pricey since they are imported from abroad with hard cash.

The NTRA, however, did not clarify its position from the demand and asked the companies to present their view on the prices and profitability.

Starting from July, 1% of the extra credit was deducted from the recharge cards because of the application of the VAT and increasing its rate to 14% up from 13%.

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