Egypt’s government on Wednesday approved the release of unified telecoms licences, clearing the way for operators in the country to offer fixed and mobile services for the first time, albeit more than two months later than planned.
The government approval of unified licences means incumbent operator Telecom Egypt will be able to offer mobile services for the first time, while mobile operators Vodafone Egypt, Mobinil and Etisalat Egypt will be clear to begin offering fixed-line services in the market.
An original 30 June activation date for the licences passed, meaning the final approval is over two months later than planned. Telecom Egypt pushed for the unified licences in a bid to stem declining use of fixed lines in the country as consumers turn to mobile and web-based communications, Reuters reported.
The government also extended the time frame for Telecom Egypt to sell its 44.95% stake in Vodafone Egypt, giving the operator until December 2015 to offload the stake, Reuters added. Egypt’s regulator - the National Telecom Regulatory Authority - originally said the holding must be sold within 12 months of issuing the combined licences.
Telecom Egypt in May agreed to pay EGP2.5 billion (€268 million/$349 million) for its licence, despite the terms stating that the operator will not receive new mobile frequencies, including those covering 4G (LTE).
Although the unified licences allow Egypt’s mobile operators to enter the fixed telephony market, the decline in demand for fixed services means there is little incentive for the wireless operators to take up the option.
Telecom Egypt’s net profit in the six months to end-June slipped from EGP1.7 billion in 2013 to EGP1.5 billion in 2014, despite rising revenues. The operator showed signs of improvement in the second calendar quarter, however, with net profit of EGP1 billion compared to EGP895 million in the second quarter of 2013.