Egypt to offer two triple-play telecom licences

Telecoms

Egypt is to invite bids for two licences for "triple-play" cable, telephone and Internet services which it expects to generate $1 billion in new investments within five years, the communications minister said this week.

The addition of triple-play operators would increase competition in Egypt's telecoms inndustry and could open the way to breaking state-owned Telecom Egypt's fixed-line monopoly in the most populous Arab country.

"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. Amr Badawi, head of Egypt's National Telecoms Regulatory Authority, told al-Arabiya television that the operators would be limited to working in Egypt's rapidly expanding new residential compounds in suburbs and satellite cities.

Kamel said operators would work in areas of 50 to 5,000 household units. He did not say if this would expand in future. 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.

The move will inject further competition into the telecoms market, where Telecom Egypt (TE) has already faced significant challenges from three mobile phone operators: Mobinil, Vodafone Egypt and Etisalat.

Egypt's telecom regulator said a year ago it had decided to postpone an already-delayed auction for a second fixed-line licence for a year, citing global market woes. It has yet to announce when it will resume that process.

The new triple play operators are likely to have to work with Telecom Egypt's existing infrastructure and the limited scope of the project, at least at first, could still leave Telecom Egypt's monopoly generally intact.

Reuters