Zain, a Kuwaiti mobile and data services company, has sent an official letter to the Ministry of Communications and Information Technology expressing its desire to obtain the fourth generation (4G) licence and enter into the Egyptian market, according to an official at the ministry.
The source added that there are two other companies that have expressed their desire to obtain the 4G licence in the Egyptian market; however, the source refused to disclose their names as they have not yet sent official letters.
If none of the four mobile phone operators operating in the Egyptian market—Vodafone, Etisalat, Orange, and Telecom Egypt—apply for the 4G licence, it will be presented to foreign companies, added the official.
He continued that in the case that a foreign company receives the 4G licence, it would have limited options to offer its services in the Egyptian market. The foreign company may acquire one of the companies operating in the Egyptian market, or provide its 4G service virtually by using the wireless network infrastructure of local mobile phone operators, or apply to obtain a new mobile phone operator licence.
The official believes that the Egyptian telecommunication market has promising growth opportunities in the field of data transfer via mobile phones, especially since 5% of the mobile phones in Egypt are equipped for 4G services.
There are substantial opportunities for growth in the Egyptian market that indicate its ability to absorb more telecommunications companies.
He noted—to prove his point—that there are five telecommunication operators in Hungary, although the population does not exceed 10 million people, and there are seven telecom companies in South Korea.
The Kuwaiti company Zain sent on Monday a statement to the Kuwaiti stock exchange stating that one of its affiliates sent an official letter to the Egyptian Ministry of Communications to discuss the possibility of applying for the 4G licence.
In addition to 4G services, the new licence gives mobile companies the chance to provide landline services by obtaining minutes from Telecom Egypt and reselling them to customers through several packages.
The National Telecommunications Regulatory Authority determined the prices of the 4G frequencies to be EGP 3.5bn for both Vodafone Egypt and Orange Egypt, EGP 4.5bn for Etisalat Misr, and EGP 5.5bn for Telecom Egypt, with 50% of these values to be paid in US dollars. In addition, the price of the 4G licence would be separate from that of the frequencies.