Egypt is witnessing “a 50% increase in mobile internet usage at home,” said Vodafone Egypt former CEO Alexandre Froment-Curtil to a local news platform in April. This in addition to “a 40% year-to-date increase in traffic,” Orange Egypt’s Chief Enterprise Line of Business Officer Hisham Mahran told the same platform.

The growing divs are an indicator of the size and potential of the country’s mobile market. “Egypt is one of the largest mobile markets in Africa,” according to Egypt 2020 Report by Oxford Business Group (OBG) -a global publishing, research, and consultancy firm.

The latest divs of the number of mobile subscribers rose 1.51% Year on Year to stand at 96.19 million with a penetration rate of 95.05% in August 2020, according to the Ministry of Communications and Information Technology’s “ICT Indicators in Brief” released in September.

Of the 99.6 million mobile subscribers reported in September 2019, Vodafone Egypt accounted for 40 million, followed by Orange Egypt with 28 million subscribers (28%), Etisalat Misr with 27 million, and Telecom Egypt’s mobile subsidiary, WE, with 4.6 million.

 

Network upgrades

The nation’s four mobile telecoms providers are seen to be investing heavily in network expansion and infrastructure upgrades, aiming to provide a better quality of services.

In July 2019, Government-owned carrier TE announced it would earmark EGP 17 billion for 2019 and 2020 as part of an integrated operational plan to develop its international, core, transmission, and backbone networks across the country.

The funds are in addition to the EGP 26 billion the company invested between 2014 and mid-2019, according to OBG.

Four months later in October 2019, the operator revealed plans to install optical fiber in 20 million homes by 2020, Chief Financial Officer Mohamed Shamroukh said, according to Al Masry Al Youm.

TE has invested about $3 billion since 2014 in developing its infrastructure and replacing copper cables with fiber optic cables, Managing Director and CEO Adel Hamed told local press in December 2019.

He added the company will focus on two main fields in the coming period, namely digital services and global data movement.

Moving to Etisalat, CEO Hazem Metwally told local press in November that the operator will allocate EGP 5 billion to upgrade its network infrastructure and invest in advanced technologies in the country next year. The company will focus its efforts on improving data transmission, and integrating artificial intelligence, cloud computing, and internet of things technology into its network, Metwally added.

Etisalat had plans to invest EGP 4.5 billion in 2019 including EGP 3 billion to modernize its network, Metwally told Reuters back then.

In 2021, Orange eyes investments worth EGP 4 billion on network upgrades, Hisham Mahran, who is chief of the company’s enterprise segment, told local press in November. The company will allocate more resources to expanding its data transfer capacity and footprint in financial services, he said, adding that the company spent 80% of its investments this year on expanding its data transmission services to cover more regions across various governorates.

On top of that, Vodafone Egypt announced during the same month plans to inject some EGP 5 billion investments in network upgrades in 2020, External Affairs and Legal Director Ayman Essam told local press.

The operator already invested EGP 9 billion to upgrade the network over the past two years to develop the infrastructure and provide an outstanding quality of service to its customers that keeps pace with the launch of the fourth-generation services in Egypt.

 

Government plays a role

Not only the private sector but also the government is gearing up to develop the telecommunications network.

To further boost the operators’ capacity, the government provided more spectrum to operators. In November, Vodafone, TE, and Etisalat have snapped up nearly $1.2 bn worth of new cellular frequencies. Vodafone Egypt bought two 20-megahertz (MHz) bands for $540 million, while TE bought two 10-MHz bands for $305 million in an auction run in September by the National Telecommunications Regulatory Authority (NTRA), the regulator said in a statement.

The NTRA also confirmed reports that it had accepted last month a bid by Etisalat Misr for 20 MHz of bandwidth, saying that it had sold to the Emirati company two 10-MHz bands for $325 million.

According to the “MCIT Yearbook 2019”, the regulator is also working with Etisalat Misr on several telecommunications-related infrastructure development projects. These include an initiative to operate and provide mobile services in Bani Mazar in Minya, El Wahat El Bahariya Road in the west, Baranis in the Red Sea governorate, and Wadi Karkar in Aswan, among other areas.

In September 2019, the government announced that TE would begin working on a project worth around EGP 40 billion to develop the telecommunications network in the New Administrative Capital. Under the deal, TE will build and operate the city’s tech and digital security infrastructure.

To further enhance its telecommunication and internet services, in late November 2019, Egypt successfully launched its Tiba-1 satellite. According to the government, the satellite will remain in orbit for at least 15 years and will provide “every inch” of the country with call and internet services, as well as the Nile basin and other areas of North Africa.

This year, the government is also ramping up its fiber-optic installment to increase internet access to 75% of the population in 2020 for both mobile and fixed internet, CIT Minister Amr Talaat told a local news platform in April. The ministry hopes to add 1 million new homes to the fiber-optic network this year.

 

4G vs 5G

The introduction of 4G technology in 2017 has brought with it a higher quality of services. Four 15-year licenses were awarded by the NTRA to TE, Orange, Vodafone, and Etisalat in 2016, according to OBG’s 2020 report.

With the sale, Vodafone became the largest holder of spectrum in the country back then. According to the regulator, the licenses brought in $1.1 billion for the sector. In the years since services were launched, there has been a surge in data usage and new services on offer.

According to Cellmapper, a crowd-sourced website, in June 2020 Etisalat was the top-ranking company in terms of 4G coverage with 205 towers, followed by Vodafone (135 towers) and Orange (106 towers).

As for 5G, OBG noted the country is taking its first steps towards the launch of 5G, “which could open the door to the widespread use of internet of things, artificial intelligence and other next-generation technologies.”

The government and telecom operators are investing in the network upgrades that are essential for widespread 5G commercial services. In 2018 the NTRA launched broadband fiber optics, a necessity for 5G technologies.

Companies are following suit, with TE signing a deal with Swedish network and telecommunications company Ericsson in February 2019 to upgrade the Egyptian provider’s cloud core network to be 5G ready. The same month saw TE signing a memorandum of understanding with Finnish multinational Nokia to introduce a 5G network and test use cases.

In December 2019, Etisalat Misr tested 5G on a commercial network in partnership with Ericsson, reaching speeds of up to 1.4 Gbps.

According to the 5G Consumer Potential report by Ericsson, the global 5G consumer market could be worth $31 trillion by 2030, with communications service providers (CSPs) could earn $3.7 trillion of that total.

The report also estimates that CSPs could generate up to $131bn by 2030 from digital service revenues alone, by proactively bundling and marketing 5G use cases.

“5G will drive enormous opportunities for CSPs in consumer business over the decade,” said Jasmeet Singh Sethi, head of ConsumerLab, Ericsson Research. “As this journey is already underway, those CSPs that quickly and proactively evolve their consumer propositions are likely to be bigger winners.”

NTRA acting head Mostafa Abdel Wahed said in 2018 that the regulator could start selling 5G spectra to Egypt’s four mobile network operators as early as 2020.

However, last April, Minister of Communications and Information Technology Amr Talaat told local press said 5G is not particularly useful at this time. Few phones on the market now are 5G-ready and those that are cost over $1,000 — a price point that is not accessible to most consumers, Talaat noted. The government, however, is moving forward with introducing 5G for manufacturing and infrastructure, he highlighted.

Orange Egypt CEO Yasser Shaker, Telecom Egypt CEO Ahmed El Beheiry, Etisalat Misr CEO Hazem Metwally, and Vodafone Egypt’s External Affairs and Legal Director Ayman Essam each said to the same platform that Egypt has yet to fully make use of its 4G spectrum.

 

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