Mobile market review – Egypt 2011

The telecommunication industry of Egypt is one of the fastest developing sectors in the country, with 69.3 million subscribers by the end of 2010, which is estimated to reach 95.19 million by 2015. Since the establishment of the Ministry of Communications and Information Technology in 1999, the Egyptian telecom industry has ushered into an era of liberalized policies and new regulatory laws. In recent times, there has been a significant growth in low-income customer segment owing to stiff competition between various mobile operators, which has led to tariff reductions.

The mobile penetration in Egypt is rising annually by 27.11 per cent supported by strong government support, growing popularity of mobile internet, increasing business activities in the country and the entry of 3G services in industry. Once dormants are discounted, Egypt is estimated to reach a mobile penetration of over a 93.2%.

The Egyptian market has not been immune to the launch of the third telecom operator, which had that role of the “challenger” in the market raising mobile penetration whilst bringing prices down. Main mobile operators are suffering from significant downward pressure on pricing. This is offsetting healthy usage growth, leaving top-line growth trends anemic. YoY subscriber growth remains impressive, ranging between 20-30%. On a MoM basis, growth is trending towards flat, and as such, penetration growth is slowing.

Vodafone Egypt has ruled out a growth in revenues until year-end, even amidst strong subscriber acquisition, with the operator’s subscriber base reaching 34 million by the end of June. Telecom experts predict usage will pick up in early 2012 amidst Egypt’s first free elections in decades. The gap between revenues and general spending on network development and maintenance is widening, which is happening at the same time as cuts in call rates, a decline in roaming services caused by the setback in tourism, heightened competition and near-market saturation.

The Egyptian telecom market is expected to improve from the beginning of 2012, as telecom services usage increases due to political campaigning for elections. If you want to compare current situation with that of 2009, please follow the link: Mobile market review – Egypt 2009.

Enjoy the reading. CVA