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Monday, 20 June 2016

Orange Egypt confirms 4G to cost EGP 3.54 bn, international gateway EGP 1.80 bn

We have an official price tag for the 4G license, at least for Orange Egypt: Orange Egypt disclosed to the EGX on Sunday that a licence to provide 4G services will cost a total of EGP 3.54 bn, with 50% of the license fees being payable in USD. NTRA also offered Orange Egypt the chance to provide landline services for EGP 100 mn and a license to offer international gateway services for a further EGP 1.80 bn. Orange Egypt said it is assessing the proposal and will update the EGX accordingly before first week of August deadline. The news confirms reports we picked up last week; there has still been no official reaction from the other operators or from Telecom Egypt. Reuters has coverage in English.

Half of the 4G license fees will have to be paid in USD because of the equipment the government needs to import, CIT Minister Yasser El Kady told Al Mal, adding that 4G services have been delayed a number of years because the Egyptian Radio and Television Union had not agreed to release unused frequency. (Earlier reports had suggested the frequency was actually under military control.) A source from Telecom Egypt said mobile operators have the foreign currency liquidity to pay the licence fees from a number of sources, including fee income from using subsea cables. Mobile operators aside, Telecom Egypt’s CEO said his company is also prepared to pay the full licence fees, including the USD portion, according to Al Shorouk.

As for the international gateway licenses, Vodafone and Orange are reportedly not happy with the pricing, which has not changed since the defunct unified operator license, sources tell Al Borsa. Orange Egypt is particularly peeved as prices have risen by EGP 300 mn. Both companies plan to petition the NTRA to reconsider the prices, and Orange Egypt will ask to pay for the license in installments. A government source tells Youm7 that companies will not receive international gateway licenses until they first receive a 4G license.

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