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Wednesday, 13 July 2016

NTRA to charge telecoms 6% of their annual revenues in fees under 4G framework, Orange Egypt objects to NTRA negotiating on Telecom Egypt’s behalf

The three existing mobile network operators will pay a consistent royalty to the state of 6% of their annual revenues within two-to-three years of obtaining their 4G licenses, according to a CIT Ministry source. By Al Mal’s count, the NTRA will generate c. EGP 1.8 bn for the state’s coffers based on combined annual revenues Vodafone Egypt, Orange Egypt and Etisalat Misr of c. EGP 30 bn. The three operators currently pay a royalty ranging from 5-6% annually. There is still no confirmation on the royalty Telecom Egypt would pay as the fourth player to arrive at the party. Orange, Vodafone, Etisalat and Telecom Egypt will also have to pay EGP 360 mn annually to offer fixed-line services under the 4G framework agreement, which will allow the regulator to net EGP 2 bn per year from the framework. The source added that the NTRA has no intention of extending the deadline to bid for 4G licenses after the first week of August.

Meanwhile, Orange Egypt is appealing a ruling by the Administrative Court that allows the NTRA to negotiate on behalf of Telecom Egypt with mobile operators to use its infrastructure. The ruling, which was apparently issued by the court on 21 June but is only now making the rounds in the media, affirms the NTRA’s role in approving pricing in contracts between companies operating in the telecommunications sphere as well as oversight of independent negotiations between telecom players, Al Masry Al Youm reports. Orange says NTRA is intervening in a commercial matter and should not be party to negotiations between companies, according to Al Borsa. We noted yesterday that the fixed-line monopoly had asked the regulator to negotiate on its behalf with the three current mobile network operators on both what TE charges the operators to use its infrastructure as well as the fees Telecom Egypt will pay to piggyback on mobile operators’ towers when TE obtains a 4G license.

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