Mobile 3G License Granted to Vodafone Egypt

His Excellency Dr. Ahmed Nazief, the prime minister attended, at the cabinet headquarter, the signing of the license granted to Vodafone Egypt for provision of mobile third generation 3G services. The license was signed by the National Telecom Regulatory Authority and Vodafone Egypt.

The license was signed by His Excellency Dr. Tarek Kamel, the Minister of Communications and Information Technology and the Chairman of the National Telecom Regulatory Authority NTRA, Dr. Amr Badawi, the Executive President of the NTRA and Mr. Ian Gray, the Executive President of Vodafone.

The license whose duration is 15 years, stipulates that Vodafone Egypt will start providing mobile third generation services, which makes it  the second company in Egypt to do so, yet this should take place after the third mobile operator (Etisalat Misr Company) does so, an arrangement that is expected to take place during the first quarter of this current year. The license also states that Vodafone will provide mobile 3G services to all over Egypt during five years as maximum.

According to the license conditions, Vodafone Egypt can use technologies of EDGE, HSUPA, HSDPA and UMTS to provide 3G services and this includes the provision of the following applications: video call, video messages, high-speed downloading of files and data transfer, high-speed internet services, MBMS services, Mobile TV, Positioning services and Push-To- View services. However approvals of concerned authorities for specific kinds of these services are requested.

As per the current license granted for Vodafone and which was signed in 1998, Vodafone Egypt has the right to introduce any new services that are licensed to any new mobile operator according to the same conditions. Therefore, the NTRA and Vodafone agreed to sign the 3G services license in return for 3.34 billion Egyptian pounds and 2.4% as fees from Vodafone annual revenues of the provided services. As per the auction specifications handbook of the third mobile operator,  Etisalat Misr, the third mobile operator in Egypt, was granted the license to provide 2G and 3G services in return for 16.7 billion Egyptian pounds and for 6% from the annual revenues of provided services, license conditions also stipulate that 3G services stand for 20% of the total license value (16.7 billion Egyptian Pounds), which is equivalent to 3.34 billion Egyptian pounds (the amount paid by Vodafone Egypt) and 40% of the annual revenues (6%) which stands at 2.4% (the rate agreed on with Vodafone). Vodafone also was provided the bandwidth 10 MHz in the frequency band 2 GHz to transmit 3G services.

New Quality of Service parameters, similar to those applied with Etisalat Misr (the third mobile operator) will be applied with Vodafone with the purpose of improving the quality of service provided to the subscribers.

The signing of the license was witnessed by His Excellency Dr. Youssef Boutrous Ghali, the Minister of Finance as the new license fees, which is up to 3.34 billion Egyptian pounds will be injected in the State treasury, similar to the third mobile operator license fees, in accordance with the Telecom Law #10 / 2003. These amounts of money will be directed to the development of several service sectors in Egypt for the benefit of the Egyptian citizen.

By singing this license, the Telecom sector contribution in the State Treasury during the years 2006 and 2007 has hiked to reach 20 billion Egyptian Pounds. These amounts come from the fees of the licenses granted to both the second and third mobile operators, which in turn proves that the services liberalization policy is bearing fruit. New services are provided to the consumer, new income is generated by the companies and new revenues are generated to the state treasury through the licenses fees.

It is worth mentioning in this regard that the granting of the 3G license in return of 3.34 billion Egyptian pounds and with 2.4 % fees from the annual revenues of services; an agreement which was signed by Vodafone, can be also granted to Mobinil in case it wished to sign the same license.

The agreement with Vodafone to pay this amount of money mirrors a sincere confidence in the growth of the Egyptian Market with the introduction of the third mobile operator, in the light of the fact that the mobile subscribers in Egypt have surmounted to reach 18 million subscribers with a growth percentage of 70%. The number is also expected to reach 30 millions by the end of 2010.

It is also worth mentioning in this regard that the NTRA is on the verge of setting a new final framework for liberalization of international gateway services by granting new licenses for international gateway services.