NTRA announces the conditions of offering an international telephony license to mobile-service providers

Amidst the policy of liberalizing telecommunication services in Egypt and according to Egypt’s international commitments with the World Trade Organization (WTO) and based on Law no. 10 for the year 2003, which states that Telecom Egypt’s monopoly over international telephony services must end by the year 2005, the NTRA has agreed to offer the license to international telephony services to any mobile service company that is willing to offer these services only to its clients and customers. Telecom Egypt’s right to offer international telephony services via carrier selection will be maintained, according to its license.

Based on this, the NTRA has put into place the conditions upon which to calculate the cost of adding the right to offer these services, to the existing licenses of the mobile-service providers, as follows:

1. The cost of adding the international telephony services will be proportional to the customer base of each mobile-service provider, as the license will only allow companies to offer these services to its customers and not to the customers of other providers. Thus, the cost of the license shall vary between the different service providers based on the number of customers each company has. The cost has been valued at LE100 per customer at the time of obtaining the license, with a minimum cost of LE100 Million – which is an amount that shall be paid only once, with the obtaining of the license.

2. A one-time fee of LE20 must be paid for every new customer that joins the mobile-service provider, to be paid annually at the beginning of each year. This annual royalty fee represents additional revenue to the NTRA proportional to the increase in number of mobile phone customers (regardless of the type of account he has with the company or whether he uses the service of international telephony or not). This revenue is expected to amount to approximately LE60 Million from every company of the three mobile-service companies over the next few years.

3.  In order to guarantee continuous revenue over the period of this service’s   license and so as not to burden companies with very high payments, the annual royalty fee is restricted to a maximum of 6% of the provider’s annual gross revenue. 

These conditions do not, in any way, affect NTRA’s right, in the future, to offer the second fixed-line operator the same rights that have been granted to the incumbent, Telecom Egypt, in offering international telephony services to the customers of mobile phone providers, whether directly or via carrier selection.

In this respect, Etisalat Egypt (the third mobile network) has embarked upon obtaining the international telephony license for its customers only through the mobile service and the NTRA has approved Etisalat’s request and has granted the license to the company based on the conditions and regulations mentioned above.

The remaining two mobile-service providers have been informed of the previously mentioned conditions for obtaining the license and both companies have indicated that they will specify their choice over obtaining the international telephony license, dependant upon the results of their ongoing negotiations with Telecom Egypt over reviewing the interconnection agreements between them, which is meant to conclude by the end of 2007.