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In our latest update of the Egypt Telecommunications report we have added some new sections concentrating on value added services (VAS) and mobile data. Although these segments of the market are in their relatively early stage in Egypt, thanks in the most part to low incomes, they will become increasingly important for driving new revenues. 2008 saw Mobinil launch 3G services, so now all three of Egypt's mobile operators are capable of offering mobile broadband, video calling and other services.
No solid data is yet available about exactly how many are taking up these services, but there have been reports of increased mobile internet browser usage, so the signs are reasonably good. However, it appears that this market segment is still too low to have much impact on ARPUs.
ARPUs, only reported by Mobinil and Vodafone, are falling. This however, has generally been because the prepaid segment, with its much lower ARPUs, had been growing faster than the postpaid segment.
The trend for the ARPUs of each individual group of subscribers has generally been upwards, as has that for the average monthly use of minutes. In the final quarter of 2008, however, these trends have been reversed and all have seen a decline. This is not a good sign for the operators. It may just be a blip.
Certainly the operators will be working hard to finish the right strategy to get spending going up again.
BMI is fairly hopeful that they can achieve this, although, given the deteriorating economic conditions and declining consumer confidence, things may get worse before they get better.
Following one of Etisalat's rare data releases, we now know that the third mobile operator had 7mn subscribers at the end of 2008, although we must admit that this is a suspiciously round number, it is the best information available. This is slightly lower than the total BMI was expecting, so we have slightly downgraded our total for the end of 2008. There were 44.726mn mobile subscribers at the end of 2008, giving Egypt a mobile penetration rate of 56.9%. Our forecasts have not been very greatly affected by this slight change, and remain largely the same.
As a result of the focus on expanding the coverage of mobile content and value added services, we have not concentrated in the fixed-line or internet markets in this update. These will be expanded on in the coming update. We have, however, renewed our forecasts for both sectors taking on new data from the National Telecommunications Regulatory Authority (NTRA), which show that both fixed-line and broadband subscriber bases were a little higher than expected for the end of 2008. However, we are still expecting moderate growth from broadband over the next five years, and moderate shrinking on the fixed-line market.
Egypt Telecommunications Report Q2 2009: http://www.companiesandmarkets.com/r.ashx?id=RKG3YF25582590
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