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Egypt Telecommunications Report Q4 2011
Business Monitor International, Oct 2011, Pages: 96
BMI's Q411 update on Egypt's telecommunications market contains the latest operational and financial data for Q111. The new data have been published by fixed-line incumbent Telecom Egypt (which also publishes data for the country's largest mobile operator Vodafone Egypt) and Mobinil (which is jointly owned by France's Orange and Egypt's Orascom Telecom). Data published by Telecom Egypt and Mobinil help us determine the size of Egypt's mobile telephony sector at the end of June 2011. Meanwhile, the Ministry of Communications and Information Technology (MCIT) has published new data on the number of fixed-line, internet and broadband subscribers at the end of March 2011.
Based on figures published by Mobinil and Vodafone, and an estimate for Egypt's third-ranked mobile operator Etisalat Misr, we estimate that the country had 73.3mn mobile customers at the end of June 2011. Our estimate means that the mobile sector grew by 2.7% in three months to June 30. Although this growth rate was still relatively low, it was an improvement on the first quarter of the year, when the mobile subscriber base expanded by 1%. The weak performance of Egypt's mobile market in Q111 was due to the shutdown of the country's mobile networks during the period of political unrest in late January and early February.
The new subscriber data has enabled us to revise our forecast for the development of Egypt's mobile telephony sector through to the end of 2015. Our latest forecast envisages the mobile customer base expanding by 9% in 2011. By the end of the year, we expect the subscriber base to increase to just over 77mn, equivalent to a penetration rate of almost 90%.
This quarter also sees revisions to our mobile ARPU forecast for Egypt. Examined as a market average, we estimate that the mobile ARPU rate for Egypt fell by 13% in 2011 to reach EGP26.7 (US$5.3). Our longterm forecast for Egypt's blended ARPU rates is one of gradual decline. We believe that the rate of decline will diminish in the latter years of our forecast as the operators gradually improve their customer mix and establish more stable sources of income from the deployment of data services.
Data from the MCIT suggests that there were 8.19mn mobile internet users at the end of June 2011. However, not all of these are subscribers and not all of them are using 3G technologies. Our current estimate for 3G subscriptions at the end of 2011 put the number of subscribers at 6.96mn, representing approximately 9% of the country's total mobile subscriber base. The latest data and reports suggest that demand for mobile internet and data services is growing, and the operators announced new partnerships with value-added service developers. Between 2010 and 2015 we forecast average annual growth of almost 31% for Egypt's 3G subscriber market. By the end of our forecast, we believe there will more than 16mn 3G customers, 15.8% of the total mobile market.
According to the MCIT, there were 1.78mn USB modem customers at the end of Q111, up by 34.7% from the start of 2011. In the last few months, the proliferation of mobile broadband services, including those using USB modems, smartphones and other portable devices, has led to strong subscriber growth within Egypt's broadband sector. Increasingly, mobile broadband services are complementing and competing against broadband services based on ADSL. Between 2010 and 2015, BMI forecasts that Egypt's broadband sector will grow by approximately 30% a year. By 2015 we forecast a total market of about 20.77mn broadband subscribers, equivalent to a penetration rate of 22.6%.
Egypt remains in 11th position in BMI's latest set of Business Environment Ratings for the Middle East and North Africa (MENA) region. This is despite the higher scores which Egypt receives in the Industry Rewards and Industry Risk categories. Although Egypt receives a higher score in these two categories, it has been allocated a lower score in the Country Risks category during this quarter.
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