Boston, MA -- (SBWIRE) -- 03/11/2013 -- BMI View: Egypt's mobile market is fairly competitive, with three existing mobile operators all backed by major international players. However, the government is considering issuing a fourth mobile licence for a full network operator or a mobile virtual network operator (MVNO). While this move could increase competition in the mobile market, as well as generate much needed funds for the state treasury, we expect it to have negative impact on mobile ARPUs in the country, which already rank among the lowest in Middle East and North Africa.

Key Data

- The mobile market grew by 1.3% q-o-q in Q312 to bring total growth in 9M12 to 12.5%.
- The fixed-line sector contracted by 2.1% q-o-q in Q312, to reverse growth of 0.9% in the previous quarter.
- The number of internet users increased by 1% q-o-q in Q312, according to regulatory data.

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Risk/Reward Rating

Egypt dropped one place to 12th position on our Rusk/Reward Ratings (RRR) table this quarter. The country scores below the regional average in three of the four categories of our ratings table. Egypt's lowest score was in the Industry Rewards category, which reflects its relatively low ARPUs. It's underperformance in the Country Rewards and Country Risk score also reflect the impact of the political and economic uncertainty on investor confidence and private consumption growth outlook.

Key Trends And Developments

An ambitious national broadband development initiative looks set to be delayed as Egypt's political and business environment continues to be plagued by unrest and change. It is unclear whether the US$2.4bn 10- year plan will now proceed as originally envisaged. The wide-ranging initiative - which would be privately and publicly financed - envisages, among other things, replacing Telecom Egypt's ageing copper last mile infrastructure with fibre over a period of almost four years. This will achieve minimum broadband access rates of 2Mbps for at least 90% of the population by 2015 and replacing telecom operators' service-specific licences with more general universal service licences (enabling mobile operators to provide fixed-line services and fixed-line operators to offer mobile services).

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