Egypt Telecommunications Report Q4 2017
BMI View: The overall outlook for the Egyptian telecoms sector remains positive with significant organicgrowth prospects still available in the mobile sector, and the 3G/4G segment, in particular. We have madesome positive forecast revisions to our outlook and we expect increased competition in the fixed and mobilesectors in 2017 and over the next five years to 2021. The mobile market has recovered from the losses seenin 2014 and 2015, with three operators combined adding an impressive 3.1mn subscribers in 2016 and anadditional 2.55mn subscribers in H117 alone. Telecom Egypt (TE) and the three established mobileoperators Orange, Vodafone and Etisalat Misr, are expected to launch 4G services in Q417, increasingcompetition in the mobile sector and spurring mobile data growth. Two other factors may affect telecomsmarket dynamics in 2017: we do not yet know if or how the currency devaluation of Q416 will impact on thesector and TE's anticipated sale of its 45% stake in Vodafone could result in a new investor entering themarket.
TE will become Egypt's fourth mobile operator, having secured a 4G licence in August 2016. Although afour-player market brings greater choice for consumers, the incumbent's launch may start a period of veryaggressive pricing which will drive down operator revenues and impact badly on average revenue per user(ARPU) levels, which grew in 2016.
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