Egypt - Telecommunication Services: An emerging market (Strategy, Performance and Risk Analysis)
Mobile subscriptions increased at a 0.2% CAGR during 2012-2016 and is expected to grow at a 4.3% CAGR over 2016-2021. As a result, mobile subscriptions penetration is expected to increase from 104.0% in 2016 to 116.8% by 2021. Growth is attributed to an increase in mobile phone adoption together with individuals holding multiple subscriptions. Mobile service revenue accounted for an 84.2% share of total telecom service revenue and is expected to increase to 87.7% by 2021. Mobile revenue declined at a -4.6% CAGR during 2012-2016 but is expected to increase at a 5.4% CAGR over 2016-2021 due to demand for mobile data services.
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Vodafone Egypt enjoys the leadership position for mobile
Vodafone Egypt’s market share rose from 41% in 2012 to 42% in 2016, with subscriptions posting a CAGR of 0.4%, from 39.8 million in 2012 to 40.5 million in 2016. the company also registered the lowest churn rate of 27.8% in 2016.
Low broadband penetration
In 2016, 41.2% of the total population were internet users however only 5.2% had internet accounts. The total internet users grew at a CAGR of 5.4% during the review period and will post a forecast-period CAGR of 5.2% to reach 53..3% in 2021. Telecom Egypt plans to spend US$400 million on fiber networks to drive broadband connectivity.
Infrastructure is one of the major requisite for technology growth and expansion. The government allocated US$463.4 million to infrastructure in 2015, of which the majority was channeled to the fiber network. Telecom Egypt plans to spend more than US$400 million in 2015, on building a fiber network to encourage broadband penetration. A new unified license for the provision of telecom services is a key investment opportunity and bidding has attracted interest from potential new entrants such as China Telecom Corp. and Saudi Telecom Co.