Egypt second fixed-line auction postponed until next year

Egypt’s regulator has postponed the bidding for a second fixed-line licence for the third time until late 2009, citing adverse international market conditions and rising inflation.

Telecom Egypt is currently the country’s sole fixed-line provider with 11.3 million subscribers, but net additions have dropped by 75 per cent since the first half of last year

The National Telecommunications Regulatory Authority (NTRA) had initially scheduled the bidding for June 19  this year, which was later rescheduled to July 29, and then again to September 18.

The regulator’s executive president, Amr Badawi, commented that the decision was made in light of the discussions that took place between the NTRA and the twelve companies that bought the specifications handbook, which includes Orascom Telecom, Atheeb, Alcan, Giza Systems, Etisalat, France Telecom, Ericsson and Alcatel-Lucent.

“The ICT international markets in Europe and the United States are facing major fluctuations due to the increasing inflation rates and the increasing prices,” the NTRA said in a statement on their website. “The ICT investments worldwide are accordingly shrinking. Therefore the decision was taken to postpone the license until a tangible improvement in the international market is witnessed.”

The NTRA said the bidding companies preferred to delay the auction for a year, especially as the setup costs for a second fixed-line network in Egypt could amount to US$1 billion.

Analyst at Cairo-based investment firm HC Securities, May Khamis, stated the move was an expected decision as the country’s sole fixed-line provider, Telecom Egypt, witnessed a 75 per cent decline in net additions in the first half of 2008 compared to the same period last year.