National Telecom Regulatory AuthorityNTRATelecom Market in Egypt

OutlineNTRAs mandate and scope of workMarket OverviewFixedMobileInternetRecent Developments

Mission StatementThe ideal commanding the activities of NTRA is for it to become an active pace maker within the telecom sector, building capacity and reputation which allows it to be an independent and prudent arbiter among the different stakeholders in the sector; The industry, the state and the consumer.

To encourage national and international investmentswithin free competition rules is, by law, by outlook, and by aptitude, the core mission of NTRA Dr. Amr BadawiNTRA Executive President

Telecommunications Law no. 10 of year 2003Basis of Operation:Transparency; Open competition;Universal Service;Protection of users' rights.Dispute Resolution Committee: Handles settlement of disputes arising between Licensees.Mandate & Scope

Mandate & ScopeFrequency Spectrum SectorEconomic and Regulatory Affairs SectorMonitoring and Operation SectorPolicies, Research and Development SectorConsumer Issues and Market Surveying Sector

Market Overview

Fixed MarketFigures and IndicatorsFixed telephone penetration is 13.3%Fixed capacity is 14.45 millions lines.Fixed Telephone Subscribers 10.4 millions (April 2010) Fixed revenue was 9.9 billions EGP while net profits for 2009 was 3 billions EGP with 10% growth over 2008.Telecom Egypt is the incumbent with 20% floating in the stock market.

Fixed MarketFixed Market Revenue VS Profit

Mobile MarketThree Market Players:MobiNil started operations in May 19981st Q 2010 Subscribers 26.1mnVodafone started operations in Nov 19981st Q 2010 - Subscribers 25.5mnEtisalaat started operations in May 20071st Q 2010 - Subscribers 12.7mn

Mobile Market Figures and IndicatorsMobile penetration is 73% Mobile Revenues in 2009 reached around 26 Billions EGPMobile Subs expected to reach 110 millions (2013) with 128% penetration. Mobile Subs growth 45% in 2009, 40% in 2008 and 70% in 2007Mobile Internet users exceeded 5 millionsMobile broadband subscribers reached 550,000 users

Mobile MarketMobile Subscribers Growth

Mobile MarketMobile Revenues Growth

Internet MarketFigures and IndicatorsInternet penetration is 20.8% (1st Q 2010)There are 211 Registered ISPsInternet users are expected to exceed 40 millions by 2013Broadband subscribers are expected to exceed 2.5 millions by 2013Internet International Bandwidth is 48 GBHMobile broadband subscribers has reached 550,000 subscribers

Internet MarketInternet Users Growth

Internet MarketADSL Penetration Rate in 2009 ADSL Subscribers Growth

Recent DevelopmentsArabic Domain Name Registration License (.Masr)Telecom Networks in Closed Compounds LicenseLicense for Telecom Towers OperatorsNational Broadband Strategy

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*****Frequency Spectrum Sector: Manages the frequency spectrum and protect its scarcity. Issues licenses for the use of the frequency spectrum and wireless equipment. Evacuation of frequency bands needed for new services. Responsible for spectrum monitoring & inspection.Economic and Reg Sector: Issues and monitors operators licenses. Performs all sorts of economic analysis for cost, pricing and royalties. Monitors interconnection agreements between operators.The Monitoring & Operation sector mandate includes monitoring of quality of services, type approval and customer service.Policies, R&D sector: Manages competition regulations, universal services, research and developmentConsumer Issues and Market Survey sector handles consumer complaints, call center, societal interaction, consumer protection committee, quality assurance, consumer surveys and market research.

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Sources:Annual Report 2009BMINotice the Growth in revenues since 2002In 2009, however the decrease in revenues but Net profit grew by 10%

Sources:ML and TE financial statements

*- Growth rate has never been below 30% since 2004 .Varied between 30% to 70% from 2004 to 2009

Source: All these figures are extracted from the annual report for 2009 , which gathered the figures from the weekly status report delivered by the operators.*

Mobile Penetration end of Jan 2010

Source for the forecast is BMI (Business Monitor International)

*Etisalat entrance in 2007 has blown up the growth in the mobile subs to over 70% as shown in the illustrationEnd of 2009 the Subscribers numbers exceeded 60 Millions

Source: ML and Annual Report for 2009*In 2009 Mobile revenues exceeded 25 Billions

The growth rate is 33% in 2007, 24% in 2008 and 11% in 2009

Source:ML and Annual Report for 2009. *Sources :Forecasts from BMI and MCIT reports**- Government Initiatives that helped increase internet usage, Internet free numbers 0777, PC for every home. - The increase of ADSL subscribers was due to the decrease of the prices of ADSL in 2006, 2007 and 2009 under the government initiatives to increase broadband penetration. - 256kbps ADSL connection is for 45 LE monthly which is less than 10 USD a month. Sources: BMI, Annual Report 2009*- .Masr License: 3 Companies were awarded the license for the domain registrations, Egypt is the first arab country to register domain name in arabic characters.- Access in compounds: 16 Companies were interested in the closed compounds license and bought the RFP and two proposals were received.The License for Towers is still under development but it was announcedNational Broadband strategy: Aim to increase the usage of broadband throughout the country and reach rural and un-served areas.**