Crises Erupts Over Licensing of Third Mobile Company in Egypt
By Mohammad Baali
Albawaba.com – Cairo
Egypt’s two mobile companies, MobiNil and Click, are stepping up their criticism of Egypt Telecom for its plan to establish a third mobile company, accusing it of abandoning the principles of fair competition.
The criticism comes amid reports that Egypt Telecom will exempt the new company from licensing fees amounting to 3.5 billion pounds, which its incensed prospective competitors have already paid.
MobiNil and Click have threatened to resort to the courts if the state-owned Egypt Telecom does not commit itself to paying the same licensing fees.
MobiNil president Nageeb Sawires told Al Alam Al Yawm daily that permitting Egypt Telecom to establish a new mobile company without paying the licensing fees was a glaring violation of agreements signed between the two companies and Egypt Telecom.
Previously, the Egyptian government signed an agreement with both MobiNil and Click giving them a monopoly on the service until 2001.
However, as the expiration date for the monopoly has approached, Egypt Telecom has been preparing the third mobile company.
“The exemption of the new company from paying the initial licensing fees will enable it to lower the rates of its services significantly,” said Sawires. “This will have adverse effects on the other two companies and spur them to lower their prices, which in turn will lead to lower profits.”
Meanwhile, Click is gearing up to offer some of its shares on the Egyptian stock market next October.
If Egypt Telecom manages to establish a third company quickly and without paying the required fees, Click’s anticipated earnings will be lower, and therefore its share price could potentially be forced down, according to the daily - Albawaba.com