Etisalat’s USD2.9bn mobile licence increases 3G costs for existing operators

The higher than expected sale price of Egypt’s third mobile licence has pushed up the cost of 3G concessions for existing operators in the country, according to number two cellco Vodafone Egypt. The National Telecommunication Regulatory Authority (NTRA) had previously stated that the cost of a standard 3G licence for any other operator wishing to upgrade their 2G concession would be equal to 20% of the winning bid for the third mobile licence. Earlier this week the regulator selected a consortium led by Etisalat of the UAE as winner of the combined 2G and 3G operating concession. The winning bid is reportedly worth EGP16.7 billion (USD2.89 billion), almost eight times the minimum offer, putting the cost of a 3G licence upgrade at around USD578 million. On top of licence fees, operators are also required to pay annual royalties to the state. Vodafone may now reconsider its Egyptian 3G strategy.