registration document France Telecom 2009 - Orange.com

6 OVERVIEW
overview of the Group’s Business
OF BUSINESS
Egypt
With the fi xed-line telephony penetration rate falling and the
development of broadband Internet still very limited, the mobile
penetration rate continues to increase, offering potential for
growth in data and Internet activities on the mobile network.
Alliances and integrations are changing the telecommunications
market landscape, as the various players shift towards a
strategy of convergence, and competition between mobile
operators extends to the Internet market, business solutions
and, potentially, fi xed lines.
The mobile penetration rate was 71.9% as of end 2009, with
55.4 million customers, a 34% increase year-on-year. This big
increase refl ects the more aggressive approach taken by the
market’s three operators to acquire new customers, which
helped expand the overall market. The Egyptian market is
dominated by prepaid customers (97% of the total). Operators
are increasingly extending their offers into the market’s lower
segments, by cutting connection rates, selling inexpensive
mobile handsets and allowing customers to top up their
cards with small amounts. This enables operators to extend
their presence into rural areas, but tends to bring the average
revenue per user (ARPU) down. Operators are also continuing
their progression within middle class customers.
The Competitive Environment
Z MOBILE MARKET SHARE
5.5%
44.3%
50.2%
8.6%
42.7%
48.7%
12.1%
42.1%
45.8%
2007 2008 2009
Etisalat
Vodafone
Orange
Source: National Telecommunications Regulation Authority (NTRA)
ECMS, partially owned by France Telecom, was the fi rst operator
to launch mobile services in Egypt, under the Mobinil brand. As
of December 30, 2009, ECMS had the biggest market share
in prepaid offers and post-paid alike. Vodafone Egypt entered
the market in November 1998, under the ClickGSM brand.
Vodafone is well placed in the high value-added customer
segment, thanks to the launch of its 3G network in 2007. Etisalat,
a subsidiary of Etisalat U.A.E., is the market’s third operator,
which entered the market in May 2007. In 2009, Etisalat gained
market shares at the expense of Vodafone and Mobinil, thanks
to the launch of a very attractive offering featuring a fl at price by
the minute, to all networks.
Regulatory Environment
Regulatory Framework and Authorities
The Egyptian telecommunications sector is ruled by law no.
10/2003 of February 2003.
The Minister of Communication and Information Technology
defi nes telecommunications policy.
The National Telecommunications Regulatory Authority (NTRA)
is in charge of telecommunications regulation.
Mobile Communications
Z 2009 KEY EVENTS
January 1 3G: t he NTRA failed to deliver the 2.5 MHz
frequency block in the 1800 MHz band
provided for in the Mobinil 3G license.
April 15 GPS: The NTRA approved GPS use in Egypt.
August 9 Mobile call termination rates: t he
NTRA proposed a decrease in Mobinil call
termination rates (from 11 PT to 8.5 PT).
October 1 Licensing: t he NTRA to grant two licenses
to install and operate telecommunication
networks in closed locations.
November 8 Handsets: t he NTRA has requested that all
mobile operators deactivate the lines using
unauthorized Chinese handsets.
November 12 Mobile number portability: a greement
reached on the fi nal directives for the
Corporate MNP.
November 15/18 Internet Governance Forum: t he
overall theme of this forum was “Internet
Governance: Creating Opportunities for All”.
November 19 8GHz in the Red Sea: t he NTRA gives
Mobinil a license for MWL in the 8 GHz band
in the Red Sea area.
December 28 Numbering Plan: t he NTRA announces
the increase of the current national mobile
numbering plan capacity in Egypt.
3G
In addition to the 3G License, and in accordance with the NTRA
letter to Mobinil of October 2007, Mobinil was to receive an
additional 2.5 MHz frequency block in the 1800 MHz band by
January 2009. The NTRA put off implementing this measure, so
Mobinil suspended the payment of the second 3G license fee
(750 million Egyptian pounds) that was due on January 1, 2009.
This additional bandwidth is a strong requirement for Mobinil
in order to increase its spectrum capacity and to provide more
services.
GPS
In April 2009, the NTRA Board of Directors issued a number of
decisions concerning the usage of Global Positioning System
(GPS) devices in Egypt. Mobinil is allowed to introduce new
services and products that are dependent on GPS applications.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM