CAIRO: Preparing for the entry of a second fixed-line operator next year, the National Telecommunications Regulatory Authority (NTRA) approved price changes to telephone calls and installation fees.
Telecom Egypt slashed fees for installing new lines and for calls between landlines and mobile phones while increasing some charges for telephone calls on landlines by almost 50 percent.
The NTRA announced the approved prices – effective as of July 1 – and the reasons behind the changes at a press conference Wednesday.
“These changes were made to compliment the economic changes in the telecom industry and to meet the transformation in user traits, Amr Badawi, NTRA executive chairman explained.
The price increases are in line with the high rates of inflation, which hit 21.1 percent in May and saw prices of basic commodities and services increase by around 20 percent.
But while hikes in fuel and food prices were met with anger on the streets, the increases in telephone charges did not stir much controversy in the public.
In announcing the changes, Badawi started with the beneficial changes now offered to landline users, decreasing the fee of installing new lines from LE 500 to LE 250 for residential subscribers and from LE 1,000 to LE 500 for businesses.
The 50 percent decrease is meant to encourage newlyweds and new businesses to obtain landlines at cheaper prices, he said. Low-income families can pay this fee in installments.
Telecom Egypt previously offered promotional discounts for landline installation to encourage new subscribers.
With the increase in the number of mobile subscribers – which has reached 34 million and is expected to rise to 45 million in 2009 – the charge for calls between mobile phones and landlines is now LE 0.30 a minute at all times, down from LE 0.45 at peak times and LE 0.35 at off-peak times.
The cost of direct-dial inter-province calls at peak times decreased 20 percent to LE 0.16 a minute for distances greater than 60 km and LE 0.08 a minute for shorter distances.
This change aims to make it easier for families living in different governorates to communicate, Badawi said.
He concluded the announcement with the only substantial price increase implemented, raising the charge for local calls to LE 0.03 after the first minute, up from LE 0.02.
The 50 percent increase was not explained, however, analysts say that Telecom Egypt is expected to lose a large portion of its profits after liberating the international calling service, which it has monopolized for years.
The entry of a second fixed line operator next year will create competition and will lead to more losses in subscribers for Telecom Egypt.
The government has set July 29 as the deadline for bids for the second fixed line license.
Telephone charges are currently subsidized, the Ministry of Communication and Information Technology said, with the true cost of a call standing at LE 0.05.
Users were previously charged less than half the true cost of the call, which prompted the price adjustment.
The price changes, however, will not be applied to the free internet service – 0777 or 0707 numbers – in a bid to encourage citizens to use the internet at no extra charge, Badawi said.
The last price amendment made to telephone calls was in March 2006.
