Opinions varied about withdrawing from imposing a development fee on mobile lines, after newspapers quoted government statements saying that studying the withdrawal option is taking place.
Ayman Essam, head of Vodafone Egypt’s Foreign and Legal Affairs Department, said that the Ministry of Finance must cooperate with companies working in the market, as well as the National Telecommunications Regulatory Authority (NTRA), in order to regulate communications, before taking a market decision.
He added in a statement in June: “We were surprised to hear the decision of the Ministry of Finance to impose a development fee of EGP 50 on new mobile lines without coordinating or conducting studies with mobile phone operators, all of which negatively impacted market sales. This also does not mean that it is acceptable to make a decision to withdraw from enforcing the decision without any coordination with the companies working in the market or the NTRA, because this all affects the market stability .”
Imposing the development fee has contributed towards reaching better control over the mobile line sales’ process, as sales declined, this helped ensure accurate registered data, whichs is an important issue as it involves national security, Essam believes.
He also called for coordination with companies before making any market-related decisions in order to avoid negative repercussions.
Parliament passed the amendments to the provisions of the law of resources development fees, including imposing a new fee for EGP 50 on buying a new mobile phone line, in addition to a monthly EGP 10 on mobile bills. Imposing the new fees began since the start of the current fiscal year (FY).
Telecom Egypt (TE) was the exceedingly harmed by the decision to impose the development fee, because it is the new provider of mobile services, and is still in the phase where it is attempting to expand.
For his part, a TE official said that the company suffered from the negative repercussions of the development fee imposed on mobile lines because TE is a new mobile operator, and what happened reduced the chances of growing their customer base. The Ministry of Finance’s decision to revoke that decision is a positive step, but more official steps are still expected in that direction.
Some newspapers have quoted government statements about the possibility to look into cancelling the fees imposed on new mobile lines, and the implementation of the decision started earlier this FY.
The mobile market in Egypt lost about 764,700 subscribers in June, compared to May 2018, reducing the number of subscribers from 96,400 in May to 95,400 in June.
According to the indicators from the Ministry of Communications and Information Technology, the three companies, Vodafone, Orange, and Etisalat have lost many customers this month.
Vodafone recorded the highest rate of customer loss among the three companies in June, losing about 345,800, with subscribers dropping from 42 million in May, to 41.7 million in June.
Orange lost about 225,600 customers in June, down from 31.3 million in May to 31.1 million in June.
As for Etisalat, it lost about 193,100 customers in June, making the number of its customers drop from 19.9 million in May 2018 to 19.7 million in June.
The Internet market lost about 1.6 million in June compared to May 2018.
For his part, Khaled Hegazy, the executive head of the Institutional Sector at Etisalat, said that imposing this fee on such an important service as the communications service is hard to understand. It is not a luxurious commodity, but a rather a basic service. Additionally, the development fee was imposed on government services offered by the state to citizens, so why are mobile line fees included in this law?
The new claw caused a significant increase in the price of mobile lines, as their prices reached nearly EGP 77, compared to only EGP 15 before the new development fee. This is expected to have a further negative effect on the sale of new lines.
