CAIRO: Nine years after first launching its operations in Egypt, MobiNil continues to be an everlasting success story enjoying solid growth in revenue, market capitalization as well as a strong subscriber surge and is moving forward in Egypt’s evergreen telecom market.
“Nine years on, and we are still the leading mobile company in Egypt, said Alex Shalaby, president and CEO of MobiNil, during MobiNil’s ninth anniversary gala. “We’ve always been a market leader throughout these nine years, and our intention is to maintain that leadership.
MobiNil has so far poured in LE 10 billion in capital investments alone, excluding operational expenses, covering 99 percent of the population of Egypt. It closed the quarter with a hefty 52.5 percent market share.
“However, this leadership comes at a price. He explained that in order to maintain this position in the market, MobiNil had to charge lower tariffs and was thus not as profitable as other operators. The company’s policy is to offer services at lower prices to attract a higher number of customers.
“We believe that expanding our market reach is a more sound approach, stated Shalaby. “Not long ago, [last April], MobiNil crossed the 10 million subscribers’ milestone, and we are now on our way towards further increasing that figure.
But perhaps MobiNil’s most anticipated news is whether or not it will muscle in on the 3G arena after Etisalat and Vodafone already rolled up their sleeves last month.
“Our board recommends acquiring the 3G license, and we expect to launch our 3G services in the near future, most probably before the end of summer, Shalaby predicted.
“3G is much needed first for the spectrum that we are running out of and second for its advanced technological services, added Shalaby, explaining that heavy traffic on MobiNil’s networks would inevitably force the company to deploy 3G services, which provide a much bigger frequency rate amounting to two gigahertz, which would optimize use of its existing 2G network stations.
“We want to operate on 3G networks, but we first have to guarantee its profitability, he said. “3G carries a very steep fee. [The license fee] is an impediment.
Shalaby believed that 3G services are not economically viable, given heavy costs of acquiring the license (LE 3.34 billion) and costs of deploying 3G network stations across the country, as well as the nature of Egypt’s consumers.
“From a business perspective, the Egyptian market is still premature and not ready for 3G services. The Egyptian market, he pointed out, comprised of two main segments. The first one uses phones for multipurpose applications other than voice but is very small and limited in number. The second one, which is the overwhelming majority, uses phones for voice applications only.
“The pillar application so far is the voice. And in terms of voice, there is no difference between 2G and 3G services, he confirmed. “Take the UAE for example. After two years of launching 3G services, penetration rate is still as low as 2-3 percent. And income rates in Emirates are 20 times higher than those in Egypt. All this reflects MobiNil’s decision not to venture into 3G services yet.
Despite the fact that Shalaby sees little potential for 3G services in Egypt’s current telecom market, he is very optimistic about Egypt’s mobile services market and believes that three isn’t a crowd in Egypt’s fast growing market.
“The market is booming and exceeds all expectations, he pointed out. “Penetration rates are growing at a fast pace. Last year’s forecasts showed that penetration rate was 23 percent; and this year, it is expected to range between 30-40 percent. A few years ago, penetration growth was at a single-digit rate.
