Boston, MA -- (ReleaseWire) -- 01/08/2014 -- Following several years of double digit growth rate, Egypt's mobile market is approaching saturation, with operators reporting slower net additions and increasing strategic moves aimed at encouraging existing subscribers to spend more and sway the subscriber mix towards postpaid connections. While we expect the market to continue growing, our forecasts show a sharp slowdown from 2013 onwards. Upside potential to these assumptions include the potential entrance of Telecom Egypt as a new player and the expected launch of MVNOs in the market. Nevertheless, strategies have already begun to change towards postpaid subscriptions and gaining a foothold in the enterprise market where revenues are higher and more stable.
- Mobile net additions were sharply lower than previous quarters with just 722,000 new connections.
- The fixed-line market fell to 6.84mn subscriptions at the end of September 2013 as active connections continue to fluctuate from quarter to quarter. Nevertheless, our forecasts expect decline in the long-term.
- Mobile broadband subscribers continue to grow rapidly, accounting for an ever larger proportion of the overall broadband market.
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Egypt held onto 11th position in our Risk/Reward Ratings (RRR) table. Having previously received an improved industry rewards score due to strong uptake of broadband services, jumping 2.5 points to 42.5, Egypt's scores remained unchanged this quarter. The country continues to be held back by its underperformance in the country rewards and country risks categories due to the impact of political and economic uncertainty over investor confidence and private consumption growth outlook.
Key Trends And Developments
Telecom Egypt's plans to launch mobile services by the end of September 2013 did not come to fruition, although its part ownership of mobile market leader Vodafone may be resolved in early 2014 as the latter's parent has offered US$2bn for the 45% stake held by Telecom Egypt. BMI believes a new competitor would be welcome into the market, although we do not expect there to be any considerable growth potential left in the market over the long term. Potential MVNO licences and Telecom Egypt's plans offer short-term growth potential to the market, but operator strategies are already changing to reflect the new market dynamics.
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