{"id":587722,"date":"2023-05-31T00:00:00","date_gmt":"2023-05-31T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/how-telecos-are-coping-with-macroeconomic-headwinds\/"},"modified":"2023-05-31T00:00:00","modified_gmt":"2023-05-31T00:00:00","slug":"how-telecos-are-coping-with-macroeconomic-headwinds","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/how-telecos-are-coping-with-macroeconomic-headwinds\/","title":{"rendered":"How telecos are coping with macroeconomic headwinds"},"content":{"rendered":"

<\/span>Will economic conditions affect telecom players\u2019 ability to expand the sector\u2019s<\/span> infrastructure?<\/span> The devaluation of the EGP and rising inflation have led telecom service providers\u2019 operational costs to soar, leading many of them to request regulatory approval to hike their service charges and prices, according to industry sources Enterprise spoke with. These requests come as operators want to work on shoring up their networks and infrastructure to provide better-quality services, which could be held back if costs remain high, our sources say. <\/span><\/p>\n

Where our telecom + ICT network infrastructure currently stands:<\/span> We have 33.1k mobile<\/span> stations in the country, which cater to 102.4 mn active mobile subscribers, 72.6 mn mobile broadband subscribers, and 10.2 mn fixed broadband subscriptions, according to the <\/span>most recent data (pdf)<\/a><\/span> from the National Telecom Regulatory Authority (NTRA). Of these stations, around 6.4k were built between 2020 and 2022, accounting for 25% of all stations built during the last 25 years. Another 823 stations were approved this year to improve telecom service quality standards and capacity to accommodate the growing traffic volume in the Egyptian market. <\/span><\/p>\n

Service quality hasn\u2019t always been up to standard:<\/span> The NTRA handed out some EGP 32 mn<\/span>fines to cellular service providers<\/a><\/span> in 1Q 2023 for failing to meet quality standards. The authority has fined operators some EGP 350 mn over the past few years, with these fines being used to finance infrastructure works to expand telecom services to cover remote areas and new roads, NTRA head Hossam El Gamal said.<\/span><\/p>\n

But companies say they need to raise their prices to be able to improve quality:<\/span> Multiple<\/span> mobile network operators have asked for regulatory approvals to adjust their prices as they look to offset the impact of the devaluation and inflation, industry sources told Enterprise. Service providers have seen their costs rise by 60-70% over the last several months as a result of the macroeconomic conditions, and the industry relies on imported components, our sources say. These price increase requests have been pending since last October, however, with several meetings held between the operators and regulators but no final decision being taken. <\/span><\/p>\n

The scenarios on the table to ease cost pressures:<\/span> Operators are considering several<\/span> options, including raising their prices by 20-25% or increasing subscription and fees on top-up scratch cards, as well as increasing the number of SIM cards operators can sell, according to our sources. <\/span><\/p>\n

Meanwhile, operators are looking at alternative measures to slash costs<\/span>, including<\/span> increasing their reliance on renewable energy to cut down on electricity bills at their facilities. Orange, Etisalat, and Vodafone are all working on adding more renewables to the energy mix used to operate their cell towers and corporate buildings, with the companies looking at using a combination of diesel fuel, renewable energy, and mixed-fuel hybrid systems, sources from each of the companies who requested to remain anonymous confirmed to us. The operators have also received Electricity Ministry approval to source renewable energy at EGP 1.27 \/ kWh under a long-term contract, the sources and an official from the New and Renewable Energy Authority told Enterprise. In addition to reducing costs, this shift to renewables will also help companies slash their environmental footprints, Linatel Telecommunications CEO Hamdy Ellaithy told Enterprise.<\/span><\/p>\n

More frequencies could help on both sides of the equation:<\/span> Issuing tenders for more<\/span> frequency bands to allow telecom operators to expand bandwidth would allow these companies to provide faster services and improve quality while supporting heavier traffic, former CIT Minister Khaled Negm told Enterprise. Additional bandwidth would also allow operators to absorb more customers and increase revenue streams. The NTRA is set to issue a new frequency band for mobile operators in the near future, in addition to other unspecified decisions to support the sector, an NTRA official told Enterprise, without providing further details. <\/span><\/p>\n

<\/p>\n

\n

Your top infrastructure stories for the week:<\/span><\/p>\n