October 1999

Egypt Master Report

I. General Background

1. General media and telecommunication policies

1.1 Media Policy

The market for Radio and TV is partly monopolised by the state-owned Union of Radio and TV of Egypt which consists of 13 TV stations and 11 radio channels. The market for broadcasting TV and radio programs is monopolised, whereas the market for subscriber TV is liberalised.

The existing radio and TV stations fall under the jurisdiction of the Minister of Communications. All relevant licenses are issued by the Radio-and-TV Union.

All operating stations have to comply with the code of conduct described in the laws mentioned in the regulatory framework section.

1.2 Telecom policy

Voice telephony, data transmission, the Internet provision service and telecommunications equipment provision are monopolised by the state-owned "Telecom Egypt", the Egyptian Telecommunications Company. Telecom Egypt (formerly Arab Republic of Egypt National Telecom Organisation "ARENTO") was established under law 153 of 1980, and is a government organisation which operates under the supervision of the minister of transport and communications.

However, the market for certain services (mobile telecommunications and pay-phones) is liberalised. Currently, there are two mobile telecommunications service providers, namely "Mobilnil" and "Click GSM (Misrphone)". In addition, two private companies involved in pay-phone services were identified, their names being "Nile Telephone", and "Menatel".

Meanwhile, there is a strong movement headed by the Egyptian cabinet towards the deregulation of telecommunications, which would consequently lead to the complete liberalisation of the entire telecommunications sector.

2. Institutional structures in charge of the regulatory issues

2.1 Ministry in charge

• Media: The number, geographical coverage, broadcasting frequencies and power of radio and TV stations operating in the country, and licensing of new such stations are under the responsibility of the Ministry of Information and Media. The Radio and TV Union, a state-owned authority, is reporting directly to the said ministry.
• Telecommunications: Both the liberalised telecommunications sector and "Telecom Egypt" fall under the jurisdiction of the Ministry of Transport and Communications.

2.2 National regulatory authority

• Media: The Union of radio and TV which was established under law 13 of 1979. It is a dependent authority that follows the directions of the minister of Information and media. It is managed by a board of directors from different ministries (information & media, planning, foreign affairs, commerce) and from the House of Representatives.
• Telecommunications: There is no specific telecommunications regulatory authority. All relevant laws are passed by the country’s House of Representatives.

2.3 Frequencies allocation authorities

• Media: Union of radio and TV of Egypt
• Telecommunications: Egyptian Telecommunications Company (Telecom Egypt)

2.4 Public communications operator

• Media: The Union of Radio and TV acts as the sole state media operator in Egypt. The Union currently maintains 13 TV channels and 11 local radio stations all of which are state-owned. In addition, the union established the Egyptian Satellite Company "Nile Sat" with 6 Egyptian specialised channels.
• Telecommunications: Telecom Egypt is the sole telecommunications provider for voice telephony, telecommunications equipment provision, and Internet services provision in Egypt. It is a government organisation, falling within the jurisdiction of the Ministry of Transport & Communications.

3. International relationships and agreements

• Media: The Egyptian radio and TV union signed the first Arab 5-year agreement with the satellite radio company "World Spice" to use 3 satellite channels via "Afristar" which digitizes their transmission and relays it to the Arab region and Africa. There are also a number of agreements with major satellite companies e.g. Intersat, Alphastar, Utelsat, Panamsat,etc. to transmit Egyptian satellite channels (ESC I, ESC II, Nile TV, Nile specialized channels) to Europe, United states, Africa and the Arab region.
• Telecommunications: Telecom Egypt relies on introducing new technologies and expanding its capital without the significant increase in labour through the formulation of agreements with major multinational companies such as Alcatel, Ericson, and AT&T.

4. Regulatory framework

4.1 Historical overview

• Media: The market for radio and TV is partly monopolised by the Egyptian Radio and TV Union, which operates 13 subscriber TV stations, 11 radio channels and one cable TV station called CNE. In this respect, there are no privately owned broadcasting TV stations in Egypt. The only liberalised part of the said market is the subscriber TV where two private channels operate ("Pioneers", and "Orbit").
  
• Telecommunications: Telephone services were first introduced in the late 19^th century.

In 1918, the Egyptian telephone and telegraph administration was established and operated until the founding of the Egyptian telecommunications organisation in 1957.

The Arab Republic of Egypt National Telecommunications Organisation (ARENTO) was established under law 153 in 1980. In 1998, it was renamed as "Telecom Egypt". Telecom Egypt operates under the supervision of the Minister of Transport and Communications as the sole provider of certain telecommunications services in Egypt.

4.2 Present general legislation

• Media: Media law 13 of 1971 grants full monopoly over the information and media sectors to the Egyptian Radio & TV Union.
• Telecommunications: The basic telecommunications law is law 153 of 1980 which granted full monopoly to Telecom Egypt for all telecommunications services.

4.3 Key legislative measures

Media

Telecommunications

4.4 Issues

4.4.1 Liberalisation

4.4.2 Licensing

• Media: Egyptian radio and TV union
• Telecommunications: Telecom Egypt

4.4.3 Universal service

Media: Radio and TV programs are broadcasted to Europe, North America, Africa and the Arab region via the Egyptian Satellite "Nile Sat" (which was launched in April 1998) and other satellite companies such as Intersat, Alphastar, Utelsat, and Panamsat.

4.4.4 Tariffs policies

• Media: Each TV station sets its own tariffs for advertisements according to the estimated level of viewership.
• Telecommunications: The Minister of Transport and Communications through the board of directors of Telecom Egypt recommends telecommunications tariffs to the Council of Ministers (Cabinet). Once approved, the Council puts them in effect by a ministerial decree.

Mobile telecommunications service providers maintain their own tariffs.

II. On-going developments

1. On-going developments in institutional structures

In 1977, the telephone system was severely congested and became virtually obsolete, as a result of the cable networks being in poor condition. The telecom network consisted of 375,000 lines of switch equipment therefore the expansion of the telecom infrastructure was essential. Transmission networks were increased from 8,900 in 1981 to 90,000 in 1994, fibre optic cables and digital switches replaced copper ones. From 1981 to 1992, the number of telephone lines increased 4 times at 17% per annum, and in 1996 the number of telephone lines reached 4.2 million.

The capacity of telecommunications networks increased from 160 circuits to 3680 in 1991. In 1996, the number of international circuits nation-wide reached 5560.

In 1996, Telecom Egypt announced the establishment of new venture for operating GSM telephones. In November 1997, Telecom Egypt invited qualified international companies to submit proposals for the implementation, financing and operation of a second GSM 900 network.

2. On-going developments in the regulatory framework

Telecommunications liberalisation

The process of liberalising non-basic services started in November 1997.

In the first quarter of 1998, Telecom Egypt finalised the concession of the pay-phone service to two private companies, and of the mobile telecommunications service again to two private companies, and proceeded with the privatisation of the state-owned GSM network.

From 1995-1996, the Egyptian government has stated to issue licenses for VSAT terminal distribution, Internet services provision, pay-phone and local information networks to private companies.

In the near future, the government intends to start the privatisation of Telecom Egypt, selling 10% of the company’s stocks by the end of this year and another 10% by the end of next year. Of the total number of stocks to be sold, 33% would be directed towards the local market, while the remaining 67% towards international investors.