Telecom Egypt gets nation's first 5G license for $150M

It might be a little late to the party, but Egypt announced the granting of its first 5G license to great fanfare on Thursday, although the nation has taken the somewhat unusual step of assigning just one license to one operator, apparently eschewing an auction process, or at least the type of auction that has become familiar elsewhere in recent years.

Whether or not more licenses are to be awarded remains to be seen. As things stand, the National Telecommunications Regulatory Authority (NTRA) has granted Telecom Egypt the country's first license to install and operate a 5G network. The operator is paying US$150 million for the 15-year license, and is now on course to become the first operator to launch 5G-based services.

The way in which the license has been awarded does seem to have come as a moderate surprise to certain industry observers. For instance, local media reported in October last year that the NTRA could put licenses up for grabs by December 2023 or early 2024, and that it would do so through a tender. It was also reported that the licenses would start at $500 million.

The country has four major players — Orange Egypt, Vodafone Egypt, Etisalat Egypt, and Telecom Egypt — all of which were expected to bid in any auction or tender.

However, the four operators do own frequencies suitable for 5G services as the NTRA has already allocated TDD spectrum within the 2.6GHz band. In 2022, Orange Egypt paid $440 million for 30MHz, while NTRA previously allocated 80MHz to Vodafone Egypt, Egypt Telecom and Etisalat Egypt at a cost of $1.1 billion. Meanwhile, 4G licenses were granted to all four operators in 2016.

Africa calling

According to a 2023 report from GSMA Intelligence, Egypt is forecast to be the fourth largest 5G market in Africa by 2030 in terms of adoption, with 5G accounting for 33% of total connections. Morocco is expected to be in the lead with 70%, followed by Algeria with 45% and South Africa with 43%.

The report notes that as of September 2023, 27 operators in 16 markets in Africa had launched commercial 5G services. More markets are expected to follow soon, with operators in an additional ten countries making a commitment to launch 5G in the coming years.

As things stand, 5G services have been launched in South Africa, Madagascar, Seychelles and Togo (2020); Mauritius (2021); Zimbabwe, Botswana, Réunion, Tanzania, Nigeria, Kenya and Zambia (2022); and Mozambique, Gambia, Uganda and Ethiopia (2023).

To be sure, 5G is currently at a nascent stage in Africa, with an adoption rate of around 1% of total connections. This is expected to grow to 8% by 2026 and 22% by 2030. Enhanced mobile broadband (eMBB) and fixed wireless access connectivity remain the dominant 5G use cases initially, but there are opportunities with music, video and digital gaming as well as B2B services.