Pyramid Research: Egypt's instability threatens telecom development, yet opportunities remain

The recent political instability in Egypt had a positive short-run effect on telecom uptake; growth in telecom can continue if the future civilian government provides a suitable environment for development, according to a new report from Pyramid Research.

The recent political instability in Egypt had a positive short-run effect on telecom uptake; growth in telecom can continue if the future civilian government provides a suitable environment for development, according to a new report from Pyramid Research.

“Egypt: Political Instability Threatens Telecom Development, but Opportunities Remain” offers a profile of the country's telecommunications, media, and technology sectors based on proprietary data from Pyramid's research in the market. It provides detailed competitive analysis of the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and spread of new technologies, says a representative.
"As a result of the recent political instability that led to the overthrow of President Mubarak's regime, telecom use increased and was heavily utilized to gather the masses. The Egyptian telecom market generated US $6.4 billion in service revenue in 2010," says Hussam Barhoush, senior analyst at Pryamid. "Going forward, Pyramid still expects healthy growth--with revenue rising at a 4.2 percent CAGR from 2010 to 2015, it will still be one of the fastest-growing markets in Africa & the Middle East--but Egypt's peak growth phase has passed."
"The interim military rulers have promised elections and a return to civilian rule in September 2011," Barhoush indicates. "It is critical that the upcoming elections bring to power a strong government prepared to implement economic and policy reforms that lead to market liberalization, increased competition and strong growth."
The cellular sector remains the most lucrative and revenue-generating front in the market, according to the report. "Mobile revenue will continue to generate more than three-quarters of the total, with its share at 77 percent during the forecast period," Barhoush notes.
Egypt has a mobile penetration rate of only 60 percent. "Growth in data is outpacing growth in voice. This is true for the fixed and mobile sectors. In both cases, broadband is the key driver, with adoption of DSL and mobile broadband increasing steadily," says Barhoush.
"In a price-sensitive, predominantly prepaid market like Egypt, resisting churn becomes imperative for operators. Offering innovative, cost-effective services, such as mobile financial services, to end users is key for additional revenue, increasing customer loyalty and reducing churn," says Barhoush. Egypt has a relatively low urbanization rate, low banking penetration, and a relatively high mobile penetration rate (when compared with banking penetration), creating a sound climate for mobile banking services.
“Egypt: Political Instability Threatens Telecom Development, but Opportunities Remain” is part of Pyramid Research's Africa & Middle East Country Intelligence Report Series and is priced at $990.
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