The National Telecommunications Regulatory Authority said that it had awarded a 15-year 4G licence to Etisalat Misr for $535.5 million. Khaled Kandel / AFP
The National Telecommunications Regulatory Authority said that it had awarded a 15-year 4G licence to Etisalat Misr for $535.5 million. Khaled Kandel / AFP

Business

Etisalat Misr and Vodafone Egypt awarded 4G licences

The award of the 4G licences comes after months of sometimes fraught discussions and allows the companies to provide high-speed data to their mobile users.

John Everington

October 16, 2016

Etisalat’s Egyptian subsidiary has signed licensing agreements enabling it to provide 4G high-speed mobile data services in the North African country.

The National Telecommunications Regulatory Authority said on Sunday that it had awarded 15-year 4G licences to Etisalat Misr and fellow mobile operator Vodafone Egypt for US$535.5 million and $335m respectively.

A spokesman for the regulator said that the different amounts paid for the licences reflected the differing amounts and quality of the spectrum awarded to each operator, giving no further details.

The two operators also separately paid $11.3m for licences to offer a virtual fixed-line service in the country, according to the spokesman.

4G, offering high-speed mobile downloads and uploads, has been available from operators in the UAE since late 2011.

The new licence agreements for Vodafone and Etisalat come after Orange Egypt, a subsidiary of French operator Orange, was awarded a 4G licence at the end of last week for $484m, alongside a fixed-line licence for $11.3m.

State-owned Telecom Egypt was awarded a 4G licence for 7.08 billion Egyptian pounds (Dh2.91bn) in late August, half of which was paid in US dollars, marking its first entry into Egypt’s mobile sphere.

The award of the 4G licences comes after months of sometimes fraught discussions between the NTRA and the country’s operators, after the regulator initially set conditions for the new licensing regime in June.

The country’s three privately-owned operators declined to apply for 4G licences as recently as the end of September, complaining of high fees and the spectrum being offered of insufficient quantity.

The NTRA responded by floating the possibility of awarding the licences to outside parties, with Kuwait’s Zain, China Telecom, Saudi Telecom and Lebara all expressing an interest.

“For the continued development of Egypt’s telecoms sector and the potential economic and social benefits that it can bring to Egypt, it’s important that the earlier impasse over 4G LTE licensing seems to have been overcome so that the main mobile operators will be able to introduce the technology,” said Matthew Reed, a Dubai-based analyst with consultancy Ovum.

jeverington@thenational.ae

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One in nine do not have enough to eat

Created in 1961, the World Food Programme is pledged to fight hunger worldwide as well as providing emergency food assistance in a crisis.

One of the organisation’s goals is the Zero Hunger Pledge, adopted by the international community in 2015 as one of the 17 Sustainable Goals for Sustainable Development, to end world hunger by 2030.

The WFP, a branch of the United Nations, is funded by voluntary donations from governments, businesses and private donations.

Almost two thirds of its operations currently take place in conflict zones, where it is calculated that people are more than three times likely to suffer from malnutrition than in peaceful countries.

It is currently estimated that one in nine people globally do not have enough to eat.

On any one day, the WFP estimates that it has 5,000 lorries, 20 ships and 70 aircraft on the move.

Outside emergencies, the WFP provides school meals to up to 25 million children in 63 countries, while working with communities to improve nutrition. Where possible, it buys supplies from developing countries to cut down transport cost and boost local economies.

 

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”