Communications Minister Tarek Kamel said the license would be for a 3G network that would start operations in the second quarter of 2007. Egyptian Company for Mobile Services (MobiNil) and Vodafone Egypt operate the only two mobile phone networks in Egypt.

Egypt has long discussed establishing a third network but said it would depend on the right economic conditions. Analysts say the number of mobile subscribers has increased recently due to improvements in the economy and rising consumer confidence. Kamel said the Egyptian regulator, the National Telecom Regulatory Authority (NTRA), had decided to call for companies to bid for the third license. He said Prime Minister Ahmed Nazif backed the plan after a review of economic and technical changes that "called for reviewing the delay in setting up a third mobile phone network."

"The presence of three companies will help widen the base of competition to realise higher quality in service and prices," Kamel said.

He believes that a third operator could secure 20% of the market within four to five years. Kamel also noted that there are now about 8.8 million mobile phone subscribers in Egypt. Most of Egypt's 77 million people live on a narrow tract of land around the Nile, making it relatively easy for a new operator to rapidly expand coverage. In 2004, the head of the regulatory authority said that the high concentration of Egyptians in a relatively small space meant that the country could probably sustain four operators.

Source: Reuters