The Egyptian mobile phone market is too immature to support virtual network operators (VNOs), according to the country’s telecoms regulator.

VNOs, which use existing operators’ networks to sell their own mobile services, will not be allowed in Egypt because they would reduce the quality of phone calls for existing users.

‘The quality of service is not growing at the same speed

as the number of customers,’ says Olfat Abd el-Monsef, vice-president for policies at the National Telecoms Regulatory Authority (NTRA).

Egypt’s three mobile phone operators are all adding more than 1 million customers a quarter, but their network capacity has failed to keep pace.

The country’s largest operator, Mobinil, which is owned by Egypt’s Orascom Telecom, has agreed to pay $599 million for a 3G licence, which will allow it to grow further. It paid the first instalment on 29 October.

Mobinil decided to buy the licence in July after executives realised that its existing 2G network would run out of capacity in 2008 (MEED 13:7:07).

A further barrier for VNOs is the difficulty consumers experience when they move

between providers.

‘We need to get things like number portability and national roaming before we authorise VNOs,’ says El-Monsef.

‘The business cases for VNOs will present themselves when they are ready, but we do not think we are at that point yet.’

The NTRA has also decided against issuing licences for high-speed mobile broadband access, using Wimax technology, because the telecoms operators are not ready.

‘We had a public consultation and people were very enthusiastic but did not know much, so we decided to slow it down a bit,’ says El-Monsef.