Telecom Egypt wants termination of its mandated subsidies

Telecom Egypt has formally requested termination of its LE100 million annual subsidy to ADSL service providers, an industry source told Al-Masry Al-Youm. The request was submitted to the National Telecommunciation Regulation Authority (NTRA).

The NTRA source, who requested anonymity, said the regulatory body feared the move could influence the cost of internet access for consumers. The source said the authority would therefore consider the request carefully.

Earlier this year, Telecom Egypt was able to terminate additional assistance to Internet Service Providers (ISPs), imposed on the company by the NTRA. The year-long assistance was mandated to help ease the burden of the current financial crisis.

Despite the revocation of additional assistance, ISPs currently receive nearly LE100 million in subsidies, with approximately 35 percent going to The Egyptian Company for data transfer, TE DATA. The rest is given to other ISPs with a maximum amount of LE30 million for each ISP, in accordance with NTA stipulations.

The mandated subsidies are a burden to Telecom, according to a company source. The Telecom official added that ISP's are now owned by mobile companies, and therefore no longer need assistance.

According to NTRA officials, Telecom requested the termination of its financial support of ADSL instant messaging services within a package that would include reduced prices for Mobile Instant Messaging. This offer is still under consideration.

Director of External Affairs for Vodafone Egypt, Khaled Hegazy said he would discuss this issue with NTRA head Dr. Amr Badawi during Badawi's meeting with mobile company representatives. Hegazy noted that termination of the financial assistance would have an effect on service prices.

Telecom Egypt faces strong competition from mobile companies. Telecom considers the recent Egyptian Company for Mobile Services and Subsidiaries' (Mobinil's) buyout of Internet Company LINKdotNET as the last chapter in mobile companies' ownership of ISPs. Telecom Egypt, therefore, considers this financial assistance as indirect assistance to mobile companies. 

Translated from the Arabic Edition.

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