4G mobile networks will grow rapidly in Egypt over the next few years, driven by increasing smartphone adoption. While 3G will remain the dominant mobile broadband technology in the short term, 4G subscriptions will grow the fastest after 2018. This is due to declining smartphone prices making 4G-enabled devices more accessible. The availability of high-speed 4G networks will be necessary to support growing demand for bandwidth-intensive applications like mobile video and enable new opportunities for digital services. However, Egypt currently lacks commercial 4G/LTE networks, making it the only major market in the Middle East and Africa without this technology.

1. What will 4G mean for Egypt?
Paul Black
Director, Telecoms, Media& IoT
IDC META

2. 2
Mobile Data is growing fast!
Source: IDC MEA TSDB 2016
Egypt Mobile Connections 2015-2020 (000)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2015 2016 2017 2018 2019 2020
Mobile Voice Connections Mobile Data Connections
23%
-5%

3. 3
3G will be dominant access type in the short
term, but 4G LTE will grow the fastest
Source: IDC MEA TSDB 2016
Egypt Connections Type 2015-2020 (000)
• GSM will continue to decline at CAGR -18%
as subscribers migrate to 3G and 4G
networks
• Post 2018, as 4G enabled smartphones
become more readily available, 3G
substitution by 4G will accelerate
• In the short term, 3G will be the dominant
broadband access type driven by increasing
penetration of smartphones
• Post 2020, 2G relevance will diminish
rapidly, making a strong case for 2G
shutdown e.g. Telstra Australia has shut
down 2G network in December 2016
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2015 2016 2017 2018 2019 2020
GSM 3G Total 4G LTE Broadband Dedicated Dial

4. 4
Just like in UAE, smartphones will quickly
overtake feature phones
Source: IDC
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
2013 2014 2015 2016 2017 2018 2019 2020
Feature Phone Smartphone
Egypt Device Penetration 2015-2020 UAE Device Penetration 2015-2020
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
2013 2014 2015 2016 2017 2018 2019 2020
Feature Phone Smartphone

5. 5
Cost of smartphones will decline in US$ terms,
but will be increasing in local currency
Source: IDC 2016 Q3 Forecast
Egypt Smartphone Prices Forecast 2015-2020 (US$)
$ 0
$ 50
$ 100
$ 150
$ 200
$ 250
2015 2016 2017 2018 2019 2020
Smartphone Prices
• Prices in US$ terms will continue to decline, but will
increase in EGP by over 15% due to exchange rate
• Launch of mobile manufacturing plant may contribute
to making affordable smartphones more available
• Grey market will continue to decline due to scarcity of
foreign exchange
• Most of the distribution will continue to be dominated
by Independent Retail (IR), who control 75% of the
market

6. 6
Egypt is the only major market In Africa &
Middle East without 4G LTE
Source: IDC
Less than 20%
Between 20% and 50%
Between 50% and 80%
More than 80%
Coverage Indicators (% of the Population
“4G is a collection of wireless technologies
able to support data rates of 100Mbps to
1Gbps. LTE is a 4G mobile technology”

7. 7
Today’s applications need 4G LTE!
1984 2020
High
Low
TODAY
5G
4G - LTE
3G
2.5G
2G
1G
Analog Voice
Capacity
20021991 1999 2010
Digital Voice,
SMS
Packetized
Data. MMS
Broadband
Data
Completely IP,
Multimedia
Multimedia, IoT

8. 8
4G is a major enabler of the digital economy
4G provides a big boost to data traffic, most of that is video
Better support for M-commerce and multimedia services
Support enterprise mobility and workforce flexibility
Enables IoT applications such as Telemedicine & surveillance
Accelerates Telecom, IT & media integration

9. 9
What is LTE for? End User vs Operator Perspective
Fast browsing, downloading & uploading
Mobile video streaming
Real-time IP communications
Online gaming & Tethering Wi-Fi devices
Home broadband in under-served locations
Faster data rates, with lower latency: 10Mbit/s+
Higher capacity: More bits per Hertz than 3G/HSPA
New and better utilized spectrum
All-IP mobile networks paving way for FMC
Global interoperability - 3GPP/3GPP2 both adopt LTE for next-gen
Enterprise applications, e.g. Surveillance, distance
learning etc.
End User Perspective Operator Perspective

10. 10
4G will accelerate Telco Transformation &
enable new revenue streams
Enhance data offering – With LTE, service
providers are able to provide competitive data
services and increase contribution of data to
total revenue
Enables Telco & IT Convergence – better
capacity enables Telcos to provide basic IT
services such as public cloud services e.g. Office
365, storage, etc. providing additional revenue
Competitive SME proposition – Fixed LTE data
services targeted at SMEs enables mobile
operators to compete with Fixed services such
as Fttx with compelling proposition
Enterprise mobility services – better 4G
capacity drives adoption of Enterprise mobility
solutions especially in public, Finance, health
and other verticals
Prevent further ARPU Decline – LTE data
services helps Telcos improve service bundling
offerings which helps to slow down ARPU
decline especially in consumer segment
Digital Services – Better capacity provide
opportunity for Telcos to provide digital
services such as digital music streaming, IoT
services – surveillance & connected homes
Enable Telco & Media integration – LTE enables
mobile providers to provide digital media
services especially in the consumer segment
enabling new revenue streams
Services Bundling – LTE enables providers to
offer competitive bundles especially in the
consumer segment at flat rates and reduce
effect of OTTs

11. 11
4G LTE in other countries - MEA: Rapid growth in GCC
Source: IDC (2012). GCC = Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE; Other MEA = Algeria, Egypt, Jordan, Morocco, Tunisia
Egypt LTE Connections as % mobile connections 2011-2016
0%
2%
4%
6%
8%
10%
12%
14%
16%
2011 2012 2013 2014 2015 2016
LTEConnectionsas%ofMobileConnections
GCC Turkey South Africa Kenya/Nigeria Other MEA

12. 12
4G LTE in other countries – South Africa
Source: IDC
Telkom Mobile – South Africa
 Smallest of all mobile operators in South with 60MHz of LTE
spectrum in 2.3GHz band
 Provides popular fixed LTE and LTE-A services for consumer &
mostly SMEs
 Launched innovative fixed rate data centric bundles with voice
as added service called FreeMe bundles which have proved to
be very successful in the market with uptake of 170k in 2
months since launch
 Partnered with Multichoice, a media company, to bundle
premium VoD (ShowMax) service on both fixed and fixed LTE
bundles
 Plan to re-farm half of 1800MHz spectrum for LTE to improve
coverage especially in metro areas
 Betting big on data as a strong growth area especially in SME
and consumer segments with bundles that include free access
to OTTs
MTN – South Africa
 Second largest mobile operator in South Africa, and 2nd to
launch LTE services
 Re-farms existing 1800MHz spectrum to provide LTE in metro
areas as it awaits public auctioning of LTE spectrum by ICASA
 Provides directed LTE-A services in Affluent areas and normal
LTE services in other metro areas
 Responded to Telkom Mobile’s aggressive data offering with
own MyChoice data bundles that offer double the amount of
data at same price
 Zero rates data for its VoD services - MTN Vu - for MTN
customers
 Betting big on digital services with connected homes and
plans to introduce competitive data bundles on fixed LTE
services and Fttx
 MTN Digital specially looking at lifestyle & entertainment,
connected home digital services for consumer segment

13. 13
4G LTE in other countries – Kenya & Saudi
Arabia
Source: [IDC Enterprise & Service Provider Survey 2016], n = 161 (all enterprises) and 10 (all SPs)
Safaricom – Kenya
 Dominant mobile provider in Kenya with LTE license at the
moment
 Invested in marketing campaign promoting LTE data services
and customer awareness
 Launched first in affluent areas in Nairobi and are in the
process of expanding to other key towns
 Promote low cost LTE enabled devices and also launched a LTE
sim swap program to promote LTE uptake
 Introduced 4G data bundles at same price as 3G but offering
double the amount of data
 Soft relaunched its digital VoD service, BigBox, in partnership
with ShowMax from Multichoice for a better value proposition
Operators in Saudi Arabia
 All operators in Saudi, STC, Zain & Mobily, have 4G LTE
services launched in 2011
 Invested in pre and post launch market awareness campaign
to promote benefits of LTE services
 Have since experienced strong consumer internet penetration
as fixed LTE services become popular with consumer and SME
segments
 Introduced 4G LTE is metro areas in Riyadh and expanded to
other key towns
 4G LTE is mainly promoted a providing more capacity and
enhancing user experience
 No specific bundling with digital media content
 Promotion and bundling of 4G enabled devices to drive usage

14. 14
Towards 5G – Not standard yet, but we know the usecases
Source: [IDC Enterprise & Service Provider Survey 2016], n = 161 (all enterprises) and 10 (all SPs)
Mass Market Personalized TV with big data
analytics improving the video experience
Support interactive multimedia, voice, streaming
video & high HD TV
5G 3GPP
Approved
Broad Use-
cases
Enhanced mobile broadband1
Massive machine-type
communications - IoT2
Ultra-reliable and low-latency
communications
3
Higher speeds and capacity, data in Gbps
Network virtualization, agile and flexible – network
as a service to suit each usecase
Massive IoT & autonomous driving
Critical Machine Type Communication with remote
operation
5G commercial deployments are expected by 2020. We don't know exactly what 5G is yet. But we've reached the point where we
know enough about 5G to see what it will not be, and to get greater clarity about what it is likely to be.

15. 15
Drivers of demand: end user trends - Ubiquity: “Anything, Anyone,
Anywhere, Anytime”
Source: [IDC Enterprise & Service Provider Survey 2016], n = 161 (all enterprises) and 10 (all SPs)
Mass market
mobile multimedia
Enterprise
IT mobility & cloud
Both
IoT & m2m

16. Thank You!
16
Paul Black
Director – Telecom, Media & IoT
IDC META
pblack@idc.com