Egypt: Value Added Services (VAS) And Licenses: Egyptian Regulations

Last Updated: 8 May 2018
Article by Youssry Saleh & Partners

The VAS services are services that are based on the content or format of the information that has changed in the content or body of the information it adds value to or provides integration between it and other services from Operational and/or administrative aspects, or those services that involve user interaction with stored information data.

The Egyptian market has witnessed a tremendous growth in the subscriber base in recent years. With a transformation of a mobile phone from a simple communication tool into an extremely powerful information and entertainment tool, mobile operators around the world are now turning from voice services to value added and data services, and Egypt is no exception. Where the value added services subscriber base in Egypt was expected to increase at an annual growth of 8.46% reaching 93.5%. As mentioned in the studies made for determining the VAS presentation, Egypt had a VAS presentation of 77% and was likely to increase reaching 92% in 2017 and according to a Sullivan Report on the Mobile VAS Market in Egypt, VAS revenues were likely to reach US$3.8 billion in 2017, while VAS and data services will contribute over 50% of the overall operators' revenues in Egypt.

The aforementioned increase in the subscriber base in the recent years was the direct cause of affordability, innovative and price-competitive services offered by the mobile operators. VAS Services including – for example, Text messages (Bulk SMS), video, images, and interactive services, where such services do not include telecommunications services such as voice-over services or access to the Internet.

One of the aforementioned VAS services, is the Bulk SMS which is intended to provide a service to customers for sending a certain text of one content to a number of end users in a specified period using SMS messages from licensed networks to provide mobile phone services within the Arab Republic of Egypt and to provide a service to customers to send a text to a single end user individually Using SMS messages from licensed networks operators/companies in Egypt.

Governing law and the official body responsible for regulating telecommunication services in Egypt including VAS services

The governing law for the telecommunication services in Egypt including VAS services is law No. 10 of the year 2003 on Regulation of Telecommunications, where the official body responsible for regulating the telecommunications sector in the Arab Republic of Egypt is the National Telecommunication Regulatory Authority (NTRA) which ensures that the needs of individuals, enterprises, companies and various sectors of the State are met, while encouraging investment in this sector on non-monopolistic foundations, on the basis of free and open competition between the best international and national experts.

The National Telecommunication Regulatory Authority (NTRA) at the start of year 2018 has issued and imposed the VAS services including the Bulk SMS license for some reasons, some of which is to implement the established policy for the development and diffusion of telecommunications of all types, in line with the development of communication technology, where it ensures that the needs of individuals, enterprises, companies and various sectors of the State – productivity and economy are met.

It is also encouraging investment in the communication sector on non-monopolistic basis, free and open competition between the best international and national experts, and in a manner, that ensures publicity and transparency of information, universal service and user rights protection.

Difficulties and procedures for obtainment of the VAS and Bulk SMS licenses

There are some procedures that should be followed by the person seeking  obtainment of the VAS licenses and services and practicing such activities, some of which are considered as forming obstacles for the licensee where they are shrinking the frame of practicing such activities.

  • Some of the aforementioned procedures is that the Licensee shall obtain the prior written consent of the Licensor for any service of the Value Added Services, before providing them to the users;
  • He shall connect his system with the authorized provider of the mobile services through (Virtual private networks) through one of the authorized companies to provide such services. The licensee is also obliged to adopt all required procedures to provide the required information of all parts of the system;
  • The licensee shall obtain all the required procedures and the institutional and technical steps needed to protect the confidentiality of the information related to the users, the clients and the movement on the network of the Licensee.

In case of providing the service of the Bulk SMS to users, the licensee is obliged to be the sending agent for SMS or MMS messages within the Arab Republic of Egypt; and shall undertake not to transmit international messages (originating outside the Arab Republic of Egypt) to the Arab Republic of Egypt using SMS or MMS services that the licensee sends to end-user within the Arab Republic of Egypt, he also is responsible for showing the name of the entity that sends the messages to all the end users. The licensee shall also send the name of the entity sending the messages preceded by the code EGY in all the messages sent to the mobile service providers before sending them to the end-user.

One of the obstacles that may face the entity seeking for practicing such services, is that the request for obtainment of such licenses may be rejected by the NTRA due to lack of sufficient experience in the telecommunication sector to the extent that makes him able to obtain such license.

As concluded from the aforementioned, mobile marketing is one of the most important matters whether in Egypt or in any country worldwide and one of the aspects that should be highly regulated, where such way of marketing depends on the mobile network user's personal data which are considered confidential and not anyone could be allowed to have access for such data, but if we compared the way of regulating such services in Egypt to other countries' regulation we will notice that there are some gaps that are not covered concerning such regulations in Egypt. Taking UK as an example where SMS text messaging is one of the highly regulated issues. There is a recently amended Data Protection Act (2008) issued in UK which provides the regulations and framework that govern the unsolicited marketing messages whether for political, charity or commercial purposes and aspects, such office works depends on strict data protection legislation related to the use of personal data. One of restrictions is that an organization that sends marketing messages to any person must stop sending those messages when such person objects or opts-out from receiving them, where the most common way used worldwide to stop receiving such messages is to send a "STOP" message to a message. Therefore, telecommunication sectors and authorities of Egypt have a room for improvement of the legislative framework, and specifically in relation to confidentiality of the users' data matters and to putting a more secure system for the VAS services. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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