Egyptian competition watchdog claims cellcos acted as a cartel over stamp duty introduction

9 Dec 2013

All three of Egypt’s mobile network operators are reportedly facing prosecution over allegation that they have illegally formed a cartel with a view to raising prices for mobile services. According to Ahram Online, the Egyptian Competition Authority (ECA) has referred the trio to the public prosecution services after concluding an investigation into the matter; the study was prompted by a notice which accused the cellcos of simultaneously levying a stamp tax on customers. ‘Even though implementing a stamp tax in itself is not illegal, the way the companies went about it breaks the cartels law,’ the head of the ECA Mona El-Garf was cited as saying. Further, it has been claimed that the actions of Egyptian Company for Mobile Services (MobiNil), Vodafone Egypt and Etisalat Misr have cost customers more than EGP500 million (USD72.6 million) on an annual basis.

In March 2012 Egypt’s mobile operators agreed to levy a stamp duty of EGP0.5 per month per customer, ahead of notifying the National Telecommunications Regulatory Authority (NTRA); in adding the new charge the trio claimed that, while they had previously absorbed the tax on behalf of their subscribers, the country’s economic situation required that they pass on the charge to customers. However, the ECA has argued that the simultaneous imposition of the stamp duty by all three cellcos on pre-paid subscribers at the exact same rate is a violation of Article 6 of the Egyptian Antitrust Code.