Uproar in Egypt over hike in mobile recharging cards

The new logo of Telecom Egypt is pictured at their headquarters building in Cairo, Egypt, in this September 20, 2017 photo. (REUTERS)
Updated 03 October 2017

Uproar in Egypt over hike in mobile recharging cards

CAIRO: Egyptians are angry over a government decision to ratify a 36-percent devaluation of mobile phone balance recharge cards.
“It’s completely unfair, that’s quite a lot,” a mobile user told Arab News after realizing that she received about 70 percent of the price of the purchased card in charging credit.
The decision, ratified by the state-run Telecommunications Regulatory Authority (TRA), came into effect over the weekend.
Since then, there have been boycott calls on social media against the telecom companies applying the increase.
The increase is not on the price of the recharge cards, but on the delivered value given from the company to the customer.
This means a recharge card costing 100 Egyptian pounds ($5.67) will give 70 Egyptian pounds of credit.
Justin Dargin, a Middle East expert at the University of Oxford, said the devaluation is part of government attempts to raise revenue and achieve budgetary stability following years of political instability.
“The devaluation of the mobile recharge cards operates as a de-facto tax, which inevitably would injure the Egyptian working class in much the same way as a regressive tax would,” he told Arab News.
“It’ll take a larger percentage of the income of the poorer segments of the Egyptian populace.”
On Sunday, some mobile users in Egypt were confused when they tried recharging their mobile balance and received the full value of the card, without the 36-percent devaluation.
Many thought the government had backtracked its decision due to public anger, but a source at a telecom company denied that.
“Adding the full credit has occurred in some prepaid cards which have not been updated with the new pricing, but all recharging cards will be updated during the coming period,” Al Masry Al-Youm newspaper quoted the source as saying.
The Association of Citizens Against Price Rises called for a boycott of mobile telecom companies in Egypt, asking users to refrain from buying balance recharge cards.
It accused the TRA of regulating monopolization because it obtains 2-percent profit from mobile service operators.
The price hike from Egypt’s top telecom operators Orange, Vodafone and Etisalat comes as landline monopoly Telecom Egypt launches WE, the country’s fourth mobile network, owned by the government.


Saudi Aramco sets IPO share price between 30-32 riyals

Updated 37 min 31 sec ago

Saudi Aramco sets IPO share price between 30-32 riyals

  • Saudi Aramco intends to buy $1 billion worth of shares for employee

DUBAI: Saudi Aramco’s multibillion-dollar initial public offering (IPO), probably the biggest in history, shifted to full gear as its share price was announced and subscription to the world’s biggest oil company commenced on Sunday.

Saudi Aramco set an indicative share price between 30 and 32 riyals for the 1.5 percent of its oustanding shares – or about 3 billion shares of its 20 billion regular shares – that it would offer for the domestic part of its public offering. The blockbuster IPO could be worth least $24 billion, and values the state-owned oil giant at up to $1.71 trillion.

The offering – or book-building – period for institutional subscribers, which started today, closes on December 4 while the retail offering for individual investors will begin on November 21 and will end on November 28. Individual investors will subscribe based on a price of 32 riyals, the top end of the price range, the company noted in a document.

The final pricing for the Aramco shares would be announced on December 5, and Saudi Tadawul  – the Kingdom’s stock exchange – would make an announcement when initial trading day would be, the company added.

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For more of our coverage of the Aramco IPO, click here.

To view key Aramco IPO documents, click here.

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Samba Capital & Investment Management Company has been designated as issue manager while National Commercial Bank, Saudi British Bank, Samba Financial Group, Saudi Investment Bank, Alawwal Bank, Arab National Bank, Albilad Bank, Aljazira Bank, Riyad Bank, Al Rajhi Bank, Alinma Bank, Banque Saudi Fransi and Gulf International Bank were named as receiving banks.

If there are applications for more than the 0.5 percent on offer — amounting to 1 billion shares — allocations to private investors will be scaled back proportionate to demand; if there are fewer applications than the 0.5 percent when all maximum applications are satisfied, private investors can have the over-payment refunded either in cash via the receiving banks or in the form of extra shares in Aramco.

There is an incentive mechanism in the IPO whereby Saudi investors will receive a bonus one-for-ten allocation of shares, up to a maximum of 100 shares, if they do not sell shares in the market for a period of six months after dealings begin in December, at a date still to be determined.

Saudi Aramco also intends to buy $1 billion worth of shares for employees under a plan to incentivize executives and staff members alongside the IPO next month.

The plan — which was disclosed in the IPO prospectus — will involve Aramco buying the shares from the government and making them available for employees under special terms.