Telecom Egypt Q2 profit up 14pc to $142m
Cairo, August 13, 2014
Fixed-line monopoly Telecom Egypt posted $142.66 million in net profit in the second quarter and said on Wednesday it hoped to obtain a unified landline and mobile license soon allowing it to boost earnings further.
The net profit figure of 1.02 billion Egyptian pounds represented a 14 percent increase from a year ago, driven by Telecom Egypt's role in building international networks.
It proposed a $0.05 cash dividend for 2014 on the back of increased revenues across all business units and the highest quarterly revenue in its history.
Chief executive Mohamed El-Nawawy told Reuters in a telephone interview that the revenue growth in its international business arose from building networks to India and East Africa and most recently to Asia-Pacific and China.
"The geography of Egypt is a very important geography and for the last several decades Telecom Egypt has been connecting international infrastructure that comes form the south and the east and connects to the north and the west," he said.
However, Nawawy said these revenues were not recurring and the company was seeking to boost its retail business. It was expecting the government to approve "soon" a unified licence for mobile and landline services that would allow it to offer a mobile service and boost earnings.
Nawawy declined to say how much revenue a mobile business would bring in but said that Telecom Egypt had already committed to investing the 2.5-billion-pound license fee set by the state.
"Telecom Egypt is very ready ... and will able to realise revenues in as little as one quarter or as much as two quarters from achieving the licence," he said.
Egypt's three existing mobile service providers - Vodafone Egypt, Mobinil and Etisalat Egypt - have been eating away at Telecom Egypt's fixed-line services as more Egyptians opt to use mobile phones and the internet instead.
Telecom Egypt has been relying on its data business to boost revenue and has been waiting to launch a new mobile operation that would complement its existing joint venture with Vodafone and rival the sector's two other players.
Telecom Egypt owns a 45 percent stake in Vodafone Egypt but is considering selling its holdings once it has a mobile network of its own. It does not expect to make a decision on its Vodafone stake until a year after it receives its own licence.
Vodafone Egypt is the leading communications player by customer numbers in the country of 86 million, the Arab world's biggest. It is also considering entering the fixed-line market. – Reuters