Telecom Egypt to Expand Broadband, Mobile Services, CFO Says
Telecom Egypt (ETEL) Co., the Arab country’s fixed-line telephone monopoly, plans to expand broadband and mobile-phone services after third-quarter profit dropped on dwindling subscribers.
The company will start operating a new undersea cable by the end of this year to increase capacity for data services and is negotiating to acquire a virtual mobile-network operator license in the first quarter of 2012, Chief Financial Officer Hassan Helmy said in a telephone interview today.
Telecom Egypt is also in talks with the country’s telecommunications regulator to acquire a license that would allow it to use the networks of other mobile-phone companies to provide services, he said. The company owns 45 percent of Vodafone Egypt Telecommunications Co., the biggest mobile- network operator by users in the North African nation.
“In the medium and long-term, the dynamics of the local market are very attractive,” Helmy said. “We’re counting on the young population of this country.”
Net income dropped 21 percent to 622.3 million Egyptian pounds ($104 million) from a year earlier, the Cairo-based company said in a statement on its website today. Fixed-line subscribers reached 8.6 million as of Sept. 30, according to the statement. The company said in September last year it had 9.4 million subscribers.
“The wider economic malaise is placing pressure on household incomes in Egypt,” Chairman Akil Beshir said in the statement today. “As predicated last quarter, there has been an impact on Telecom Egypt’s overall total number of active subscribers.”
The shares retreated 2.2 percent to 14.20 pounds at the 2:30 p.m. close in Cairo, the lowest level since February 2009. The stock has lost 21 percent this year, compared with a 41 percent decline for the benchmark EGX 30 Index. (EGX30)
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