Telecom Egypt First-Quarter Net Rises on Wholesale Business

Telecom Egypt, the country’s monopoly fixed-line phone company, said first-quarter profit advanced 1.7 percent helped by growth in its wholesale business.

Net income for the period that ended March 31 was 912 million Egyptian pounds compared with 897 million pounds ($149 million) a year earlier, the Cairo-based company said in an e-mailed statement today. The average of two analyst estimates compiled by Bloomberg was for a profit of 654 million pounds.

The company’s wholesale business, or services provided to other operators who use its infrastructure, generated 57 percent of Telecom Egypt’s total revenue, or 1.52 billion pounds. That’s an increase of 32 percent from last year.

“The diversified nature of Telecom Egypt’s business has helped mitigate the recent difficult macro situation the country has been facing,” Cairo-based Pharos Holdings, which recommends holding the stock, said in a research note today.

In the retail business, average monthly revenue per user rose 4.2 pounds to 56.6 pounds. Users at the end of March fell by about 63,000 to 7.9 million, of which 1.9 million were subscribers to voice and data services, up from 1.8 million at the end of 2011, Chief Executive Officer Tarek Aboualam said in a telephone interview today.

“Whatever we’re losing in terms of customers are low-end,” said Aboualam, adding the company is benefiting from the addition of “high-value” customers.

The country’s telecom regulator is studying the terms under which a mobile virtual network operator’s license can be issued and results are expected in “a few months,” Aboualalm said. The company plans to bid for the license when it’s offered, allowing it to offer mobile phone services by using the network of existing operators.

Telecom Egypt shares fell 0.6 percent to 12.92 pounds at the 2:30 p.m. close in Cairo, valuing the company at 22.1 billion pounds. The stock is down 2.2 percent this year, compared with a 40 percent increase in the benchmark EGX30 Index.

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