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3 years ago
OFFICIAL CORRECTION-UPDATE 2-Telecom Egypt posts 11 pct rise in Q2 profit, proposes dividend
August 13, 2014 / 8:08 AM / 3 years ago

OFFICIAL CORRECTION-UPDATE 2-Telecom Egypt posts 11 pct rise in Q2 profit, proposes dividend

(Corrects net profit figure after company re-submitted early results)

By Lin Noueihed

CAIRO, Aug 13 (Reuters) - Fixed-line monopoly Telecom Egypt posted $139 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 994 million Egyptian pounds represented an 11 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. Last year the firm had issued a dividend of 1 Egyptian pound.

Chief Executive Mohamed Elnawawy 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, Elnawawy 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.

Elnawawy 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. (1 US dollar = 7.1500 Egyptian pound) (Additional reporting by Asma Al Sharif and Ehab Farouk, editing by Mark Heinrich and David Goodman)

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