Tuesday, May 14, 2013
DUBAI (Zawya Dow Jones)--Telecom Egypt is set to launch mobile services in July, building on its fixed line offering, despite slowing business activity and a weak economic environment in the North African country, according to the telco's chief executive.
The telecom operator, which is Egypt's sole fixed line provider, is suffering from a decline in voice revenues on fixed networks, but will launch mobile services ahead of Ramadan and continues to benefit from wholesale revenues as mobile operators access its network, Mohamed Elnawawy, managing director and chief executive of Telecom Egypt, told Zawya Dow Jones.
"Telecom Egypt is a telecom operator and we believe in owning our customers...and building our brand with customers," said Mr. Elnawawy. "We are also keen on being a service provider to other providers in the market."
The telco will launch mobile services ahead of a marketing campaign during Ramadan to tap into the growth in data use and the "young" and "imminent" retail market, Mr Elnawawy added. But wholesale revenues will continue to provide an area for growth, particularly from international calls, which increased significantly in the first quarter, he said.
Telecom Egypt said on Tuesday overall revenues in the first quarter increased by 1.4% to 2.7 billion Egyptian pounds ($387 million), helped by a 4.1% increased in wholesale revenues. Meanwhile, net profit for the first three months of the year amounted to EGP858 million, a drop from EGP914 million in the year ago period as expenses increased on higher salaries and interconnection costs.
The National Telecommunications Regulatory Authority announced in December it would allow Telecom Egypt, which is 80% owned by the government, to join three existing private telcos--Vodafone Egypt, Mobinil and Etisalat Misr--in offering mobile services. The regulator will also eventually allow private mobile companies to establish fixed-line systems on existing infrastructure owned by Telecom Egypt, which enjoys a monopoly on land lines. Telecom Egypt holds a 45% stake in Vodafone Egypt.
The regulator has not yet finalised the details and cost of a mobile licence for Telecom Egypt or whether the operator will be required to use all three mobile operators networks, Mr Elnawawy said. "We will comply with the government decisions, but use the network that gives us the best prices and our shareholders the best value," he added.
Telecom Egypt shares last traded up 0.1% at EGP13.41 Tuesday.
Write to Rory Jones at rory.jones@dowjones.com
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(END) Dow Jones Newswires
14-05-13 0905GMT
