Telecom Egypt posts rise in '09 profits
Fourth quarter profits decline as falling voice revenues dent earnings.
Egypt's incumbent operator, Telecom Egypt, saw net profits for the full year 2009 increase by almost 10% to reach EGP3 billion ($547.1 million) giving a net profit margin of 30.6%, although the company experienced a slide in fourth quarter profits, which fell to about EGP481 million ($87.7 million), as increased competition forced it to cut prices.
Tarek Tantawy, CEO, Telecom Egypt admitted that the past year had been tough. "There is no doubt that 2009 has been a challenging year," he said. "Egypt has not been immune to the global slowdown. Combined with the ambitions of mobile operators in Egypt, this has resulted in aggressive pricing."
Tantawy added that as pressure increased on voice revenues, broadband remained one of the "cornerstones" of Telecom Egypt's future. While revenue from voice services declined by about 5% to EGP3.1 billion, internet services experienced significant growth. TE Data, the internet division that Telecom Egypt acquired at the start of the year, experienced a 47% increase in subscribers, according to Tantawy.
While Telecom Egypt was also keen to slow down a trend of fixed-line substitution, Tantawy said that the company's investment in Vodafone Egypt was paying off. He pointed out that the mobile operation added 32% more subscribers by December 2009.
"Its customer base now stands at more than 23 million," Tantawy said. "This means that our investment in Vodafone Egypt continues to show strong growth with attributable income from Vodafone Egypt growing by 8% year-on-year to EGP 1,407 million."