Last checked at 13 Jan 2015 10:37
te signs long-term wholesale service agreement with Mobinil and Vodafone Egypt
Cairo, Jan. 13, 2015: Telecom Egypt (te) (Ticker: ETEL.CA; TEEG.LN) has today announced the signing of two long-term agreements with both Mobinil and Vodafone Egypt. The agreements, which will see te provide international communication and domestic transmission services, will take effect immediately and are expected to represent a total value of approximately EGP 15 billion.
Both Mobinil and Vodafone Egypt's international services agreements are valid for four years, while infrastructure services will vary for each operator - five years for Mobinil and three years for Vodafone Egypt.
The agreements consist of two distinct elements.
Infrastructure services
te owns an extensive infrastructure network of thousands of km all over Egypt. Over the past two years, te has been working to extend the capability of this infrastructure by 6.25% and increase its capacity by 50%.
te provides infrastructure services for the telecommunications companies operating in the Egyptian telecom market. For many companies, using te's advanced infrastructure proves to be an effective commercial alternative to building their own infrastructure network. te's revenues from infrastructure services for the year 2013 reached about EGP 1 billion.
The agreements are expected to represent a total value for te's wholesale business of approximately EGP 3 billion over thei lifetime of the contracts.
International services
te provides international services to MNOs who chose this wholesale solution as an alternative to acquiring their own international gateway license. te's share of revenue from international communication services is around 35%.
The conditions of this agreement include a break clause, should any operator decide to acquire their own international gateway license that aggregates services to customers in the Egyptian market.
In the first nine months of 2014, te's revenues amounted to EGP 9.15 billion, representing an increase of 9.5% on the same period last year. In 2013, witnessed a growth in revenues of 12% on previous year 2012, achieving record revenue levels in the company's 160 year history. In December 2014, te's management had announced its 2015 budget plan highlights with expectations to grow the business's topline by 5%, an EBITDA margin of 27% and a CAPEX to Sales ratio of 18%.
Commenting on today's announcement, Mohamed Elnawawy, Managing Director and CEO of Telecom Egypt, said:
"te remains committed to its key objective of becoming a Total Telecom Operator offering fixed and mobile voice and data services to the Egyptian market. As soon as we are granted the long awaited mobile license, we will be best placed to continue to increase shareholder wealth and levels of customer satisfaction by providing a wide range of high quality and advanced services.
"te is an integral associate to the Egyptian society, reflecting today's generation that is characterized by its social connectivity and creative productivity, as well as its ambition for a new beginning. Around 70% of this generation lies in the age bracket less than 30 years, which makes it a promising market where broadband services aggregately grew by 32% annually, maximizing the competing potentials in the telecommunication offerings."
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For more information, contact:
Mohamed Kamal
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Director Media & Investor Relations
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Tel: +202 3131 5219 |
Fax: +202 3131 6115 |
E-mail: investor.relations@te.eg
About Telecom Egypt
Telecom Egypt (te), Egypt's incumbent telecommunications operator, started its operations in 1854 with the first telegraph line in Egypt. Then it was corporatized in 1998 to replace the former Arab Republic of Egypt National Telecommunication Organization (ARENTO). The Company is the largest provider of fixed-line services in the Middle East and Africa with 6.64 million subscribers as at 30 September 2014.
te provides retail telecommunication services including access, local, long distance and international voice, Internet and data, and other services. The company also provides wholesale services including bandwidth capacity leasing to ISPs, and national and international interconnection services. te's services also include the provision of narrowband and broadband internet access through its subsidiary TE Data. TE Data has active operations in Egypt and Jordan.
te currently participates in the mobile segment in Egypt by providing mobile interconnectivity through its current, increased 44.95% holding in Vodafone Egypt, one of the three existing Egyptian mobile operators.
With revenues of EGP 11.14 billion in 2013, te's shares and GDRs (Ticker: ETEL.CA; TEEG.LN) are traded on The Egyptian Exchange and the London Stock Exchange.
For Further Information, visit te on http://te.eg