Telecom Egypt says net income up 35% year-on-year

Mergers, Acquisitions and Financial Results

Telecom Egypt has announced its consolidated financial results for the full year ending 31 December, 2007.

Commenting on the company’s results for the full year 2007, Akil Beshir, Chairman and CEO of Telecom Egypt, said: "As a company, we are very proud of our continued profitability, and the ability to increase profits in a changing market should not be underestimated. Our EBITDA margin remains robust and within management expectations in the low to mid fifties. In 2007, our Net Profit after Tax reached EGP 2.5 billion an increase of 4.4% compared to 2006, largely driven by the growth we have seen in internet and data and wholesale revenues. Ensuring profitability is sustained remains a key priority for TE and we remain committed to keeping a close eye on costs.

“2007 was a year of focused growth in our subscriber base. The fourth quarter was particularly strong in terms of net additions, resulting from the market’s positive response to our promotional activities. In addition, our Internet and data services subsidiary – TE Data – now has a market share of 52 percent and an ADSL subscriber base of over 220 thousand subscribers. Simultaneously we have benefited from our stake in Vodafone Egypt, which contributed over one billion Egyptian Pounds to group bottom line throughout 2007.

“Meanwhile, our revenue mix has continued to evolve with wholesale revenues now accounting for 35% of total sales, while retail revenues account for the remaining 65%. The growth in wholesale revenues was 22% year-on-year with the main driver for this double digit growth is the increase in demand for our infrastructure by other operators in the domestic market. We continue to see our extensive infrastructure as our key asset and we intend to capitalize on it to capture the growing demand for telecommunication services in the domestic market.

“An important part of driving future revenues is looking for new opportunities and initiatives, such as our submarine cable project, TE North, which is due for completion in the second half of 2009. Taking advantage of the boom in Internet traffic from Asia to Europe and vice versa, this submarine cable capitalizes on our existing national infrastructure and will enable Telecom Egypt to generate further wholesale revenues by selling capacity to other operators. We have already signed agreements with three companies, totaling USD 126 million, and we expect to announce more throughout 2008.”