Telecom Egypt Reports Q1 656476

CAIRO, Egypt -- Telecom Egypt (TE) (Ticker: ETEL.CA; TEEG.LN), today announced its consolidated financial results for the first quarter of 2008. Financial statements have been prepared in accordance with Egyptian Accounting Standards.

Highlights for the period include:

Chairman’s statement

Commenting on the company’s results for the first quarter of 2008, Akil Beshir, Chairman and CEO of Telecom Egypt, said:

“There is little doubt that the emphasis of our business during the first three months of the year was on expanding wholesale services to capitalize on the growing demand for telecommunication services in the domestic market. Increased promotional activities by the mobile operators have rapidly accelerated the development of the mobile market in Egypt and heightened demand for access to our extensive, highly-modernized network. Total wholesale revenues have increased by 12 percent compared to the same period in 2007 and now comprise 40 percent of our total revenue base. This has offset the pressure we have experienced on voice revenues within our retail segment during the period.

“Our business is seasonal and this has a notable bearing on both retail voice traffic, particularly in respect of international calls, and on revenues derived from new connections. For this reason, comparisons with the fourth quarter of 2007 are misleading. Year-on-year comparisons show that, despite market pressures, total sales revenues were recorded at similar levels at EGP 2.4 billion.

“Discussions with the mobile operators and the NTRA in respect of addressing interconnection rates, that will allow us to compete on a more equal footing with promotions by the domestic mobile operators, are underway and an outcome is expected at the beginning of the third quarter this year.

"As a company, we have always been highly cost conscious and careful to protect margins. We are still on track with an EBITDA margin of 51 percent, despite the impact of annual salary increases. I view the question of total reward for our committed workforce as business critical as we seek to recruit and retain the highest caliber of telecommunications professional in an increasingly competitive market.

“In the first three months of the year, Net Profit after Tax reached EGP 557 million - translating to a net profit margin of 23.3 percent. I regard this as a considerable achievement.

“In Egypt, demand for Internet access and mobile telephony continue to grow, benefiting from robust demographics and a stable spend on telecommunications. Respectively, our investments in this area continue to execute against their strategic and financial objectives. TE Data, our Internet and data services subsidiary, now has a market share of almost 54 percent and an ADSL subscriber base of 260 thousand subscribers.

“Simultaneously, Vodafone Egypt (VE) now has a closing customer base of 14 million; recording total voice minutes of 22.7 billion. VE’s sustained performance contributes directly to our bottom line, resulting in investment income of EGP 277 million for the first three months of 2008.”

Telecom Egypt