Telecom Egypt's profit continues to slide

Political instability continues to dent Telecom Egypt's results
Political unrest in Egypt has hit all of the country's telecom operators.
Political unrest in Egypt has hit all of the country's telecom operators.

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Egypt’s incumbent operator, Telecom Egypt, continued to feel the effects of ongoing political instability in the country in the third quarter of the year, with revenue and profit showing significant declines compared to the previous quarter.

The company reported sales revenue of EGP2.3 billion ($385m) in Q3, a decline of 10.3% compared to Q2. Net profit declined by 26.3% to EGP622 million in the quarter.

For the first nine months of the year, the telco posted revenues of EGP7.4 billion, down from EGP7.7 billion in 2010. Net profit was EGP 2.3 billion, representing a net profit margin of 32%.

Akil Beshir, chairman, Telecom Egypt, said that the results demonstrated that there “has not yet been a return to normal operating conditions in Egypt”.

“The wider economic malaise is placing pressure on household incomes in Egypt and, as predicted last quarter, there has been an impact on TE’s overall total number of active subscribers.

“We have adjusted active connections accordingly, which has temporarily reduced the number of subscribers we deem as active,” he said.

Despite the economic problems, Beshir added that Telecom Egypt’s mobile division, Vodafone Egypt, made 1.4 million net customer additionsin the quarter ending September 2011, and now has a total of 35.5 million users.
 

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