Mubarak's phone cut slashes Telecom Egypt profits 10 per cent

Reuters , Wednesday 1 Jun 2011

Company loses LE100 million in year-on-year first quarter net profits following Mubarak's orders to cut telecommunications

Landline monopoly Telecom Egypt posted a 10 per cent drop in first-quarter net income on Wednesday after anti-government protests hit the economy and led the government to suspend some telecom services.

The company made net income of LE892 million, down from 992 million in the same period a year earlier, and compared with an average forecast of 689 million from three analysts.

Earnings before interest, tax, depreciation and amortisation were LE1,284, down from 1,364 billion, and revenue fell 4 per cent to LE2.4 billion, it said in a statement.

Telecom companies including Vodafone Egypt were forced to cut their lines during the height of the protests that toppled President Hosni Mubarak on 11 February. Telecom Egypt owns a 45 per cent stake in British operator Vodafone's local unit.

An administrative court fined Mubarak and two former officials LE540 million on Saturday over the service cuts.

"I firmly believe that the biggest impact (of Egypt's political turmoil) is behind us. We look forward to the future with confidence," said Chairman Akil Bashir.

Telecom Egypt said on 7 March that the unrest cost it LE17.57 million. Its shares are down 12 per cent this year, outperforming a 22 per cent drop by the benchmark Egyptian EGX30 index.

The company said the number of fixed-line subscribers was flat year-on-year at 9.3 million and it expanded its share of the ADSL market to 63 per cent from 61 per cent, helping expand its internet and data revenues by 33 per cent.

Three Egyptian ministries and a slew of associates planned and practiced how to severe Egypt's mobile, internet and communications services years before 25 January, according to an administrative court verdict Body:

"The ministries of interior, telecommunications and mass communications in association with the three [Vodafone, Mobinil and Etisalat] telecommunications companies operating in Egypt and the internet providers performed a series of experiments on how to severe connections as early as April 2008," reads the verdict summary issued by an Egyptian administrative court and obtained by Ahram Online.

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