Telecom Egypt 2010 net profit up 8 per cent

Salma Hussein, Wednesday 9 Mar 2011

Despite the turmoil in Egypt, Egypt's landline monopoly sees profit increase

Telecom egypt

Landline monopoly Telecom Egypt reported an 8 per cent rise in 2010 net profit to LE3.3bn ($558m).

This represents a profit margin of 32 per cent, according to a press release issued by the publicly-owned company.

“TE has the highest gross earnings margin in the MENA region,” comments Mohamed Hamdi, Telecom analyst at CI Capital Investment bank.

“2010 witnessed a strong competition within the telecom sector, which weighed on telecom operators. But TE was an exception,” states Tareq Tantawi, executive chairman who adds that despite the tough competition the company managed to raise profitability by improving operational performance.

The monopolistic position might also be explain the outstanding results. Telecom Egypt owns a 45 per cent stake in British operator, Vodafone Egypt, which added LE1.34bn to its income in 2010 (40 per cent of the yearly profits).

Telecom Egypt tried to increase its stake in Vodafone Egypt in 2010 without success. Vodafone controls some 50 per cent of the mobile market in Egypt.

On a similar note, TE Data, which controls 63 per cent of the internet providers market raised its subscribers 41 per cent.

TE said it had 9.3m fixed-line subscribers at end-December, slightly down from 9.6 end of previous year.

“I find this trend normal as more people are substituting fixed lines with mobiles,” comments Hamdy.

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