Telecom Egypt, India’s Airtel sign submarine cable system deal
Telecom Egypt has signed a strategic partnership agreement with India’s biggest mobile carrier Bharti Airtel Ltd, the Egyptian company said in a statement on Tuesday.
The agreement grants Airtel an indefeasible right of use on Middle East North Africa Submarine Cable (MENA Cable) and TE North Cable Systems. Additionally, Airtel will take large capacities on a long-term basis on two new cable systems, SMW5 and AAE1.
The agreement is expected to lead to an immediate recognition of revenue and cash flow of $90 million in addition to around 4 percent of annual recurring revenue for Telecom Egypt over the lifetime of the cable systems a minimum of 15 years, the statement showed.
“The timing of this agreement is crucial as it allows us to immediately recover cash flows spent on the acquisition of … MENA Cable and represents a manifestation of our vision expressed in March of this year of identifying an investment opportunity with short-term return prospects.” Telecom Egypt’s chief executive Ahmed El Beheiry said in the statement.
“In addition, bundling our recently acquired MENA Cable with other assets of our international submarine network maximizes our return on such investments.”
El Beheiry also said Telecom Egypt intends to invest in landing and terrestrial crossing infrastructure to serve new submarine cable projects and develop digital applications to turn Egypt into “a regional data center and cloud computing hub.”
