Telecom Egypt (TE) , the country’s landline phone monopoly, said an integrated license allowing the company to provide mobile services to boost sales growth is “imminently around the corner.”
The license that was expected to be issued in mid-July has been delayed by political upheaval following the ouster of President Mohamed Morsi on July 3, Telecom Egypt Chief Executive Officer Mohamed El-Nawawy said today in a phone interview.
“We have a near-final draft,” El-Nawawy said. While “obviously some of the bigger landscape issues that have been happening in Egypt late in June and July might have slowed things down a little bit,” the company is “still very optimistic that the government will soon be deciding a date for the issuance.”
Telecom Egypt, 80 percent owned by the state, has been facing revenue pressure as more people switch to mobile service from fixed-line phones, while slower business activity has led to fewer calls abroad. Second-quarter revenue from voice services fell 15 percent from a year earlier, the Cairo-based company said today.
The government is considering new rules to allow Egypt’s four telecommunications providers to offer mobile, fixed-line and broadband services under a single license. The move would enable the Egyptian Co. for Mobile Services, which operates the Mobinil brand, as well as Vodafone Group Plc (VOD)’s local division and Emirates Telecommunications Corp. (ETISALAT)’s Etisalat Misr unit to offer landlines, while Telecom Egypt would add wireless services.
Second-quarter net income jumped 45 percent to 896 million Egyptian pounds ($128.2 million), Telecom Egypt said today. Revenue increased 16 percent to 2.8 billion pounds as demand for data services expanded and the company added lines in new residential developments. Voice revenue declined to 318 million pounds while wholesale revenue, which includes domestic and international transmission and international services to other operators, increased 27 percent to 1.6 billion pounds.
Telecom Egypt would be ready to provide mobile services within a few weeks of acquiring the license, as the company has prepared for technical and customer issues, El-Nawawy said.
“By moving from where we are right now, which is a very good position in the fixed retail market to a better position in the total telecom space, I think we will be able to convey growth,” El-Nawawy said.
Telecom Egypt fell as much as 2.2 percent to 13.45 pounds and was trading down 1.5 percent at 1:02 p.m. The stock has declined 4.2 percent this year.