Promising first quarter for Vodafone Egypt

10 May 2004

Vodafone Egypt has reported positive financial and operational results for the first quarter of 2004, with net profit increasing by 111% during the year to reach EGP1.08 billion at the end of March. Turnover stood at EGP23.3 billion at the same date, an increase of 50% on the same period of 2003, while EBITDA grew by 64% to EGP1.8 billion. Vodafone’s customer base stood at 2.9 million at the end of the quarter, an increase of 27% in the year, and up from 2.7 million at the end of 2003. The operator has been concentrating on the promotion of its Vodafone Live! GPRS service, which it launched in May 2003.

Vodafone’s only competitor in the Egyptian mobile market is MobiNil, which claimed a customer base of 2.99 million and a market share of 52.16% at the end of 2003. The two operators had prepared themselves for the onset of competition in 2003 when fixed line incumbent Telecom Egypt was scheduled to launch a mobile network. This failed to go ahead, however, and at the end of the year Telecom struck an agreement with Vodafone Egypt’s parent, under which it acquired 16.9% of the Vodafone Group’s shares in Vodafone Egypt, together with a further 8.6% from minority shareholders, giving it a total stake of 35.5%. As part of the deal, the NTRA agreed to license new spectrum in the 1800MHz band to Telecom, in return for which the telco was required to sell back its existing licence to the government. Both Vodafone Egypt and MobiNil will have access to the new spectrum, but it is believed that the deal will give Vodafone a competitive advantage by virtue of the fact that TE controls all fixed line telephony services in Egypt and therefore has access to a huge customer base. Vodafone hopes that the agreement, teamed with the promising first quarter results, will help it to increase its customer base and overtake its rival to become the country’s number one cellco by the end of 2004.

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