Telecom Egypt profit dips 4% on Algerian woes

16 Aug 2007

Telecom Egypt has reported a 4% dip in first half profits as a result of a one-off charge to account for problems in Algeria. Profit of EGP998 million (USD177 million) fell well below forecasts. Chairman Akil Beshir told Reuters a major factor in the decline was that it deducted EGP258 million as a one-off provision in case it loses its investment in Algeria, Lacom, a fixed line network operator. Lacom has complained that it faces unfair competition from Algerie Telecom and that the regulatory authority has not been helpful. Despite saying earlier that Telecom Egypt was not closing the operation, Beshir told reporters on a conference call that Telecom Egypt would try and pull out of its Algerian venture. ‘We have now taken the decision to try and extricate ourselves from this venture, as the regulatory position is unchanged and we see little support of the spirit of the liberal market. It is unclear precisely what the outcome will be,’ he said.

Revenue from data and internet services increased 60% year-on-year to EGP131 million, on the back of strong ADSL subscriber growth to 135,000, up 21% on the end of the first quarter.

Egypt, Lacom, Telecom Egypt