Telecom Egypt will pay a LE 0.55 dividend for 2009, after earlier distributing LE 0.75, the company said on Sunday, putting on hold any immediate plans to expand in mobile.
The mostly state-owned landline monopoly said on June 1 it had ended talks to increase its 45 percent stake in Vodafone’s Egyptian mobile unit.
It withheld part of its usually hefty shareholder payout in March, telling analysts it was eyeing a move in mobile and would pay again if there was no progress in six months.
The firm’s chairman, Akil Beshir, made clear in the meeting that the dividend payment did not mean Telecom Egypt had given up on its plan to become an integrated operator, several participants said.
Telecom Egypt’s retail voice revenues have been drained by intense competition in the mobile market, which has pushed the three operators to cut prices to garner market share, leading many consumers to use landlines less or discard them altogether.
The firm, 80 percent held by the state, tightened its credit policy last year, cutting off around 2 million subscribers.
Meanwhile, mobile subscriptions are growing by roughly 1 million a month. They now number near 59 million in a country of 78 million.
Vodafone Egypt and Mobinil dominate the market, with newer entrant Etisalat Misr trailing.
Telecom Minister Tarek Kamel said in January that Egypt could offer a fourth mobile license if conditions allow.
Although it was distributed in two parts, the dividend matches the LE 1.30 dividend for 2008 and was in line with analysts’ expectations.
CI Capital analyst Amr Elalfy said the payout would remove some LE 940 million from the firm’s coffers, leaving around LE 1.7 billion in cash.
"We think TE’s aspirations to become more active in Egypt’s mobile market may have been put off for now yet not totally ruled out," Elalfy wrote after the announcement.
The company said the dividend would be paid on June 30 to shareholders as of June 27. Its shares rose 2.6 percent to 17.37 pounds by 0835 GMT.
