CAIRO: Egypt’s Mobinil said it would not hit its full-year goals for subscriber numbers and revenue growth, and uncertain market and regulatory conditions would prevent it from updating its forecasts.
"We are not giving guidance for the end of the year, especially on top line and profitability, because of the fluid … and very aggressive competition we currently see," the firm’s chief finance officer, Khalid Ellaicy, told analysts and journalists on a conference call on Wednesday.
Mobinil, which is barely clinging on to its position as Egypt’s largest network operator by subscribers, said it could not reach 28 million users by December, and revenue would not grow 5 percent in 2010, projections it had given in February.
The firm posted a 29 percent drop in second-quarter net profit to $66.8 million on Tuesday.
Its added just 26,000 subscribers in the three months to end-June, keeping its total of 26.15 million just a whisker above nearest rival Vodafone Egypt, which added 1.2 million in the same period to 25.79 million.
Ellaicy said regulatory delay in handing out new dials — the mobile numbers it hands to customers — was a far bigger drag on subscriber growth in the quarter than a May 2 deadline to register all mobile phone users.
"The vast majority is from dial shortage," he said.
Registration is a government initiative the regulator says will cut nuisance calls and help prevent crime. Ellaicy said Mobinil had not disconnected people who had not provided adequate details for registration, but they could not make outgoing calls.
Mobinil added some 296,000 users in April but lost almost 537,000 users in May, communications ministry data showed, a discrepancy Ellaicy later told Reuters was cyclical churn.
"The reduced amount of gross adds in May, coupled with churners, gave that number," he said, adding that churn — regular loss of customers — typically ranged between 3 percent and 5 percent a month.
Mobinil received 1 million dials in June after requesting them last year, to take its total to 31 million, and has since asked for 2 million more.
"It’s not clear why the dials aren’t coming," he said. "They (the regulator) get paid for it, they get money out of it."
Ellaicy said industry norms for network utilization — a metric of spare capacity to grow user base — is around 70 percent but that Mobinil would have to top 90 percent to maintain its market share.
"Defense of our market share is paramount, (which) involves extra spending in the third quarter that will bring down the EBITDA margin a little bit. We will take that hit," he said.
Ellaicy said the firm had no new guidance on capital expenditure, which would likely come in at the low end of previous guidance of between LE 2.5 billion and 3 billion.
