CAIRO: Egyptian mobile operator Mobinil is to employ new mobile services this year to help boost its profit margins despite an increasingly crowded market, its chief executive said.
Mobinil, which leads Egypt by subscribers according to the most recent figures available, sees an increase in 2011 revenues per user thanks to technology such as mobile banking, cell phone data services and text messaging, Hassan Kabbani said on Sunday.
"I can’t talk about high growth anymore, it’s behind us now. We will have growth in subscribers, but from a lower (income) segment. I will be more focusing on maintaining revenue and improving margins," he said in an interview.
Mobile subscription rates in the most populous Arab country reached over 80 percent in 2010, and a fierce price war between Egypt’s three operators — Mobinil and the local units of Etisalat and Vodafone — has trimmed revenues.
Mobinil, jointly owned by France Telecom and Cairo-based Orascom Telecom, was also hampered last year because the regulator had limited the number of mobile telephone numbers it could hand out to customers, Kabbani said.
He added that Egypt’s downward pricing spiral was likely to continue unless the regulator fixed the cost of connecting phone calls from one company’s network to another.
That would give operators a benchmark to set prices, halting the decline and encouraging companies to spend more money on their networks and other investments that would improve the quality of their service, he said.
"We are in the only industry where all our costs are going up, and our prices are going down," Kabbani said, referring to Egypt’s double-digit inflation.
Regulations
Mobile operators will continue to have room to gain subscriptions in Egypt because the country’s large population is growing fast enough to add well over a million new potential cell phone users a year, Kabbani said.
But that growth is nevertheless likely to slow in the coming years, he said, declining to give specific forecasts because stock market rules prohibited Mobinil from doing so before it issued 2010 earnings.
The company is also looking to make more of its purchase last year of LinkDotNet, an internet service provider, which is quickly signing up new subscribers, he added.
"Whether it is mobile or fixed, we strongly believe that people will require more and more broadband services. And we strongly believe LinkDotNet can play an important role in this."
But there are hurdles there too. Egypt’s fixed-line telephone infrastructure, for which Mobinil depends on the mostly state-owned landline monopoly Telecom Egypt, still lacks quality and reach, Kabbani said.
Mobinil is also eager to start mobile banking — seen as a big opportunity in a country where only about 10 percent of roughly 80 million people have bank accounts — but is waiting for regulators to clear the service, he said.
