TE secures EGP 22bn worth revenues from long-term contracts with mobile operators

Mohamed Alaa El-Din
4 Min Read

Telecom Egypt (TE) has secured high revenues of more than EGP 22bn until 2022, according to an official from TE.

TE renewed a wholesale agreement with Vodafone Egypt to provide transmission services until the end of 2020. This agreement guarantees revenue of EGP 2.37bn for TE over its tenure. Vodafone also renewed its International Services for EGP 12bn until the end of 2022.

Similarly, TE renewed its transmission services agreement with Orange to 2021, for EGP 1.5bn. It renewed the international services agreement as well, until 2022 for EGP 4bn.

Moreover, TE and Etisalat Misr, renewed the EGP 3bn transmission services agreement worth EGP 3bn.

Through these agreements, TE aims to boost its wholesale revenue stream by monetising its infrastructure investments, and securing long-term agreements with domestic mobile operators.

According to a previous report by the ministry, the cable revenue contributed to 9% of TE’s total consolidated revenues in 2017.

Revenue from this business is divided into 3 sub-segments: Cable projects, where revenue generated from new cables crossing Egypt and the sale of fibre pairs on cables owned. The second subsegment is ancillary services (O & M), where annual fees are charged by TE for the operation and maintenance of cables crossing Egypt. The third subsegment is capacity sales. In this source, TE sells capacities on the cables, in which they participate in a consortium or by owning them, to other carries.

Cable system revenue contribution is categorised as recurring and non-recurring contracts, where some are contracted under leased capacities, and some are contracted under the indefeasible right of use for the cable’s lifetime.

During the first half (H1) of 2018, capacity sales revenues reached EGP 451m, up from EGP 382m.

Revenues from ancillary services (O & M) also increased from EGP 146m to EGP 178m, while cable projects declined from EGP 59m to EGP 46m.

The source told Daily News Egypt that TE accounted for 79.3% of the ADSL market in Egypt, the largest share H1 of 2018, estimated at 4.6 million subscribers, out of total 5.8 million. The other four internet service providers are: Vodafone, Orange, Etisalat, and Noor, which have 1.2 million subscribers.

According to the official, the ADSL services lead the data transmission revenues of TE, reaching EGP 3.2bn, out of EGP 4.9bn worth of revenues, from data transmission in H1 of this year. This is higher than EGP 2.3bn worth of revenues achieved last year.

Meanwhile, landline services revenues amounted to EGP 1.5bn in H1 of this year, compared to EGP 1.2bn in the same period last year.

According to TE statistics, the ratio of landlines to households reached 30.8%, whilst it is 24.2% for ADSL services.

As for the mobile market, which TE has recently entered, the company has attracted 3.3 million users at the end of H1 of 2018, up from 2.9 million in the first quarter of 2018.

According to TE, Vodafone has 41.4 million users, leading the mobile market, followed by Etisalat with 31.6 million users, then Orange with 31.1 million.

According to TE, the ratio of landlines services to population reached 105%, while data transmission ratio reached 37%.

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