CAIRO: Ongoing talks between Vodafone Egypt and Telecom Egypt are concerned with the mobile operators’ ownership structure and not its administration, said Vodafone CEO Hatem Dowidar.
“It is important…not to confuse a company’s ownership structure with its management,” Dowidar told Daily News Egypt on the sidelines of a conference.
“Whatever happens — and we are still not sure what will happen — this does not mean that the administration of the company will be changed, especially since Vodafone Egypt is performing well financially,”
Speaking at an event Thursday celebrating the renewal of a three-year partnership agreement between Vodafone and the British University in Egypt (BUE), Dowidar played down rumors that Vodafone Group is selling its 55 percent stake in Vodafone Egypt, the country’s second-largest mobile company, to Telecom Egypt.
Telecom Egypt, the country’s sole fixed-line operator, said last week it was considering expanding its presence in the mobile market by raising its current 45 percent stake in Vodafone Egypt.
“Vodafone and Telecom Egypt, our shareholders, have a business plan which we are following regardless of anything that is said concerning our ownership structure. We are committed to our work and will follow our plans,” Dowidar said.
“To my knowledge, these talks are just internal discussions between our current shareholders and nothing has been decided,” added Dowidar.
Dowidar cited the renewal of the partnership agreement with BUE as an example of how the company’s administration was committed to its plans and operations without being distracted by the talk of the sale.
“Today, we have renewed our lasting partnership with the British University in Egypt, expanding our role from sponsoring their Chair of Entrepreneurship and Business, to providing a training and R&D environment for their new graduates. This shows that for us, there is no affect from what is being said about our ownership structure on the day to day running of the company,” said Dowidar.
Dowidar claimed that Vodafone Egypt is outperforming its competitors. “We are doing better than them [Mobinil] in terms of revenues and much better in terms of profitability,” he said.
“Our financial performance is very healthy, however, when we compare to the previous years, we have a small decline on revenues and profits because of the falling prices,” he said.
Eyeing options
Telecom Egypt said last week that it “is exploring several alternatives including increasing its stake and role in Vodafone Egypt or potentially to apply for the fourth mobile license if the Egyptian government were to make one available.”
Dowidar, meanwhile, warned about a fourth mobile license being offered because it may cause prices to fall too low and discourage investment in infrastructure and service quality.
A new company coming in after 60 percent market penetration will always lead to competition mainly by lowering prices, he said.
Recent figure show that penetration is around 70 percent in Egypt, with the number of mobile phone subscribers rising by 1.2 million in March, bringing the total to 57.7 million out of a population of nearly 80 million.
Dowidar said that Egypt already has the lowest mobile service prices in the region. “It is good for consumers to have lower prices to a point were there is still enough investment in the network and new products, but if this goes on forever, it will be only competition on prices, and no investment in service quality and networks will be made, which is not in the best interest of the consumer,” he added.
