Telecom Egypt, Vodafone Egypt sign $618m wholesale agreements

Telecom Egypt, Vodafone Egypt sign $618m wholesale agreements

Telecom Egypt - Vodafone Egypt signing ceremony (2).jpg

Telecom Egypt and Vodafone Egypt have signed two ten-year transmission and infrastructure agreements with a total value of EGP 10.85bn ($618m).

The transmission agreement covers Vodafone Egypt’s current and future requirements for domestic transmission services for both fixed and mobile, and the infrastructure agreement represents a new cooperation between the two companies, where Telecom Egypt will avail fibre backhauling capacity to Vodafone Egypt’s network.

“We are pleased to have reached a deal that is mutually beneficial to both parties. Vodafone Egypt is not only a strategic partner in the Egyptian market, but also a successful investment for Telecom Egypt,” said Adel Hamed, managing director and CEO of Telecom Egypt.

“The agreements secure the growth of TE’s domestic wholesale revenue stream for the long-term and prove that we are the partner of choice for domestic mobile operators.”

     It’s been a very busy year for Telecom Egypt and the country, which has included the following developments:

Alexandre Froment-Curtil, CEO of Vodafone Egypt, added: “We at Vodafone value the partnership with Telecom Egypt; we believe that the confidence of Telecom Egypt board and the Government to invest in Vodafone business shows how strong and successful is Vodafone.

“With the agreements we are signing today, we have confidence in the future of our business in Egypt, as well as in our partnership with Telecom Egypt. The good news for our 44 million customers is that by this agreement , they can soon enjoy higher speed and quality fixed-line internet, as well as highest 4G and 4G+ speed and quality.

"The future looks exciting for both of us, signalling more opportunities for growth, with stability and visibility of the economy. We believe that the distribution of dividend to our shareholder Telecom Egypt will help in building fantastic infrastructure for the country.”

Additionally, Vodafone Egypt has proposed a dividend of EGP 12.2 billion ($695m), of which Telecom Egypt’s share is the equivalent of EGP 5.5bn ($313m). The dividends will be paid on two tranches, the first of which amounts to EGP 4.8bn ($274m) and will be paid in March 2019 with the remainder in June 2020.

“We are delighted that we have finally reached an agreement with Vodafone Group on our share of retained earnings in Vodafone Egypt. Telecom Egypt plans to utilise the cash inflow to deleverage closing all the facilities in EGP to reduce the financing expenses enhancing its profitability, in addition to support its cost cutting initiatives, and continue its strategic investment plans to benefit the telecom industry in Egypt,” added Hamed.

Hamed was recently promoted to CEO from his former position as chief international and wholesale officer after the government, which owns 80% of Telecom Egypt, took the decision via a decree from the Prime Minister Abdel-Fattah El-Sisi. The company said: “The decision comes in line with the Egyptian government’s plan to speed up the national digital transformation initiative, where Telecom Egypt has a strategic role in facilitating and accelerating such transformation for the country.”

Magued Osman, chairman of Telecom Egypt, said: “Hamed’s background and key role in Telecom Egypt’s domestic wholesale and international cable systems as the chief international and wholesale officer position him as the ideal candidate to capitalise on Telecom Egypt’s assets to implement the digital transformation strategy.”

Egypt’s Minister of Communications and Information Technology, Dr. Amr Talaat, who witnessed the signing ceremony of the agreements yesterday, said the deals were mutually beneficial to the companies but will help to increase investments to develop and add value to the ICT sector in the country.

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