Wholesale business unit grows revenues by 75% compared to same period last year on the back of cable uplift
Telecom Egypt’s big increase in wholesale revenues saw the telco reach EGP28.1bn (€832.7m) consolidated revenue for H1, an increase of 38% YoY.
This growth was driven by an increase in the wholesale business units’ revenues by 75% compared to the same period of last year. The carrier said this increase constituted 71% of its overall revenue total growth, followed by “strong retail performance”.
The increases came without a related uplift in subscriber numbers. Fixed voice and broadband subscribers grew 5% and 8% YoY respectively while mobile customers increased by 7% YoY to reach 12.6m.
Net profits hit EGP6.7bn which the telco was a result of operational improvements and higher investment income. This is despite in-service capex rising 55% YoY to EGP4.5bn – comprising 16% of sales.
“Our margins remained robust even in the face of higher costs, owing to organic operational performance thanks to further monetisation of our infrastructure and cost containment efforts, which crystallised in the recently signed national roaming agreement among other initiatives,” said managing director and CEO Mohamed Nasr.
He added: “Our modified shareholder’s agreement with Vodafone Egypt continues to reap its rewards – as we collected EGP2.1bn dividends in July 2023, turning our [free cash flow] into EGP0.5bn for H1 2023.”
Nasr said the cash flow would continue to improve for this reason plus new cable projects recognised in this quarter – to the tune of around $40m. He said that in addition to paying its past vendor finance obligations, the telco had strategically pursued a proactive approach to secure its future capex requirements through upfront payments to guard against supply chain volatility – and resultant pressure on new capex.
“I am keen to execute our plans of becoming a regional data hub while also growing all other aspects of our business,” he said. “We have a great opportunity to continue leading the data market and expand our mobile business.”
In late January, Telecom Egypt announced that the National Telecom Regulatory Authority (NTRA) had accepted its financial and technical offer to obtain an additional 5MHz of spectrum in the 1800MHz band using FDD technology.
In May, Telecom Egypt announced the successful landing of the 2Africa subsea cable in Port Said. This marked the second and final 2Africa landing in Egypt, coming five months after the first landing in the Red Sea city of Ras Ghareb.
That same month Reuters reported that Egypt’s government had finally sold a 9.5% stake in state-controlled Telecom Egypt EGP3.75bn ($121.6m) as it tries to meet a series of foreign debt obligations.
The two-part sale will reduce the government’s stake in Telecom Egypt to 70% from the previous 80%, with the other 20% floating on the Egyptian Exchange. Two local investment banks, CI Capital and Ahly Pharos, were managing the sale, according to Reuters.