* Revenues, EBITDA, net profit all beat forecast in first
* Company expects revenue growth to double over course of
* EBITDA down 32 percent y/y in Q1 but to remain stable in
* No further details on new mobile venture
(Recasts with CEO'S growth forecasts)
By Yasmine Saleh
CAIRO, May 14 Telecom Egypt (TE)
expects three to four percent growth in revenues in 2013, at
least doubling that in the first quarter as it struggles to deal
with the decline of its fixed-line business and an economy in
The state monopoly has been battling to raise its share of a
developing mobile phone market in the Arab world's most populous
country, but is still waiting to launch a new operator that
would rival its existing joint venture with Vodafone and
the sector's two other players.
Regulators said in December they would grant the licence in
mid-2013 while pushing forward with plans to allow other mobile
companies the right to use Telecom Egypt's fixed-line network -
on which it has based its internet business.
In an email to Reuters after first quarter results, Mohamed
Elnawawy also said he expected capital expenditure for the year
to be between 1 and 1.2 billion Egyptian pounds and earnings
before interest, taxes, depreciation and amortization (EBITDA)
in 2013 to remain stable compared with 2012.
Net profit in the first quarter beat analysts' forecasts at
858 million Egyptian pounds ($123.20 million), just 6 percent
lower than a year ago.
EBITDA, a key measure of profitability for telecoms
companies, was down 32 percent at 947 million pounds, but the
company said its EBITDA margin was 34.8 percent in the first
quarter and would remain in the "mid-30s" - a relatively healthy
figure compared to other telecoms worldwide.
Elnawawy said he is working to develop "a number of
competitive services for the launch of mobile operations... but
it is still too early to go into further details as the dynamics
of the market continue to change."
Revenues in the first quarter rose 1.4 percent to 2.72
billion Egyptian pounds.
The average forecast for the company, whose data services
are helping offset lower fixed-line income, was for net profit
of 595.34 million pounds from six analysts polled by Reuters and
revenue of 2.59 billion pounds based on five analysts.
Egypt has three mobile operators: Vodafone Egypt, Mobinil
, which is controlled by France Telecom, and
The growth of those businesses is steadily eating away at
Telecom Egypt's traditional fixed-line services as Egyptians opt
to run mobile phones and internet instead, forcing the company
to seek ways of expanding its exposure to mobile.
The company has to share its profits from a 45 percent stake
in Vodafone Egypt with its international partner and has been
blocked for some time, largely by Egypt's unstable political
scene, from pushing ahead with the plan for its own provider.
Elnawawy said he does not expect the mobile companies to
offer fixed-lined services yet would welcome that if happened.
The company's business in fixed-line internet is the one area
where it is prospering.
"We do see growth in our retail segment of our business via
Telecom Egypt Data, for which revenues alone grew 28.9 percent
in the first quarter of 2013, compared with the same period one
year ago," he said.
"Increasing use of smart phones and the growth in internet
penetration have played an important role and Telecom Egypt is
well placed to meet the demands of an increasingly connected and
mobile population," Elnawawy said.
($1 = 6.9645 Egyptian pounds)
(Writing by Yasmine Saleh, additional reporting by Ehab
Farouk,; Editing by Patrick Graham)