Orascom Reports Losses of US$170 Million

Egypt’s Orascom Telecom has posted a net loss of USD169.53 million in the last three months of 2010 on the back of both the depreciation of the local currency against the US dollar and increased pressure in foreign markets.

The company noted that as its primary accounts are held in Egyptian pounds the appreciation of the US dollar against the local currency had ‘had a significant effect on the mark to market value of the US dollar denominated debt at Orascom Telecom Holding of approximately USD3.5 billion.’ 


For the twelve months ended 31 December 2010 Orascom posted a net profit of USD781.45 million, more than double the USD378.63 million reported for 2009, which the company attributed predominantly to gains recognised as a result of its revised agreements with France Telecom regarding the ownership of Egyptian cellco MobiNil.

In terms of turnover, in 4Q 2010 Orascom reported revenues of USD980 million, while full-year revenues totalled USD3.825 billion, up 2% year-on-year; Orascom noted that it was not including results from Orascom Telecom Tunisia, which the company agreed to sell in January 2011.


All of the group’s subsidiaries reported revenue growth bar Algerian operator Djezzy, which Orascom noted had endured ‘the persistence of an adverse operating environment.’ Earnings before interest, tax, depreciation and amortisation (EBITDA) in 4Q10 stood at USD402.24 million, while in FY2010 it was USD1.584 billion, up 4% y-o-y. 

At end-December 2010 Orascom’s consolidated subscriber base was 101.683 million, with its Pakistani unit, Mobilink, accounting for the largest number of those, some 31.794 million, up 3.2% against end-2009. MobiNil reported a wireless subscriber base of 30.225 million at the end of the year, up almost 20% against end-2009, while the largest percentage increase was reported at Telecel Globe – which comprises the group’s operations in Namibia, Zimbabwe, the Central African Republic and Burundi – where customer numbers increased by 77.8% to 3.242 million.


Bangladeshi unit Banglalink meanwhile reported a subscriber base of 19.3327 million at 31 December 2010, up almost 40% compared to the same date a year earlier, which Orascom said was the result of aggressive acquisition and strong customer retention strategies.

Commenting on the results Khaled Bichara, Orascom’s Group CEO, said: ‘The year 2010 has proven to be a year of significant milestones aiding the growth of Orascom Telecom Holding on an operational and strategic level.’

SEACOM Expands to Five More African Countries

East African submarine cable operator SEACOM has announced that its services are now accessible from five additional African nations: Botswana, Lesotho, Namibia, Swaziland and Zimbabwe. The network expansion is coupled with increasing resilience through its recent acquisition of east and west coast submarine cable capacity. SEACOM’s approach of partnering with established players to provide broadband services will continue as it develops its products and services based on resiliency, service quality and flexibility in line with customers’ evolving needs.

Suveer Ramdhani, SEACOM’s Head of Product Strategy, said: ‘This latest development is integral to the continued development and expansion of the SEACOM network in Africa and in particular to countries that have had limited access to broadband connectivity. We will continue to build relationships to meet our customers’ growing need for resilient and seamless capacity. This is part of SEACOM’s objective to build the African internet.

Infraco To Launch Broadband In November

Broadband Infraco, the new State-Owned Enterprise (SOE) that will sell high capacity long distance transmission services to network service providers in South Africa, has confirmed that it will unveil its new ZAR1 billion (USD144.1 million) network during the third week of November.

The company has been plagued by licensing issues since its inception three years ago. The Broadband Infraco Act of 2007 stipulates that telecoms regulator the Independent Communications Authority of South Africa (ICASA) is obliged to issue Broadband Infraco both an Individual-Electronic Communications Network Services (I-ECNS) licence and an Electronic Communication Services (ECS) licence.

However, commercial ISPs objected to it receiving an ECS licence, as they claimed it would give the company an unfair advantage. In January 2010 ICASA bowed to communications minister Siphiwe Nyanda's policy directive, and only awarded the I-ECNS concession.

Broadband Infraco has since confirmed that it will operate exclusively within a wholesale business model, targeting both fixed and mobile operators, as well as internet service providers. Licensed operators may buy multiple capacity increments of 155Mbps - up to 10Gbps. Broadband Infraco’s lowest capacity service reportedly offers transmission speeds akin to 20 HD movies being screened simultaneously.

CEO Dave Smith commented: ‘In anticipation of receiving the I-ECNS licence, Broadband Infraco installed some 11,765km of fibre optic cable connecting Johannesburg, Pretoria, Cape Town and Durban and other large metropolitan centres including Bloemfontein, Kimberley, Port Elizabeth, East London, Nelspruit and Polokwane. The award of the Electronic Communications Services (ECS) licence from ICASA is the remaining piece of the puzzle for Broadband Infraco to deliver entirely on all aspects of its statutory mandate in accordance with applicable legislation’. According to Broadband Infraco, its network also extends connectivity to the borders of South Africa’s neighbouring countries, namely: Namibia, Botswana, Zimbabwe, Mozambique, Lesotho and Swaziland. The fibre-optic cables are scalable up to hundreds of gigabits of data per second, depending on future growth.

Telkom SA Prepares to Spread Into the Rest of Africa

SOUTH African Telecommunications operator, Telkom, has secured operating licences in east, south and west Africa, the company revealed on Monday in an interview.

Responding to questions, Telkom spokesman Pynee Chetty said the telecoms giant had secured operating licences in Nigeria, Zimbabwe, Tanzania, Ghana, Kenya, Uganda, Zambia, Swaziland and Namibia.
“Telkom’s ambition is to become a significant Information Communication Technology (ICT) player in Sub-Saharan Africa, focusing on the enterprise market.

“Apart from the satellite-based (SAT3) cable system, Telkom has invested in the new WACS, EASSy and SAFE submarine cables systems to further strengthen its position with regards to connectivity on the African continent,” said Chetty.

He said the operations in those countries consisted of consumer and enterprise solutions within the respective markets.

Chetty said Telkom would continue to service all these markets and acquire capabilities, through partnerships or own assets, to meet the demands of the local African enterprise and global multinational customers.
“The company continues to investigate opportunities in Africa and endeavours to expand into countries where customer demand warrants such actions.
“As far as the specific products and services are concerned, it is logical to utilise existing skills and capabilities acquired in the domestic market as far as possible when entering new markets,” said Chetty.

Icasa Rushes Through Mobile TV Licences

South African broadcasting and telecoms regulator The Independent Communications Authority of South Africa (Icasa) is racing against time to issue mobile TV licences in time for the Soccer World Cup tournament starting on 11 June. Robert Nkuna, an Icasa councillor, was reported as saying that two multiplexes have been set aside for mobile TV. One multiplex can carry up to twelve TV channels, depending on the technology used. No company will be allowed to occupy more than 60% of a multiplex. MultiChoice, which has been testing mobile TV technology by streaming some of its existing pay-TV content to cellphones over the past three years in cooperation with various wireless network operators, is planning to apply for a licence. Its parent company, Naspers, said last year it had set aside ZAR98 million (USD13.4 million) for mobile TV services, which it has already launched in Kenya, Nigeria, Ghana and Namibia.

Interested parties have three weeks to submit their applications to Icasa. Nkuna said mobile TV licences would be offered on a technology-neutral basis. The second multiplex will be available after the regulator has opened the market for the second round of pay-TV licences.

In a separate announcement, Icasa has suggested an aggressive cut in mobile and fixed interconnection rates. The regulator has proposed a three-year glide-path for both mobile and fixed service licensees: mobile interconnection rates, currently set at ZAR0.89 per minute, are proposed to be reduced to ZAR0.65 from July 2010 and further reduced to ZAR0.40 from July 2012. Furthermore Icasa has proposed that fixed line interconnection rates be reduced to ZAR0.15 from July 2010 and ZAR0.10 from July 2012. Hearings related to the draft wholesale call termination regulations are set to be held at the beginning of June, and are set to be in place by the end of the month.

Orascom Buys Namibia's Cell One

Telecel Globe, a subsidiary of Orascom Telecom, has acquired the Namibian mobile network operator Cell One for USD 59 million in cash, of which USD 32 million was already paid and the balance is due in January 2010.

Cell One operates a GSM 900/1800 network and has 198,000 active subscribers and over 20 percent market share. The acquisition will further enable Cell One to grow its customer base and deliver new services. Namibia had a mobile penetration of close to 50 percent at the end of 2008. 

These acquisitions are part of Telecel Globe's strategy to target licences and mobile operators in small and medium-sized developing countries that have high growth potential.