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.’

Orascom Atributes Q3 Loss to Forex

Egyptian telecoms group Orascom Telecom has revealed a net loss for the three-month period ended 30 June 2010 on the back of unrealised foreign exchange losses.

In the second quarter of its 2010 fiscal year the company posted a net loss after minority interests of USD66.1 million, reporting that forex losses in the three-month period were USD120 million; by comparison, in the same period a year earlier Orascom posted a net profit of USD111.8 million.

The Egyptian company also noted that impairment charges in Algeria and start-up losses attributed to its Canadian operations had both impacted on the bottom line.

Revenues however fared better, with Orascom generating turnover of USD1.058 billion in 2Q10 compared with USD990.6 million a year earlier, a 7% year-on-year increase, although monthly average revenue per user (ARPU) continued to decline across all regions of operation.

In the three-month period Orascom reported that global ARPU was USD5, down 16.7% y-o-y, with Lebanon-based Alfa ad Egyptian cellco MobiNil reporting the largest declines, of 25% and 22.9% respectively.

In operational terms, Orascom saw subscriber growth at every one of its subsidiaries in the quarter, with the group’s total wireless customer base standing at 99.079 million at end-June 2010. Mobilink, Orascom’s Pakistani unit, remains its largest by subscribers, with the subsidiary adding just over 630,000 customers in the three months to 30 June 2010 to bring its total to 32.302 million.

In its home country meanwhile MobiNil, which accounts for the second largest number of Orascom’s total customers, reported 26.147 million subscribers at the end of the first half of 2010, up just 0.1% y-o-y, with the slowing growth attributed to new regulations and the shortage of new numbers.

Egypt Approves Tripple-Play Service

The Egyptian telecoms regulator, the National Telecom Regulatory Authority (NTRA), has given the go-ahead for two consortia to provide triple-play services to residential compounds in Cairo’s suburbs which contain between 50 and 5,000 housing units, Reuters reports. The announcement follows the NTRA’s revelation that it was making two geographically-restricted triple-play concessions available last October. As previously reported by CommsUpdate, in April 2010 two bids were received for the concessions, and commenting on the latest development, Amr Badawi, NTRA CEO, said: ‘The committee has finished its work, and we had two bids, and both bids were accepted.’ It is understood that of the two consortia, one is led by LINKdotNET Egypt, which was recently sold to mobile network operator Egyptian Company for Mobile Services (MobiNil), and includes affiliates of local telecoms group Orascom Telecom. The other licence-winning group is believed to include Vodafone Egypt.

Alongside the announcement that the triple-play concessions had been awarded the NTRA also announced that it had appealed against a court ruling which overturned a ruling it made in September 2008 lowering interconnection rates. Last month it was revealed that a Cairo court had reversed the NTRA’s ruling following an appeal by MobiNil. ‘We've appealed that, and our decision is still on... We believe that we have a just case and we will prevail at the end,’ Badawi said of the matter.

Orascom Sells Off ISP's

Egyptian telecoms group Orascom Telecom has announced the sale of its two local internet subsidiaries – LINKdotNET (Egypt) and Link Egypt – to mobile network operator Egyptian Company for Mobile Services (MobiNil) for USD130 million. According to Orascom, InTouch Communications, a wholly-owned Orascom subsidiary inked a share sale and purchase agreement with MobiNil, with the deal excluding the non-ISP part of Link Egypt's business, while the other non-connectivity business (LINK Development, LINKonLINE, Connect Ads, Arab Finance Brokerage Company and Arpu+) will also remain under the ownership of Orascom.

The announcement followed the revelation that last week MobiNil shareholders had agreed to the purchase, with the acquisition part of an agreement that settled the long-running legal dispute between Orascom and France Telecom, the two major shareholders in the cellco. Orascom had previously postponed the sale until the settlement of its dispute with the French company.

FT, Orascom Finally Agree On Mobinil

The long-running battle for control of Egyptian mobile network operator Egyptian Company for Mobile Services (MobiNil) looks close to being resolved after European telecoms giant France Telecom (FT) and Egyptian group Orascom Telecom announced that they had reached a tentative agreement.

According to Dow Jones Newswires, the proposed accord was announced by the two parties in conjunction with the Egyptian Ministry of Communications and Information Technology (MCIT), which had overseen negotiations. It is understood that under the terms of the deal MobiNil’s current corporate structure will remain unchanged, as will existing voting rights in the cellco, with a statement announcing the deal noting: ‘The two groups will continue their partnership on a renewed basis going forward, implementing a revised shareholder agreement but with no change to the existing ownership structure or their shareholders' voting rights ... This agreement will allow the two telecoms operators to contribute their respective know-how and added value to the successful and profitable development of MobiNil.’

Further, the proposals will also see the integration of local internet service provider LINKdotNET Egypt, at present a wholly-owned Orascom subsidiary, into MobiNil, while FT has also reportedly agreed to change its accounting methods to fully consolidate MobiNil. FT and Orascom claim that the agreement will include settlements for all existing disputes between the shareholders, and full details will be made public once the deal has been finalised, which is expected to be ‘within weeks’.

The revelation comes hot on the heels of the announcement earlier this week that an Egyptian court had upheld an appeal by Orascom which blocked a proposed buyout of MobiNil by FT; FT had offered EGP245 (USD44.4) per share for the stake it did not hold in the mobile operator. MobiNil is owned by MobiNil Telecom (51%) and Orascom Telecom (20%), with the remaining 29% publicly floated. MobiNil Telecom is itself owned by FT (71.2%) and Orascom (28.8%), but following an April 2009 ruling by the International Chamber of Commerce (ICC) Orascom was instructed to sell its stake in the holding company to the French outfit.

Ft and Orascom Plan to Resolve Dispute Over Mobinil

France Telecom and Orascom Telecom Holding have presented a joint plan to resolve their long running and acrimonious dispute over the ownership of Egyptian mobile network, Mobinil. The agreement, which has been signed today and will be finalized over the coming weeks, will effectively bring to an end all disputes in relation to their joint investment in Mobinil.

In a statement, FT said that the two groups will continue their partnership on a renewed basis going forward, implementing a revised shareholder agreement but with no change to the existing ownership structure or their shareholders' voting rights.

The agreement also includes the integration of LINKdotNET - the leading ISP in Egypt - into their holding company, ECMS, allowing the company, subject to the approval of its corporate bodies, to extend broadband and corporate communications services to its 26 million customers; and create value for its shareholders and its 3,500 employees. Dr. Tarek Kamel, the Minister of Communications and Information Technology welcomed this step as the merge between the mobile services and internet services.

Stephane Richard, CEO of France Telecom, said: "I am very satisfied that we have reached an agreement with an entrepreneur such as Naguib Sawiris. Our two groups will now be able to continue working together in order to further contribute to the development of telecommunications services and information technology in Egypt. This market is very important for France Telecom and we will continue to invest and contribute our know-how in the years to come. In addition, this will also reinforce our commitment to maintain a strong R&D and Orange Business Services presence in Egypt."

As a result of the amended shareholder agreement, France Telecom will change its accounting method and will fully consolidate ECMS (ECMS was consolidated through proportional integration in 2009 and before).

The amended shareholder agreement will avail Orascom Telecom Holding operational rights commensurate with its co-owner and strategic partner position, in addition to protection and liquidity rights. Going forward, Orascom Telecom Holding will consolidate its participation in ECMS through equity method.

The outlined agreement will include settlements for all the disputes between the shareholders, the details of which will be communicated once the comprehensive agreement has been finalized.

Court Blocks FT Share Offer For Mobinil

 The Egyptian Administrative Court has blocked a tender offer by France Telecom for shares in Egypt's Mobinil, citing principles of transparency and equal opportunity. At the heart of the matter is a long running dispute between France Telecom and Orascom Telecom Holding over control of the Egyptian mobile network operator.

Last March, ­the Arbitration Court of the International Chamber of Commerce ruled in favor of France Telecom, which has a 71.25% stake in a holding company, also called Mobinil, authorizing it to acquire the 28.75% interest in Mobinil held by Orascom Telecom.

Mobinil owns 51% of ECMS, Egypt's leading mobile operator, which markets its services under the Mobinil brand. This company is listed on the Cairo and Alexandria stock exchange. Orascom Telecom directly owns a 20% stake in ECMS.

Last December, the Egyptian Financial Supervisory Authority approved a tender offer from France Telecom for ECMS outstanding shares at EGP245 each. Orascom has appealed the offer to the court, saying the price is lower than the EGP273 originally agreed to by the international arbitrator. However, the arbitrator had also said that a lower figure could be offered, if France Telecom is able to justify the difference.

Mobinil Get's Central bank's Apprroval for Mobile Money Service

Egypt's central bank has granted BNP Paribas a preliminary approval for a mobile money transfer licence via local mobile network operator, Mobinil. The agreement with the mobile network and the banking regulator has to be formalised before the service can be launched.

Egypts Bans Ban On Skype Calls

Egypt’s National Telecommunication Regulatory Authority (NTRA) has confirmed that the country has begun enforcing a ban on international calls made via mobile internet connections, Reuters reports.

The ban applies to all three of Egypt’s mobile network operators – Egyptian Company for Mobile Services (MobiNil), Vodafone Egypt and Etisalat Mirs – and is expected to provide a much-needed boost to the fixed line revenue of monopoly landline provider, state-owned Telecom Egypt (TE). Clarifying the situation, Amr Badawy, executive president of the NTRA, said: ‘The ban is on Skype on mobile internet, not on fixed, and this is due to the fact it is against the law since it bypasses the legal gateway.’

Under existing regulations all international calls must be routed via TE’s network. Despite mentioning Skype by name, it is understood that the regulator may extend the ban to other services, with Badawy noting: ‘We are targeting any illegal voice traffic on the mobile (internet). Any traffic outside the international gateway is against the law.’ It remains unclear however whether such a restriction will be extended to fixed line internet connections.

Mobinil Sets Deadline For LINKdotNET Acquisition

Egyptian Company for Mobile Services (MobiNil), Egypt’s largest mobile network operator by subscribers, has revealed that it has set a deadline by which it aims to complete the acquisition of broadband provider LINKdotNET (Egypt), Reuters is reporting.

MobiNil, which is currently at the centre of an ownership dispute between France Telecom and Egyptian telecoms group Orascom Telecom, has said that it aims to finalise the acquisition of LINKdotNET from Orascom within a month, with MobiNil chairman Alex Shalaby noting: ‘We have set an internal target, within the board, that we would like to see this completed and concluded within 30 days, within a month from the board meeting yesterday [9 March].’ The development follows reports in December 2009 that saw Orascom announce it had suspended sale talks until the MobiNil ownership dispute.  Earlier this week it was reported that an Egyptian court had delayed the next ruling on the matter until 27 March.

Mobinil Reports USD 1.9 Billion Revenues

Egyptian cellco MobiNil has posted revenues of EGP10.8 billion (USD1.9 billion) for 2009, up 8% year-on-year, on the back of strong subscriber growth. EBITDA grew by 9% during the period to EGP5.1 billion while net income came in at EGP2 billion, up 3%.

At 31 December the active subscriber base stood at 24.1 million, up from 19.2 million twelve months previously. Average monthly ARPU across the year fell from EGP46 in 2008 to EGP39 in 2009 in light of fierce competition between MobiNil and rival cellcos Vodafone Egypt and Etisalat Misr (Nile Telecom).

Court Delays Ruling On Mobinil Case

An Egyptian court has pushed back the date for a decision on the shareholding dispute between Orascom Telecom and France Telecom (FT) related to mobile network operator Egyptian Company for Mobile Services (MobiNil), Reuters reports. The court has set a date of 6 March for the next hearing in the matter, after lawyers for the two sides put forward their cases on the back of a ruling by the same court earlier this month that rejected a bid from FT for the shares in MobiNil it does not currently hold.

In separate but related news, Bloomberg reports that an Egyptian judiciary committee, in a recommendation to the court, has said that the original verdict preventing the French company from acquiring the shares at the price put forward should be upheld. In line with previous criticisms of this, and other earlier offers, the committee argued that the EGP245 (USD44.65) per share offered by FT in December 2009 was too low and was ‘unfair’ to minority shareholders. In addition, the committee’s report claimed that the Egyptian Financial Services Authority (EFSA), the country’s financial regulator, did not provide ‘sufficient reasons for agreeing to France Telecom’s per-share offer of EGP245 per share.’

Egypt Mulls Over 4th Mobile Licence

Eygpt may consider offering a fourth mobile operator licence, reports the Reuters news agency, citing the local al-Mal newspaper. The tender for the license is being a Damoclean Sword being held over the incumbent operators if they do not adapt recent rulings on the tariffs they charge to customers.

"There are no obstacles to issuing a fourth mobile licence in Egypt ... but offering the licence will mainly depend on market demand in the coming period," the paper quoted Amr Badawi, head of the National Telecommunication Regulatory Authority (NTRA), as saying.

The newspaper added that the operators have objected to recent pricing policies issued by the regulator.

"Before setting these rules and regulations, we sent queries and surveys to the mobile operators but we received no replies from the companies ... (They) have the right to approach the administrative court to object about the authority's decisions," Al Mal quoted Badawi as saying.

Egypt currently had three operators, and based on figures from the Mobile World analysts, their market shares are: Mobinil (45.2%), Vodafone (42.6%) and Etisalat Misr (12.2%). The country has a population penetration level of 62%.

The regulator is already planning to issue two fixed line licenses aimed at triple-play operators outside the capital, Cairo.

Mobinil Denies It's Late In Paying 3G Dues

­Egypt's Mobinil has refuted local media claims that it is late in making payments for its 3G radio spectrum. Although there is a delay in making the payment, the company says that this is due to the late release of radio spectrum by the telecoms regulator, not a failure at its end.

"The payment is ready and we can do it at any time," Mobinil CEO Hassan Kabbani told Reuters, adding that the payment would be made once the firm received the spectrum frequency and other information related to the licence.

The Al Borsa newspaper reported earlier this week that Mobinil had fallen behind on the EGP750 million payment.

The company faced multiple delays in being granted access to its radio spectrum in 2008 when it was originally awarded its 3G license. The company was forced to delay the launch of its network, and at the time, also deferred payments to the regulator until the spectrum was released.

Egyptian Court Rules Against France Telecom

With the blocking of France Telecom’s offer for minority stakes in
the Egyptian mobile operator by Egyptian court, all hopes of the
operator to take full control of ECMS were dashed. The decision was
taken after the price of €1.5bn offered by France’s group to for
outstanding stakes in ECMS, due to expire on Thursday was considered to
be too low.
The decision is pronounced as victory of Orascom Telecom, locked in
a lengthy battle with the former French monopoly for control of Egypt’s
largest mobile company. The ownership and strategy of France Telecom,
the largest mobile operator in the Middle East by subscribers will also
loom in uncertainty because of the decision.
ECMS is controlled via Mobinil by France Telecom and Orascom in which France Telecom owns 71.25%, Orascom 28.75% and Mobinil owns 51%.
The two owners have been at loggerheads for years over a strategy for
the Egyptian operator.

Orascom Loses Appeal In Case Against France Telecom

An Egyptian regulator has turned down an appeal by Orascom Telecom against its previous ruling that could allow a France Telecom subsidiary to buy up Egypt's biggest mobile services provider.

The Egyptian Financial Services Authority said in a statement published on Sunday that it has upheld its earlier decision approving an offer by Orange Participations to buy up OT's shares in the Egyptian Company for Mobile Services for 245 Egyptian pounds ($45.40) per share.

The dispute stems from an arbitration court ruling in March in favor of the French company. The Paris-based company holds a 71.25 percent stake in Mobinil. The court authorized it to acquire Orascom's 28.75 percent stake in Mobinil.

- AP News

Regulator Thinks France Telecom's Offer For Mobinil Is Too Low

France Telecom's appeal in its bid to buy the remaining shares in Egypt's Egyptian Co. for Mobile Services has been rejected by the country's financial regulator. The Egyptian Financial Supervisory Authority rejected the offers by France Telecom to acquire the remaining shares as too low, saying they were less than the price set by an arbitration ruling for the majority of the company.

"Today it was a decision of a judicial committee, which has decided to reject the claim and approve the decision of the authority," said Khaled Serry Seyam, the deputy chairman of the Capital Markets Authority.

"We didn't think that the regulator would go back on their decision," Marise Ananian, an analyst at Cairo-based investment bank EFG-Hermes Holding told Bloomberg News. "Giving one price to Orascom Telecom in the Mobinil Telecom consortium and offering another to minority shareholders of the Egyptian Co. for Mobile Services was unacceptable to the regulator and France Telecom didn't provide any information to justify it."

France Telecom and Orascom Telecom Holding have been in dispute ever since France Telecom won an arbitration ruling this year requiring Orascom to sell its stake in Mobinil, a holding company that owns a stake in the mobile network operator, also known as MobiNil.

France Telecom Makes New Bid In Mobinil Dispute

­France Telecom is reported to have made a new offer to buy all the shares in the Egyptian Company for Mobile Services (ECMS) in a new move to resolve the ongoing row with Orascom Telecom over their joint holding in Egypt's MobiNil.

In a statement though, the Egyptian Financial Supervisory Authority (EFSA) said that it has rejected the tender offer represented by France Telecom, to buy up to 100% of ECMS.

The mobile phone network - which trades as MobiNil - is owned by a holding firm, ECMS - which is in turn owned by three parties, 20% directly by Orascom Telecom, 29% via the stock exchange and the remaining 51% is owned by a company, confusingly called MobiNil. This holding company is in turn 71.25% owned by France Telecom and 28.75% owned by Orascom Telecom.

Following a ruling earlier this year from the Arbitration Court of the International Chamber of Commerce (ICC) there has been a dispute between the two main shareholders over a requirement to sell some, or possibly all, of the shares to France Telecom.

The company is the largest operator in the market, and according to figures from the Mobile World database, has a market share of around 48%.

France Telecom Bids for Mobinil

A unit of France Telecom has submitted an obligatory tender offer to buy all the shares of Egyptian mobile operator Mobinil, Egypt's market regulator said on Tuesday.

The Capital Markets Authority said it was studying the offer by Orange Participations, but gave no further details. A Mobinil spokesman declined immediate comment.

Mobinil, one of three mobile operators in the most populous Arab country, has been at the centre of a dispute between regional operator Orascom Telecom and France Telecom.

Egypt's market regulator had said that France Telecom should tender to buy all shares in Mobinil as part of a court ruling that it purchase Orascom's stake in a holding company that owns 51 percent of Mobinil.

Mobinil posted a 6 percent fall in net income last month for the first quarter of 2009 to 424 million Egyptian pounds ($75 million), missing most analysts' forecasts as it faced higher interest costs.

The Egyptian stock exchange said it had suspended trade on Mobinil shares until the markets authority finishes studying the offer. Shares had jumped more than 6 percent on Monday on speculation of a pending offer to end at 204.97 pounds.

- Reuters

Mobinil Q1 Profits Fall Below Forecasts

Eygpt's MobiNil, which is in the midst of a tussle between Orascom and France Telecom has posted a 6% drop in first-quarter profits to EGP424 million (US$75 million) - below most analysts expectations. Imputed interest amounts relative to 3G installment payments charged during the first quarter amounted to EGP 29 million and higher interest costs are the main driver for the decrease.

Revenues of EGP2.49 billion (US$445 million) was up on the EGP2.26 billion a year earlier. Capital expenditure for the first quarter reached EGP 420 million (US$75 million).

Mobinil ended the quarter with 21.179 million subscribers which represents an increase of 31% or 1.064 million net additions.

Commenting on first quarter 2009 results, Alex Shalaby, Chairman said: “Mobinil continued to grow in tough economic times and delivered on its identified growth strategy. This again confirms Mobinil’s success in building ties with its customers by providing quality services. In difficult economic conditions it is also gratifying to see Mobinil achieving on its profitability."

First quarter blended ARPU reached EGP 39 (US$6.97) with a decline of 16% over the same period last year mainly driven by the change of subscriber mix as the firm continues to penetrate lower market segments.