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Telecom Egypt, Orange sign bitstream services deal

Telecom Egypt, Orange sign bitstream services deal

Orange Egypt has signed a new agreement to provide Telecom Egypt with infrastructure and transmission services over the next three years.

Telecom Egypt, in partnership with Orange, will move on from copper and leverage its own investment in fibre technology as part of its upgraded network.

Ahmed El Beheiry, Managing Director and CEO of Telecom Egypt said, "The agreement is important to Telecom Egypt as it allows it to grow the strategic partnership with Orange Egypt and the volume of business between the two companies. It also boosts Telecom Egypt's leadership in the infrastructure services and allows it monetise the huge investments it has undertaken over the last few years to modernise its network."

El Beheiry signed the agreement with Orange Egypt CEO Jean Marc Harion.

Telecom Egypt does not anticipate an immediate impact on its bottom line because the new services will replace those provided previously on the copper network.

"However, it is expected that the impact will be visible over the medium term given that the pricing of the new services is capacity based," Read a statement issued by the company to investors.

The pricing structure in the agreement allows ISPs in the market to upgrade to bitstream services instead of the old local loop unbundling services and at the same time provide Telecom Egypt with a charging tool to capitalise on the expected growth in the data market, according to the two mobile operators.

Telecom Egypt adds that pricing of services in terms of the agreement is based on the capacity utilised, although there will be a minimum commitment.

Delivering on promise of closer ties

Three months ago, Telecom Egypt and Orange Egypt jointly announced they had reached a settlement over a dispute between them relating to interconnection, leased lines and international services between 2008 and October 2017.

At the time, El Beheiry said resolution of that dispute would lead to closer cooperation by the telcos in future.

"This marks the complete resolution of the longstanding legal disputes with Orange. The settlement agreement strengthens our collaboration and paves the way to the framework we will agree on in the future. We look forward to expanding our business relationship with Orange," El Beheiry emphasised

In January, Telecom Egypt announced that its budget for the 2018 financial year had been approved by its board of directors including forecast of total revenue growth for 2018 in the range of "high single digit to low double digit" as well as EBITDA margin in the mid-to-high twenties and CAPEX to sales ratio of 30%.

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