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Telecom Egypt secures better roaming deal with Etisalat

Telecom Egypt secures better roaming deal with Etisalat

Telecom Egypt (TE) and Etisalat Misr have agreed to amend an existing national roaming contract, first signed in June 2017, which TE believes will lead to an improvement in service quality to customers and financial gain for the company.

The five-year agreement allows TE to roam on Etisalat Misr's voice and data network in Egypt.

Ahmed El Beheiry, Managing Director and CEO of TE, did not specify the amount that the company will save from the renegotiated deal, but confirmed it is valid until 2022.

The roaming deal is one of several finalised by TE over the last few months in an effort to improve its network.

Deals include a US$200 million long-term loan with Chinese financial institutions, including the Bank of China and China Export & Credit Insurance Corporation (Sinosure) facilitated by Huawei, as well as investment of US$90 million for the acquisition of Middle East and North Africa Submarine Cable (MENA Cable) system by reducing the 2017 dividend.

TE also signed a letter of intent with Etisalat Misr in an attempt to secure a preferential rate on mobile terminations.

"The letter of intent aims to put a framework for the interconnection rate between both operators and is considered the first arrangement on mobile interconnection for Telecom Egypt," TE stated in communication to investors.

El Beheiry said, "The signing of these agreements with Etisalat Misr is a crucial and beneficial step for Telecom Egypt as it enhances the company's profit margins as well as the quality of service provided to its mobile customers. The agreements are also a testament of the strong partnership developed with Etisalat Misr across several services including international voice services, national roaming, site sharing as well as the anticipated partnerships in access services. It is important to note that the signing of these agreements is a step in the company's strategic plan, which aims to improve the margin of mobile services through reducing the relative cost of national roaming and interconnection concurrently with the continuation of the roll-out of Telecom Egypt's own 4G network."

Hazem Metwally, CEO of Etisalat Misr said "We are pleased with the signing of the national roaming and mobile termination agreements with Telecom Egypt. Such agreements are mutually beneficial for both companies as well as their customers. Etisalat Misr has the best coverage and the most advanced technology in the Egyptian market, which enables it to provide the best quality service to its customers."

TE's consolidated revenue for Q1 2018 came in at EGP 4.8bn increasing by 15.4% to EGP 638 million YoY. The telco also signed a settlement to a dispute on international calls services with Etisalat during the same period resulting in payment of US$ 48 million to Etisalat Misr.

Following the release of its FY 2017 results in January 2018, TE forecasts total revenue growth for 2018 to be in the "high-single digit to low double digit" range, as well as an EBITDA margin in the mid-to-high twenties and CAPEX to sales ratio of 30%.

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