(This story was originally published Monday.)
DUBAI (Zawya Dow Jones)--Egyptian Co. for Mobile Services
(EMOB.CI), known as Mobinil, Monday swung to a first-quarter net
loss of 74 million Egyptian pounds ($12.3 million) on higher
depreciation and amortization costs, but aims to boost its
broadband subscriber base to offset local competition.
Mobinil booked a net profit of EGP23 million a year earlier, it
said in an e-mailed statement.
Analysts at Cairo investment bank Beltone Financial forecast a
EGP48 million net profit, while Naeem Brokerage estimated a EGP5
million profit.
"The high depreciation and amortization resulting from the
partial swap of the network from [second generation] to [third
generation] in a continuous effort to modernize the network
continues to weigh on the net result," Mobinil said in the
statement.
Mobinil said it directed its efforts in the first quarter
towards improving the quality of the subscriber base and boosting
further data, value-added services and fixed and mobile broadband
services.
Its total fixed broadband subscribers reached 418,000, a 19.4%
year-on-year increase. Post-paid subscribers grew 15.9%
year-on-year, "reflecting successful execution of targeted
strategy," Mobinil said. The total mobile-subscriber base stood at
32.6 million subscribers by the end of March, an 7.5% increase from
the same period last year.
Mobinil has been hit over the past year by an erosion of revenue
from its voice operations. Mobinil had been the market leader in
terms of subscribers until 2009, but local rivals Vodafone Egypt
and Emirates Telecommunications Co., or Etisalat, have been eating
up its market share.
Mobinil Chief Executive Yves Gauthier told Zawya Dow Jones in
December that he sees the company's mission as becoming Egypt's
"main broadband operator," rather than chasing market share at the
lower end of the voice market, where the company has lost its role
as market leader.
Meanwhile, Mobinil said that its outlook for 2012 is still
subject to a number of uncertainties such as the difficult and
volatile political climate that continues to heavily weigh on the
economy and an unstable regulatory environment. However, achieving
growth and improving margins are expected, it said--subject to
stabilization of the general environment and the normalization of
competition.
Blended average revenue per user, or ARPU, was EGP23.5 in the
first quarter, compared with EGP25.1 a year earlier. First-quarter
revenue increased 3.9% to EGP2.5 billion from the same period a
year ago.
France Telecom, one of Mobinil's shareholders, said last week
that the Egyptian regulator has authorized its offer for a stake in
Mobinil. The tender offer is part of a France Telecom effort to
take control of the Egyptian operator in a deal worth about EUR1.5
billion.
Egypt Mobinil shares closed flat at EGP195.05.
-By Shereen El Gazzar, Dow Jones Newswires; +971 444 61684;
Shereen.elgazzar@dowjones.com
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