TE (Telecom Egypt) and Vodafone Egypt have reached to an agreement on telecommunication infrastructure sharing. The telecom companies have signed a two ten-year transmission and infrastructure agreements with a total value of US$620 million.
The transmission agreement covers the current networks of Vodafone in Egypt and the investments they will make in the future for domestic transmission services for both fixed and mobile.
The infrastructure sharing agreements represent new cooperation between the two companies, where Telecom Egypt will avail fiber backhauling capacity to Vodafone Egypt’s network.
Vodafone Egypt has also proposed a dividend of US$690 million, of which Telecom Egypt’s share is 45%, which is the equivalent of 310 US$million. The dividends will be paid on two installments. The first payment amounts to US$270 million will be paid in March 2019 and the remainder will be paid in June 2020.
Since its inception, Vodafone Egypt has made a series of acquisitions. Vodafone Egypt entered the Egyptian telecom market as the second operator in 1998 and its name was Misrfone Telecommunication Company (Click GSM).. That was a consortium between Vodafone international, Air Touch, and local/ international partners. Vodafone Group acquired Air Touch share in 1999 and acquired International Partner VIVENDI France share in 2002. In January 2002, Click GSM was rebranded to Vodafone Egypt.
Since 2007, Vodafone Egypt’s shareholder structure consisted of Vodafone Group with 54.93 %; Telecom Egypt with 44.94% and a minority free float of 0.13%.
Vodafone Egypt launched its off-shore operations under the name of Vodafone International Services in 2006. Vodafone Egypt completed a full acquisition of Raya Telecom in June 2007; a step that complemented Vodafone’s mobile communications capabilities with Raya’s expertise in fixed-line data communication and corporate solutions.
The network and telecommunication service sharing agreements will complement both Telecom Egypt and Vodafone to serve its customers with a wide set of voice and mobile internet services.
Director & CEO of TE, Mr. Adel Hamed;
“We are pleased to have reached a deal that is mutually beneficial to both parties. Vodafone Egypt is not only a strategic partner in the Egyptian market, but also a successful investment for Telecom Egypt. The agreements secure the growth of TE’s domestic wholesale revenue stream for the long-term and prove that we are the partner of choice for domestic mobile operators. Additionally, we are delighted that we have finally reached an agreement with Vodafone Group on our share of retained earnings in Vodafone Egypt. Telecom Egypt plans to utilize the cash inflow to deleverage closing all the facilities in EGP to reduce the financing expenses enhancing its profitability, in addition to support its cost-cutting initiatives, and continue its strategic investment plans to benefit the telecom industry in Egypt.”
CEO of Vodafone Egypt, Mr. Alexandre Froment-Curtil:
We at Vodafone value the partnership with Telecom Egypt; we believe that the confidence of Telecom Egypt board and the Government to invest in Vodafone business shows how strong and successful is Vodafone. With the agreements we are signing today, we have confidence in the future of our business in Egypt, as well as in our partnership with Telecom Egypt. The good news for our 44mn customers is that by this agreement, they can soon enjoy the higher speed and quality fixed- line internet, as well as the highest 4G and 4G+ speed and quality. “The future looks exciting for both of us, signaling more opportunities for growth, with stability and visibility of the economy. We believe that the distribution of dividend to our shareholder Telecom Egypt will help in building fantastic infrastructure for the country.”