Mobinil, which this week reported third-quarter earnings that undershot analyst forecasts, is battling with Vodafone’s local affiliate for top spot in the country’s fiercely-competitive mobile market.
The industry has faced dual headwinds this year as mobile phone usage in the country of 80 million people reached saturation point and a popular uprising shook the economy and disrupted communication services.
Mobinil, a venture of Orascom Telecom and France Telecom which sits just behind Vodafone Egypt by subscribers, is pushing into data services to boost profits.
“We will return to regular profit in 2012 if matters stabilize as they were in 2010,” Chairman Alex Shalaby told the Reuters Middle East Investment Summit.
He blamed Egypt’s economic turmoil for Mobinil’s relatively weak performance so far this year, but also took a swipe at the government by blaming “the unbalanced competitive environment” which handed an advantage to his competitors.
“We were waiting for the responsible authorities to play a bigger role to guarantee the soundness of competition,” said Shalaby.
Shalaby said: “Overall the performance was not satisfying. We started falling back and we lost our status in terms of the client numbers at the end of last year and the start of 2011,” he said.
Shalaby said Mobinil wanted to regain the number-one spot in terms of subscribers in 2013 by focusing on customer service and network quality.
It wants to push into high value-added data services and had enough cash to press ahead with its projects, including a push into fourth-generation network technology, he said.
“I hope that we can, in 2012, start a trial operation for the service,” he said.
The company had no need for bank loans for now but might resort to borrowing in 2012, raising cash within Egypt in the local currency, to help finance expansion and new client services, said Shalaby.
Despite posting a loss overall for the first nine months of 2011, Shalaby suggested that Mobinil might still pay dividends.
“To our best ability, we will distribute the profits we can,” he said.
“We have to take into consideration the events that we are going through and not expect the same results as before.”
Mobinil’s parent company Orascom Telecom was folded into Russian group Vimpelcom under a merger deal sealed in April.
Mobinil and some other Orascom assets are now being split from the merged company under the terms of the Vimpelcom deal.
