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Etisalat Egypt targets 10% growth next year: CEO

Etisalat Egypt targets EGP 10bn investments over next five years, allocates EGP 2.5bn per year to improve network’s service

By Mohamed Alaa Eldin

Etisalat Egypt aims to achieve growth rates of up to 10% in the Egyptian market over the next year, according to Engineer Saeed Al-Hamli, CEO of Etisalat Egypt.

In an exclusive interview with Daily News Egypt, Al-Hamli said that the growth rate targets come as the company plans to invest at least EGP 10bn over the next five years.

Al-Hamli revealed that his company will invest approximately EGP 2.5bn annually to modernise its networks infrastructure. This move seeks to improve the level of service provided to customers, while the company plans to raise its investments in the local market to EGP 5bn annually.

How does founding company, Etisalat Emirates, view Egypt’s communications market?

The Emirates Communications Group considers its branch in Egypt, represented in Etisalat Egypt, as one of the most important companies in the group that owns operators in 19 countries across the world. Etisalat Egypt is one of the best three companies in the group. The Egyptian market is a big one. It is diversified and highly competitive, and is thus full of investment opportunities that will enable companies to provide multiple services that benefit consumers.

What is the added value and interest Etisalat seeks to achieve in the Egyptian market?

At Etisalat, we seek to provide the latest technologies that add to our customers and meet their needs. We are leading the market in the field of data, in which the company sought to intensively invest since it started its operations in the market. Recently, we have invested in the area of cloud computing, to be the first company in the Egyptian market that offers this service to its customers.

What are the challenges facing Egypt’s telecommunications market?

The telecommunications market is currently highly competitive, and this is a positive factor as it falls in the interest of consumers. The most important thing the Egyptian market needs right now is the improvement in the level of services provided. There are several challenges in the sector that must be eliminated. The most important of these challenges is the presence of disputes between companies working in the sector, especially in the area of infrastructure, and the issues that arose from steps taken by Telecom Egypt (TE) towards improving it.

We hope that a clear working plan would be announced, with precise time frames in order for market trends to be clear during the upcoming period, most importantly, the activation of the fourth network and new frequencies of 4G, in addition to the unified licence, to provide an atmosphere of transparency and fairness in the competition, which allows companies to provide the best services to customers. We also hope to develop a system that ensures charging companies operating in the market equally in order to provide equal investment opportunities, as well as addressing any monopolistic practices by any company operating in the market, especially in services that can be provided exclusively.

What alternatives are the company considering to get new funding to cover its expansions?

The company has already obtained a new credit facility, in addition to the current one, worth EGP 7bn, in order to cover our growing needs for the development and continuous expansions of our networks.

How much is the amount of funding the company is trying to obtain during the next phase?

The required amount to finance the company’s expansion plans is linked to the size of continuous developments and the need for them, especially in the field of technology. There is a growing need for new financing with the launch of new services, such as the 4G services. It is expected that at least EGP 10bn would be invested over the next five years, and this amount may increase if attractive investment conditions were available, supported by encouraging laws and legislations.

What are Etisalat’s target growth rates next year?

Etisalat Egypt is one of the best models of third entrants in the world, in terms of operational results achieved. The company is seeking to achieve high growth rates that guarantee it an influential presence in the Egyptian market, which is part of the group’s strategy. We aim to reach a growth rate of 10% next year.

What is the share acquired by the networks sector (maintenance and establishing new networks) out of the size of your investments?

The networks sector needs investments on an ongoing basis, whether to maintain and develop existing networks or to create new expansions. This is estimated to be around EGP 2.5bn annually.

Has Etisalat negotiated with the Central Bank of Egypt (CBE) to expand funds transfer services?

We are continually working closely with the CBE through the National Bank of Egypt, in order to expand cooperation and allow transferring funds from outside the country to Etisalat’s customers locally. We also seek to recognise the controls that organise these processes, in order to achieve better customer service.

What are the new services the company is considering offering in the local market?

We are waiting for the launch of 4G, which will enable us to serve our customers better and introduce new services that can keep up with the rapid developments in the field.

How was the company affected by the rules introduced by the National Regulatory Authority (NTRA) for selling lines?

We are committed to the NTRA’s regulations in the Egyptian market, and the market was generally affected without a doubt. We were the fastest to take proactive steps that enabled ​​us to have the most widespread network of retails stores all over the country. The number of our branches and outlets has increased, reaching more than 1,100 branches and outlets in 26 governorates, which created 3,000 job opportunities. These branches sell the company’s lines according to procedures set by the NTRA.

How will you improve the quality of your services locally?

We pay great attention to the level of services provided to our customers in terms of both data and voice services. We have made ​​significant investments in this area in order to improve the service level. Sometimes we face some problems in obtaining permits and licences to expand our network coverage, and the frequency problems still exist. We hope to resolve these matters as quickly as possible to be able to serve our customers the way we wish.

What is the value of new Etisalat Egypt investments in 2016?

There are plans to reach investments worth EGP 5bn per year in order to keep up with the constant evolution of technology and the need to expand and develop networks, especially with our expectations of launching of the 4G services.

Is the company’s fixed-Internet activity achieving profits? If not, then what are the solutions Etisalat is considering to make the activity profitable?

Fixed internet mainly depends on the infrastructure that the company is renting from TE.  Currently, we are negotiating with TE in order to reach a reasonable price for renting the infrastructure, which will have a positive impact on the prices offered to customers.

Has Etisalat offered solutions to limit the effects of voice-call application on the Internet?

Solutions to face any problem in the sector fall under the responsibility of the NTRA, not ours. But we can offer suggestions to deal with these applications, especially since we are present in 19 markets around the world, with some of them keeping up with these applications.  We believe in the professionalism of the NTRA in learning from global experiences in dealing with this phenomenon, which must be dealt with properly.

What do you think about the reductions in rental prices of TE’s infrastructure?

The lowering of prices by TE is definitely a positive step. But these reductions do not benefit all Internet companies. For example, companies that rely on large capacities (STM4 and STM16) will benefit more, compared to companies that rely on smaller capacities. We hope that TE reconsiders reducing the prices of the rest of the capacities so all companies can provide users with offers of lower prices.

What do you think of the decision to retreat from the establishment of a national entity for the infrastructure?

This mainly depends on the suggested alternative for the entity and how much it can provide infrastructure services in better ways and more competitive prices that help companies offer improved services to users.

Do you expect the 4G technology to be launched next year, as promised by the Communications Minister?

We trust in the ministry’s ability to implement its commitments. And we hope to launch the 4G frequencies soon. We are ready to offer 4G services immediately.

What are the developments of the negotiations to obtain extra frequencies to accommodate the increased usage of the network?

Until now, we have not obtained all the frequencies we requested. We are waiting for a solution to this matter as soon as possible, in order to enhance our ability to serve our customers better.


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