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Telecom Egypt has no plans to sell Vodafone stake in medium term: source - Daily News Egypt

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Telecom Egypt has no plans to sell Vodafone stake in medium term: source

Company could consider selling their stake if it reaches “critical mass”

Telecom Egypt (TE) has no plans to sell off its 45% stake in Vodafone Egypt this year, a company official told Daily News Egypt.

We don’t have any intention to exit from Vodafone in the medium term,” the source explained.

TE would only sell their stake in Vodafone Egypt if it reaches a “critical mass” in the mobile operator market, the source added.

The company’s decision whether to hold onto its 45% stake in Vodafone Egypt cannot cause any conflict of interest, the source noted, adding that TE is not aware of Vodafone Egypt’s plans during board meetings.

TE is working on reinforcing their customer base of the mobile market to reach 15% by 2022 from only 2% now.”

Beltone Financial expected in a January research note that TE to offload its stakes “after securing solid ground in the mobile market” of over 7% this year.

The investment bank said that divesting from Vodafone Egypt will prevent it from duplicating its investments in the mobile sector, increase its liquidity, and improve dividend payouts to shareholders.

TE said earlier that its consolidated profits rose slightly during the first nine months of 2018 as compared with the same period last year.

The telecom company recorded a net profit of EGP 3.51bn in the nine-month period ended September, versus EGP 3.48bn in the prior-year period, according to a filing to the Egyptian Exchange (EGX).

Revenue surged to EGP 17.35bn at the end of September from EGP 13.12bn in the year-ago period.

At the level of standalone business, the state-owned landline monopoly’s logged an EGP 2.04bn in profits, up from EGP 1.6bn in the January-September period of 2017.

TE previously posted a 4% year-over-year growth in consolidated profits for the second quarter of 2018, recording EGP 1.28bn, compared with EGP 1.23bn for Q2 of 2017.

In the first half of 2018, the company’s net profit fell by 18.2% to EGP 2.06bn, from EGP 2.52bn in H1 of 2017.

The company has recently signed a memorandum of understanding (MoU) worth up to $400m with the pan-African telecom group Liquid Telecom.

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