Telecom Egypt (TE) and Vodafone Egypt announce the signing of two ten-year transmission and infrastructure agreements with a total value of EGP 10.85bn. The transmission agreement covers Vodafone Egypt’s current and future requirements for domestic transmission services for both fixed and mobile, and the infrastructure agreement represents a new cooperation between the two companies, where Telecom Egypt will avail fiber backhauling capacity to Vodafone Egypt’s network. Additionally, Vodafone Egypt has proposed a dividend of EGP12.2bn, of which Telecom Egypt’s share is the equivalent of EGP 5.5bn. The dividends will be paid on two tranches, the first of which amounts to EGP 4.8bn and will be paid in March 2019 with the remainder in June 2020.
Adel Hamed, Managing Director and Chief Executive Officer of Telecom Egypt, commented:
“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.”
Alexandre Froment-Curtil, Chief Executive Officer of Vodafone Egypt, said:
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 higher speed and quality fixed- line internet, as well as 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.”