Telecom Egypt reports massive losses

Telecom Egypt reported financial losses

Egypt’s state-owned landline operator Telecom Egypt announced that it lost some 86 million Egyptian pounds as a result of network related damages that occured between January to May 2011.

Much of those losses, the company says were directly related to the 18 days of protests that took down the former government of Hosni Mubarak on 11 February 2011.

Telecom Egypt reports that the losses to fixed assets were 62.76 million Egyptian pounds, (USD $10,5m) or 0.45% of its total net fixed assets through March 2011.

The company says this includes 30 million Egyptian pounds (USD$ 5m) in damages, theft and fires and 32.78 million Egyptian pounds as a result of having to replace copper and fiber optic cables across their network.

In April and May 2011, the company’s cable losses totaled 22.81 million Egyptian pounds (USD $3,8m).

Despite the reported losses, telecom analysts in Egypt believe it will not affect the company’s future outlook, especially as Telecom Egypt looks to enter the mobile sector when the government offers a fourth mobile license.

According to technology analysts Beltone Financial, “It was still unclear how the losses would be accounted for on company income statements and whether they would be booked as a single entry at the end of 2011 or smoothed over different quarters of the year.”

Staff Writer