Egypt May Put Off Fourth Mobile License - Bloomberg

Egypt May Put Off Fourth Mobile License - Bloomberg


Egypt’s government may put off a fourth mobile-phone license following the ousting of the former regime, potentially prompting Telecom Egypt to consider a new bid for the rest of Vodafone Group Plc (VOD)’s local unit.

“There are a lot of changes in Egypt now and we are not sure whether launching a new license at this moment is the right decision from the economic point of view,” Communications Minister Magued Osman said yesterday in a phone interview.

Telecom Egypt, the fixed-line monopoly that owns 45 percent of Vodafone’s local unit, has said it wants to offer mobile- phone services and is prepared to acquire an existing operator if it can’t gain a wireless license. Vodafone, the world’s largest mobile-phone company, ended talks last June to sell the business after Telecom Egypt (ETEL) initiated negotiations.

“They were looking to sell previously,” said James Crawshaw, an analyst at Standard & Poor’s Equity Research. “It could be another boost for the shares if they can sell it for a good valuation,” he said, adding that Vodafone is focusing on selling its stake in Polish operator Polkomtel SA.

Vodafone has risen 31 percent in the last 12 months, compared with a 15 percent gain in the U.K.’s FTSE 100 benchmark index. Sanford C Bernstein’s Robin Bienenstock last year valued the company’s holding in Vodafone Egypt Telecommunications Co. at about 3 billion pounds ($4.8 billion).

Vodafone spokesman Simon Gordon declined to comment. Spokesmen for Telecom Egypt couldn’t immediately be reached.

‘All Options’

Egypt’s Telecommunications Regulatory Authority is studying the possibility of offering a fourth mobile-phone license, Al Ahram reported in April last year, citing Amr Badawi, executive president of the agency. The study will evaluate the impact of the proposed license on competitiveness in the Egyptian market, the newspaper said at the time.

The ministry is working with Telecom Egypt and the country’s three mobile-phone operators -- Vodafone, Mobinil and Etisalat -- and is considering “all options,” Osman said yesterday.

During the protests, which ended the three-decade rule of President Hosni Mubarak, Egyptian authorities cut Internet access and mobile-phone service and instructed operators to send out text messages on its behalf.
“This was a decision that has negatively reflected on all citizens in Egypt,” Osman said. The ministry is currently revising the law to make clear who is responsible for such a decision and aims to publish its draft within three weeks.

Emergency Powers

Vodafone in February said that the authorities can instruct the operators to send messages under emergency powers provisions and that the messages were not written by the company.

“We would like to be more specific in terms of identifying who should be in charge to take that decision if needed,” Osman said, adding that he’d prefer the president or prime minister to be responsible if the government needed to take over mobile services again.

Mubarak resigned on Feb. 11 after 18 days of mass rallies, handing power to the military, which suspended the constitution and announced plans to hold parliamentary and presidential elections this year. Egypt’s ruling military council said in March that it will continue to run the country’s affairs until there’s a new president.
Telecom Egypt, whose Chief Executive Officer Tarek Tantawy resigned last month, is seeking to offer mobile services in a country where about 95 percent of Egyptians are clients of a mobile-phone network. The local government owns a majority stake in the company.

Minority Asset Sales

Vodafone CEO Vittorio Colao has said that the company is focused on sub-Saharan Africa. When the company halted talks about the Egyptian unit last year, analysts said Vodafone didn’t have much negotiating power as there was only one bidder. 

Colao, who took charge in 2008, has sold minority assets to unwind some of the takeovers by his predecessors. Arun Sarin pushed Vodafone into markets such as Ghana and Turkey. Christopher Gent led Vodafone through a six-year $300 billion acquisition spree. 

Vodafone sold stakes in China Mobile, reduced interests in Japan’s Softbank Corp. and in April agreed to sell a 44 percent stake in French operator SFR for 7.95 billion euros to Vivendi SA. The sale brought the total value of Vodafone’s disposals to about $22.8 billion since September. 

To contact the reporter on this story: Jonathan Browning in London jbrowning9@bloomberg.net.
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

Saudi Gazette - Managed services key to raise profit margins

Saudi Gazette - Managed services key to raise profit margins

JEDDAH: Managed services, such as network maintenance outsourcing for telecom operators, is a key element to improve profit margins as the sector continues to experience growth across the region, Mobiserve Holding, the leading solutions provider for technical and telecommunications infrastructure services and engineering in the region, said.

Sameh Atalla, CEO of Mobiserve, said as telecom operators seek to expand into new markets within the region and roll out new services, operators should look to outsource non-core business operations to outside organizations.

By outsourcing non-core functions such as network maintenance, telecom operators realize cost savings and operational efficiencies, enabling them to focus on core business operations, he noted.

Moreover, managed services can also benefit operators by allowing them to deploy new technologies such as 4G, and Long Term Evolution networks more rapidly as well as increasing customer satisfaction by providing end users with better integrated services. Already, with the rapid regional evolution in the telecom sector, several operators are starting to employ maintenance outsourcing services in order to maintain their competitive advantage.

“As we’re seeing increasing competition in several markets across the region as well the rollout of new services such as 4G, operators are increasingly seeking ways to improve operational efficiency and ultimately financial performance,” Atalla said.

“By outsourcing non-core services to specialized companies, operators benefit from skilled expertise and professionals without incurring additional costs,” he added.

“Mobiserve’s main priority is to provide the highest quality from our full suite of managed services in order for telecom operators to optimize efficiencies and savings. As a result, Mobiserve’s managed services and business outsourcing has enabled telecom operators to achieve cost breakthroughs throughout their entire value chain,” Atalla said.

For over a decade, the Cairo-based holding company has been providing operators with world-class telecom infrastructure solutions and services. It is the infrastructure and rollout partner of choice for several of the region’s foremost operators including du in the UAE, Zain in Saudi Arabia, Mobinil, Etisalat and Vodafone in Egypt, Djezzy and Nedjma in Algeria, Mobilink and Uphone in Pakistan, and Banglalink, Aktel and Grameenphone in Bangladesh.

It operates from 9 offices throughout the Middle East, Africa, and South Asia providing timely on the ground expertise to operators.

Mobiserve Holding’s broad range of services encompass turnkey communications solutions for next generation telecom networks, satellite services, the manufacturing of telecoms towers and shelters, as well as infrastructure deployment, operations and management. To date, Mobiserve has deployed over 8,500 sites throughout three continents.

– Saudi Gazette

Vodafone to increase outsourcing to Egypt

Vodafone to increase outsourcing to Egypt

Vodafone CEO Vittorio Colao has met with Egypt's Minister of Communications and Information Technology (MCIT), Tarek Kamel, on increasing the company's investments in Egypt, the ministry announced. Vodafone International Services signed three cooperation agreements with the Information Technology Industry Development Agency (ITIDA) on offshoring customer and ICT services to Egypt. The ITIDA will provide investment incentives for Vodafone to increase its outsourcing to Egypt. Vodafone is expected to double staff at its Egyptian customer centre serving clients in the UK, Germany, New Zealand and Qatar. The company will also add 230 new specialists at its ICT centre which provides hosting, software development and other ICT services for Vodafone in Germany and other areas of the world. Vodafone will also set up a new R&D centre in Egypt with 100 staff working for Vodafone Global Enterprise.

Egypt could become the top outsourcing destination worldwide, says expert

Egypt could become the top outsourcing destination worldwide, says expert

By Christopher Le Coq /Daily News Egypt

CAIRO: Worldwide demand for outsourcing is tilting towards Egypt as Europe now spends more on outsourcing than North America. According to Denise D’Elia, a Vodafone representative, outsourcing as an industry was valued at $13 billion last year.

Egypt has the third-largest talent pool in the EMEA region. This is largely due to the country's rich pool of young talent — 50 percent of the population is under 25.

Although this is a positive development, for Egypt to play a major outsourcing role worldwide, it needs to build its capacity in several areas, D’Elia said.

Moreover, a provider must ensure that it is a reliable supplier and provides certification. Reducing “churn” — an industry term for lowering the rate of customer loss — is also critical.

D’Elia also highlighted the importance of education, which in Egypt is an area with promise. Indeed, the representative indicated that Egypt pumps out 330,000 university graduates per year — the third largest in the region — which will provide a steady flow of job seekers to the sector.

She noted that firms such as Vodafone, which have substantial outsourcing operations in the country, seek young graduates with specializations in engineering, commerce, and industry.

As it so happens, Egypt currently has a significant number of students whose studies focus on these three areas.

Furthermore, as an outsourcing center for Europe, D’Elia emphasized the importance for Egypt to maintain the population’s strong European language skills.

She said that it is the only country in the world that boasts an aptitude in various European languages — including some less widely-known languages, such as Polish — which thereby give Egypt a competitive edge.
A key area that must remain a focus is controlling cost, she said. According to D’Elia, firms are looking for increased revenue per customer, and this is an area where off-shoring can play a role.

However, in terms of cost, Egypt performs well in relation to other outsourcing destinations; Egypt even performs well in comparison to India and the Philippines, which are currently the two top choices for outsourcing worldwide.

D’Elia stated that cost in Egypt is competitive from both a personnel and non-personnel perspective (which includes infrastructure), according to data gathered by ITIDA and various consultancy firms.
She highlighted the efforts taken by the government to drive the sector, noting reforms in the areas of taxation and customs simplification. In addition, the financial sector has gradually become more privatized, and legislative and institutional frameworks fostered through “one-stop shops” have been established. Many of these legislative and institutional frameworks have even been implemented within 72 hours, which is quite faster than in previous years.

In terms of infrastructure, strides have also been made.

Smart Village was initially established to serve as a concentration of businesses specializing in information technology, yet due to its strong success it quickly became a headquarters for a variety of multi-national corporations.

Following its example, the new IT Maadi Park will be ready for operation in 2012. It is slated to house approximately 300,000 employees in over 40 buildings.

Last year, Egypt was ranked 13th in the field of global service delivery, according to an AT Kearny survey. Thanks to governmental efforts and the positive market dynamics already inherent to Egypt, the country was ranked sixth this year.

“Many countries would like to be in that position,” D’Elia said.