By Sherin Abdel-Razek The swings witnessed during the week ending 15 March resulted in the market's main index CASE30 concluding 1.2 points higher than the previous week. Ending in the black meant that the market was able to defy the overall downward trend seen in international and some regional bourses throughout the week, in an obvious indicator of the weak correlation between the local and international capital markets. MOBINIL, Egypt's first and largest mobile network operator, is having a hard time with the National Telecommunications Regulatory Authority (NTRA) with the latter issuing three decisions against it last week. The first prohibits MobiNil from continuing its "unlimited validity" offer that allows prepaid subscribers not to recharge their phone cards, as long as they make one telephone call every three months. NTRA said the offer which MobiNil started in mid-February changes the tariffs it has approved for prepaid customers. Moreover, NTRA refused to provide MobiNil with new numbers citing MobiNil's low quality service. The NTRA also terminated the interconnection contract that MobiNil and Vodafone Egypt signed with one another in January, 2005, for charging calls and minutes from one network to the other. The NTRA instead will set a fixed fee. As for the dispute over giving MobiNil the green light to resume offering services using Enhanced Data for GSM Evolution (EDGE) technology, the NTRA stressed that this will not happen unless MobiNil paid the 3G license fee, to the tune of LE3.4 billion. On another front, MobiNil will takeout a LE1.8 billion loan from the National Bank of Egypt and Banque Misr next month to finance an upgrade and renovation of the company's network. TELECOM EGYPT (TE), Egypt' sole fixed line operator, released its results for the year ending December, 2006, showing a four per cent increase in its subscribers, bringing them to 10.8 million. Its net profits increased by almost 16 per cent, to an estimated LE2.4 billion. The growth in income resulted from a 20 per cent increase in tariffs on the first minute of local calls which the company introduced in April. Moreover, TE's bottom line benefited from an increase in investment income resulting from its 44.7 per cent stake in Vodafone Egypt (VFE). The investment income reached LE609 million, up from LE385 million in 2005. These factors offset the LE123.7 million forex losses the company shouldered in 2006, compared to a forex gain of LE332.2 million in the previous year. In an unexpected move, TE said it might pull out of the Algerian market because of regulatory problems and unfair competition with state-owned Algérie Télécom. TE owns 50 per cent of LACOM, Algeria's second fixed line operator, in a joint venture with Orascom Telecom, and has already decided to stop injecting new investments in LACOM until technical and regulatory problems are resolved. TE will soon lose its monopoly over the international voice market since Egypt's National Telecommunications Regulatory Authority (NTRA) will issue international gateway licenses within four to five weeks to any of Egypt's three local mobile phone operators, providing they own an Internet service provider (ISP) subsidiary in Egypt. Of the three competing mobile operators, only Etisalat Egypt does not yet have one; MobiNil owns LinkDotNet and Vodafone Egypt (VFE) owns Raya Telecom. ORASCOM TELECOM HOLDING (OTH)'s bid to acquire Saudi Arabia's third mobile license was disqualified after technical evaluation. The news came as a surprise since OTH is considered the largest mobile operator in the Middle East, and is ranked eighth worldwide. Industry officials attribute the decision to the fact that OTH owns a 19 per cent stake of Hutchison Isaar which has operations in Israel, a theory that is strengthened by the fact that another company dismissed from the Saudi shortlist has investments in Israel as well. Saudi Arabia's telecommunication regulator, the Communications and Information Technology Commission (CITC), qualified seven consortiums after concluding technical evaluations. CITC will open bidding for the seven on 24 March. The value of the financial bid is expected to exceed the $3.25 billion paid by the UAE-based Etisalat to buy the first Saudi mobile operator Mobily. AL-ARAFA INVESTMENT AND CONSULTING, the apparel and cloth manufacturer, revealed a plan to establish two projects in Beni Sueif in Upper Egypt, with overall investments amounting to $30 million. Moreover, it is considering establishing joint ventures, possibly with Canadian, Italian and German companies, which will be financed from the proceeds of its recent IPO. AL-WATANY BANK (AWB) is the centre of interest for a number of regional banks who want to buy a majority stake in it, but are waiting for permission from the Central Bank of Egypt (CBE) to begin performing the due diligence. CBE's board will begin studying the offers within days. While Qatar Islamic Bank sent a statement to the Doha Securities market denying reports that it is among the parties interested in buying the bank, the list of interested buyers still includes other heavyweights such as Banque Saudi Fransi, the National Bank of Kuwait and Lebanon's Banque Audi. AWB's net profits in 2006 rose by 59 per cent to LE95 million; in early 2006, AWB raised its paid-in capital to LE750 million from LE500 million.
