Industry stalwarts in the Middle Eastern and North African Telecommunication markets are likely to see earnings weaken as smaller firms enter the market, the Qatari English daily Gulf Times reported Sunday. The Times reported that EFG Hermes, an Egyptian investment firm, expected a 3 percent decline in the Emerati firm Etisalat, Saudi Telecom Co, and Zain, each of which has holdings in North and Sub-Saharan Africa. EFG also expected Telecom Egypt's second quarter net profit to decline by a tenth on the year. Matthew Reed, an analyst at the Dubai based consultancy Informa Telecoms & Media, told the Times that markets should expect a decline in revenues for the second quarter due to rising competition. Many of the markets in the North African region are quickly approaching a full penetration rate: Algeria has a penetration rate of about 90 percent, and Morocco has already surpassed 100 percent. With a smaller and smaller untapped market, competition will move towards new services rather than gaining new subscribers. Reed also cited the political instability shaking the Arab World as a contributing factor. Telecom Egypt said the revolution cost the state-owned company $14.2 million. Mobinil, Egypt's largest mobile operator is “seen reporting a 54 percent” decline in profit. BM
