CAIRO: Egyptian mobile operator Mobinil expects revenue growth to slow to 5 percent in 2010 and to boost its subscribers to 28 million by the end of the year, its chief financial officer said on Thursday. Mobinil, which leads Egypt s competitive mobile market by number of subscribers, said on Wednesday it had 25.35 million customers at the end of December. By comparison, Vodafone s Egyptian unit added 1.26 million subscribers in the same period to reach 23.33 million, the London-based company said earlier this month. The likely drop in revenue growth, a result of aggressive pricing promotions, will push Mobinil s EBITDA margin percentage down to a range in the low to mid-40s, Khalid Ellaicy told a conference call with analysts and journalists. He also said the firm s tangible capital expenditure for the year was expected to be between LE 2.5 billion and LE 3 billion ($455-547 million). The full-year EBITDA margin in 2009 was 47.4 percent and capex was LE 2.6 billion. Ellaicy saw no end to the price war with Vodafone Egypt and Etisalat Egypt that peaked in the third quarter with offers to coincide with the Muslim holy month of Ramadan. I do believe there will be more competitiveness, more aggressiveness (in) post-paid and pre-paid, he said. What we hope is that the other players will have common sense to see that severe price reductions will only hurt the business long-term, he said. Nomura cut its price target on shares of Mobinil to LE 222 from LE 235, citing tougher competition for the Egyptian mobile operator and its weak outlook for 2010. The brokerage said the company s 2010 outlook implied a fall in earnings before interest tax, depreciation and amortization (EBITDA) due to low growth and margin pressure and added that earnings per share could fall significantly more. Interconnection changes are not working in Mobinil s favor, and are partly responsible for the increased margin pressure, in our view, analyst Martin Mabbutt said in a note to clients. On Wednesday, the company, which leads Egypt s competitive mobile market, posted a forecast-beating quarterly net profit of LE 581 million, up 5.4 percent from the year-ago period. The analyst, who has a neutral rating on the stock, did not see any let-up in either regulatory or competitive pressure for the operator in 2010.
