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Vodafone Egypt to spend $1.25 billion on network upgrade
Vodafone Egypt plans to ramp up investment in Egypt over the next three years, pouring more than 30 percent of revenues into upgrading its network to keep pace with demand for data services, it’s CEO said.
Vodafone Egypt, majority owned by British mobile operator Vodafone, is the leading communications player by customer numbers in the country of 90 million.
Chief Executive Officer of Vodafone Egypt :Ahmed Essam told Reuters that annual investments will represent more than 30 percent of annual revenues.
Chief Executive Officer of Vodafone Egypt :Ahmed Essam:
"We've been investing for, throughout the years, and especially during the past three or four years where I think a lot of the, a lot of questions were asked, about how investment was going and so on, we've been investing heavily over the past three years, and we've actually announced this year, as part of what we call 'project spring' a capital intensive plan of heavy investments for the next three years. The plan, the capital in it is around 9 and a half billion Egyptian pounds. We've already spent nearly a third of it this year. So, it's not actually an announcement, it's actually going on the ground now, this is huge investment in comparison to what we used to spend," Essam said.
Financing the planned investments will come from internal resources, Essam added.
Egypt is finalizing the details of a long-awaited unified license which will allow firms to offer both mobile and landline telecommunications.
Essam said Vodafone Egypt is interested in getting the Internet service offered under the unified license and has its eyes set on the international telecommunication portal but has not decided yet if it needs the fixed line part of that license.
He seemed upbeat on the Egyptian economy, which has just started to recover from nearly four years of political upheaval, street protests and militant violence triggered by the 2011 uprising which toppled autocrat Hosni Mubarak.
"And I actually believe that we are, as a country on the front-foot at the moment for encouraging investments coming in and encouraging trade as well, which should have its implications, on all the business in Egypt, and the consumers as well. And from that belief I think, we've put the extra investment plan that we have started already this year. This is a belief in the economy growth in general. When you look at the facts and the numbers, you can see that the GDP growth quarter over quarter, is starting to tick. Yes, the majority is coming from public spend, but still I think it starts from there and then the normal investment, the other investment should follow," he said.
"The other aspect is I think the Egyptian population and the Egyptian market in general is very cash-rich. And I think it's proven when you look to some of the very positive projects, like the Suez Canal, where you could see that over a week, a period of a week, that there was billions of pounds, who came to fund to the project. So the demand is there, I think the cash is there and the confidence, which I think is the most important thing, is starting to be there at the moment, and it's reflecting on the GDP," he added.
Egypt can expect economic growth "easily north of 4 percent" in fiscal year 2014-15, which ends in June, boosted by rising confidence and a windfall from lower oil prices, its finance minister said in January.
Vodafone Egypt, which is also 45-percent owned by fixed-line telecoms firm Telecom Egypt, plans to spend around 9.5 billion Egyptian pounds worth $1.25 billion to improve its networks.
Investments would cover purchasing equipment, modernizing stations and creating new coverage areas in Egypt, the most populous Arab country.
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