Falling revenues push operator toward value-added services
The political events and economic certainty have impacted the Egyptian Company for Mobile Services (Mobinil). The mobile operator announced its first-quarter results with net profits declining by 93.6 per cent since the same period in 2010, £E22.7m ($3.82m). Revenues were down 4.5 per cent to £E2.43bn since the same period in 2010.
“The first quarter of 2011 was unusual for Mobinil and the whole country … We anticipate that the after-effects of the political turmoil and economic slowdown is likely to continue throughout 2011, but the impact on our business will lessen as consumers gain more confidence,” says Hassan Kabbani, Mobinil’s chief executive officer.
Mubarak’s decision to shut down mobile services for a full day on 28 January resulted in an 8 per cent year-on-year fall in mobile revenues to £E2.3bn.
“Revenue from roaming has been hit the hardest, as it has been affected by the fall in tourism,” says Alex Shalaby, Mobinil’s chairman. Roaming revenues make up 10 per cent of total revenues for the operator.
Internet revenues also fell by 3.9 per cent after internet connections were switched off for five days. Mobile subscribers only grew 16.2 per cent year-on-year to reach 30.35 million.
“Egypt is a poor country with a large population and since penetration is reaching saturation, you cannot count on the double-digit growth of yesteryear,” says Shalaby.
The operator plans to overcome slow growth through new services, such as mobile-banking (m-banking), which it plans to launch in the first half of 2011.
Mobinil has partnered with several banks and financial institutions across the country to provide banking services on the mobile platform.
“This has been an ongoing issue for three years and the recent events in Egypt have not helped, but as the governor of the Central Bank has remained the same, we plan to launch the service very soon,” says Shalaby.
M-banking is a type of value-added service (VAS) currently being pursued by operators in the region as a means to deal with falling average revenue per user (ARPUs) and saturating levels of mobile penetration.
The biggest setback to the introduction of the service in Egypt has been regulatory issues between the Central Bank and the National Telecommunications Regulatory Authority (NTRA). These appear to have been resolved, paving the way for Mobinil and Vodafone Egypt to launch their services.
Customers will be able to conduct all banking services on their mobile telephones. Egypt’s mobile penetration rate is currently 90 per cent.
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