Vodafone Egypt seeks to invest about €250m in Egypt over the next year, the company’s CEO Alexandre Froment-Curtil, said, adding that his company has already invested about EGP 45bn over last 20 years in the country.
“Egypt’s 2030 Vision is going digital. There is a worldwide race and rush in the digitalisation, Egypt cannot be left behind,” he noted, pointing out that Vodafone Egypt’s role focuses on enabling the digitalisation of Egypt.
“We are looking at all the possible solutions in infrastructure, investments, and IT solutions to support the country’s digitalisation plans,” he declared.
Daily News Egypt interviewed Froment-Curtil to learn more about the company’s activities and future plans in various aspects including investments, revenues, corporate social responsibility (CSR) projects, as well as a comprehensive view of the Egyptian economy updates and its impact on the communication and information technology communication and information technology (CIT) industry, the transcript for which is below, lightly edited for clarity:
Initially, how do you assess Egypt’s investment climate in general and telecommunications sector in particular?
We are very confident about the macroeconomic dynamics of Egypt including the country’s overall state such as GDP growth, population, and the very strong economic reforms that have been undertaken in the last three or four years. We view those reforms as tough reforms but now there are very positive economic outlooks for the country. The reforms promoted the business confidence in the market. As Vodafone Egypt, we invested about EGP 45bn over the last 20 years in the country, and for our annual investment next year we will invest about €250m in the country- and this is not a small sum-which reveals that we are confident about the overall climate in our sector.
One of Egypt’s business tycoons criticised investments in the CIT sector saying that it is unprofitable, how do you see the sector’s profitability?
As a group, we have been here for the last 20 years, and we’re here to stay.
What about your plans to provide 5G services?
Worldwide, we have been making a lot of first 5G activities, such as in the research and development (R&D) aspect. Recently we launched the first 5G call between two 5G phones in Barcelona. We have a lot of innovations in 5G services in the UK, Italy, so we are really keen on the 5G R&D activities. For Egypt, it is still too early, as it requires both the technology and infrastructure and all of these things aren’t yet on Egypt’s agenda. Fundamentally we have launched 4G since 2016, so we need more time to spread 4G to everybody. Until everybody has 4G in their hands-and I mean the whole population not only in Cairo-we shouldn’t be worrying too much about 5G.
I know that Vodafone requested additional frequencies from National Telecom Regulatory Authority (NTRA) for 4G, what are the updates?
Yes, we already requested, because we see a significant demand. As soon as our customers switch to 4G, they will really get heavily engaged in the internet about knowledge, access to opportunities on that basis, and we need to be able to cope with the massive demand that is happening on the data infrastructure. Additional frequencies will allow us to cope that demand.
When is the NTRA expected to approve your request?
We can’t expect a date because it’s the NTRA’s decision. We will wait and see.
How much are the revenues of Vodafone in fiscal year (FY) 2018/19 which ends in March?
We will reveal the results of the financial performance by mid-June, yet we can’t announce our plans for the next FY now.
How did the reforms and the Egyptian pound flotation reflect on your activities?
Actually, we were affected by many elements including the value added taxation (VAT), the Egyptian pound devaluation, then we were affected by inflation and people salaries and energy prices–these were big challenges in many different ways but we deal with it, and as long as we believe that these reforms are for the good of the country, we will keep in dealing with it.
So, have you recovered from those challenges?
Not yet, but we are dealing with the situation. We see a positive impact on the country’s economic performance including the GDP positive growth. We also see the enthusiasm of the small and medium-sized enterprises (SMEs) as well as the increase of the entrepreneurship sector.
How do you assess cooperation with Telecom Egypt?
Telecom Egypt is our supplier and they are also our shareholder. Sometimes they are a customer, and in a very specific part of the business, they are competitors. So it is a very challenging relationship because it is multifaceted relationship. I would like to confirm that it is not negative at all. The agreement we have signed recently in February with them is a significant milestone of the quality of our relationship. Earlier in February, Egypt Telecom and Vodafone Egypt signed an agreement in the field of messaging, infrastructure, and distribution of profits in the presence of the Minister of Communications Amr Talaat. Talaat elaborated that the first agreement is about the distribution of profits of Telecom Egypt at Vodafone, which amounts to EGP 5.5bn. The profits will be disbursed by EGP 4.8bn in March 2019 and EGP 700m in June 2020, according to a past statement of the ministry. We have fulfilled our shareholder duties to release evidence to our shareholders and vice versa. Telecom Egypt has shown a great vision in the way they are supplying us with the fixed infrastructure which is a long-term agreement.
How do you see the competition climate with other operating companies in Egypt?
Egypt’s telecommunication industry is very competitive. That is something which is very health. The more competition there is, the more we will innovate new services, promotions, growth opportunities, with very positive industry dynamics.
What about the company’s CSR activities? And what are the plans in this regard in terms of projects numbers and funds?
We launched the Vodafone Egypt Foundation, which is an non-governmental organisation (NGO), 15 years ago. It is the only telecom NGO in the country, and over the years, we have invested more than EGP 450m. Historically, there were many proud times of the foundation. One topic was an illiteracy programme where we taught reading and writing to over 400,000 women, mainly, in Upper Egypt. It had a significant impact. We have other activities with our partners to improve 100 schools in three governorates in Sohag, Fayoum and Luxor. OVER 60,000 children benefited from improving the infrastructure of the schools, and we encourage other NGOs to come up with programmes to improve curriculum activities including the theatre, music, sports, and others. We help the managers of schools to engage with the community. We deeply believe that schools are successful when the whole community helps schools. Education has been the heart of what we do at the Vodafone Egypt Foundation. Additionally, sustaining 100 schools is a big undertaking, you can’t go to a school, paint the wall and leave it. We are sustaining the efforts we have made and the investments we are injecting. So we will focus on that and for future CSR projects, we will wait and see.
What about Vodafone’ strategy for the next five years?
The way to look at Egypt is that the country has to digitalise swiftly. The country’s 2030 Vision is going digital. There is a worldwide race and rush in the digitalisation, Egypt can’t be left behind. We see that our role is enabling the digitalisation of Egypt is our strategy. We are looking at all the possible solutions in infrastructure, investments, and IT solutions.