Business

Unrest looks set to lift profit at Telecom Egypt

What's Up: Telecom Egypt is emerging as the main beneficiary of the social media revolution that gripped Egypt and eventually ousted Hosni Mubarak.

Farah Halime

June 30, 2011

  • English
  • Arabic

Telecom Egypt is emerging as one of the top beneficiaries of what has been called the "Facebook revolution".

The company, which has the landline monopoly in the country, is a clear winner from the prominence of the internet in a popular uprising that eventually ousted Hosni Mubarak from the presidency on February 11.

Credit Suisse upgraded the company yesterday to "outperform" from "neutral" to reflect expectations of strong revenue for the year as a result of the sharp increase in internet use in Egypt after the country's unrest.

In a note to investors, the brokerage said Telecom Egypt's shares were cheap at current levels and represented a defensive investment in a volatile Egyptian market.

But to reflect higher market risks after the protests, Credit Suisse cut its price target on the stock to 16.5 Egyptian pounds from 17 pounds.

The country's telecoms companies, including Vodafone Egypt, which is 45 per cent owned by Telecom Egypt, were forced to cut their service at the height of the protests in February in a government attempt to stifle the unrest.

This hurt Telecom Egypt's shares in the short term, but some analysts said the subsequent surge in internet use would prop up the company's revenue in the months to come.

Egypt's internet penetration rate stood at 24.5 per cent in March, according to research from Prime Securities in Cairo, versus the Middle East's average penetration rate of 31.4 per cent.

Telecom Egypt will be a "major beneficiary from the revolution with increased access to internet stimulated", analysts at Prime Securities wrote in their note to investors.

The stock closed 1.3 per cent lower at 14.68 pounds yesterday on the Egyptian Exchange.

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Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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Australia 92 (3) beat New Zealand 54 (1)

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Ten tax points to be aware of in 2026

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If a business does not apply for the refund on time, they lose their credit.

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Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

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There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

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7. Limited time periods for audits

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Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Who are the Sacklers?

The Sackler family is a transatlantic dynasty that owns Purdue Pharma, which manufactures and markets OxyContin, one of the drugs at the centre of America's opioids crisis. The family is well known for their generous philanthropy towards the world's top cultural institutions, including Guggenheim Museum, the National Portrait Gallery, Tate in Britain, Yale University and the Serpentine Gallery, to name a few. Two branches of the family control Purdue Pharma.

Isaac Sackler and Sophie Greenberg were Jewish immigrants who arrived in New York before the First World War. They had three sons. The first, Arthur, died before OxyContin was invented. The second, Mortimer, who died aged 93 in 2010, was a former chief executive of Purdue Pharma. The third, Raymond, died aged 97 in 2017 and was also a former chief executive of Purdue Pharma. 

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Members of the Sackler family are rarely seen in public.

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4 D Johnson (US)

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