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2007 Annual Report
Over 15 Million Egyptians Communicate from the Heart
The Egyptian Company for Mobile Services (Mobinil)
Nile City Building 2005C, Cornishe El-Nil, Ramlet Boulaq Cairo, Egypt - Postal Code: 11221
www.mobinil.com
Med
ia T
erra
nia
Soliman Pacha Square
Table of Contents
2 Mobinil 2007 Annual Report
About Mobinil 8
Our Shareholders 10
ß ECMS Ownership Structure 10ß Orascom Telecom Holding S.A.E. 12ß FT-Orange Group S.A. 13
The ECMS Board of Directors 14
Corporate Governance 22
ß Corporate Governance Structure 22ß The Corporate Governance Department 23ß 2007 Highlights 23ß Corporate Governance Principles 23ß The Audit Committee 24ß The Compensation Committee 24ß 2008 Calendar 24
The Corporate Organization 26
ß The Management Team 28
Our Responsibility 32
ß Commitment to our Customers, Employees, 34Shareholders, Community and Suppliers
ß A Promise of Prosperity to Egypt 38
Market Close-up 44
ß The Egyptian Market 46ß Developing the Egyptian Market 50ß 2007 Overview 52
Market Leadership 56
ß Network Coverage 58ß 2007 Advertising Campaigns 60ß Customer Centers 66
Roadmap 68
Financial Statements and Analysis 70
ß From the CFO 72ß Auditors’ Report 73ß Audited Financial Statements 74ß Management Discussion & Analysis 93ß Financial Analysis 95
Glossary 102
From the ChairmanFrom the President and CEO
4
6
Mobinil 2007 Annual Report 3
Looking at Mobinil’s results in 2007, I am not only proud of the 15million subscribers milestone, but I am also truly proud to see Mobinilfulfill its promises while actively leading on growth and change inthe Egyptian mobile market.
This year has witnessed many firsts for Mobinil, marked consistentlyby innovative offerings and competitive services that wererepeatedly followed by competition. I am also proud to support Mobinil as it takes on serious investmentdecisions that will help realize its strategic plans and pave the waytowards a promising future for all Egyptians. Together, we willcontinue to be the leading mobile operator in Egypt with a sustainedvision to help customers achieve more in life with our simple, yetinnovative offerings through state-of-the-art technology, whichcaters to their evolving needs. Looking forward to a prosperous new year with more and moremilestones to celebrate.
Our Vision
To be part of people’s daily lives by pro-viding reliable and simple products andservices that help people interact andcommunicate better.
Mobinil 2007 Annual Report
Sincerely,Naguib Sawiris
From the Chairman
4
Mobinil 2007 Annual Report 5
2007 was definitely a remarkable year for Mobinil. I am pleased tosee Mobinil cross the 10 and 15 million subscriber milestones in oneyear with the highest level of net additions of almost 6 millionsubscribers; a figure that was beyond all market expectations.
We succeeded in maintaining our market leadership by offeringinnovative services and competitive offers tailored to meet theneeds of our subscribers. This success is due to our focused attentionon strategic goals to increase subscribers' loyalty by simplifyingtariffs, stimulating usage, and a determined effort to reinforce ourcustomer intimacy leadership.
This success is a result of a series of consecutive offers madethroughout the past two years and continued in 2007: LifetimeValidity, Alohat "version II", Ahsan Nas, mobile TV, unlimited calls,high-end handset offers, exclusive offer to the graduating high-school class of 2007 [Thanaweya Amma], new scratch cards, andthe holiday season "stop the clock promotion."
These offers resulted in increasing the full year average usage peruser [AUPU] to reach 132 minutes/month, representing an increaseof 11% over the same period last year.
Capital expenditure reached its peak at EGP 3,264 million duringthe year representing the highest level of investment in a singleyear since Mobinil's inception.
We have also started implementing an optimistic plan to modernizeour infrastructure on both Network and IT by transforming architecturefrom traditional legacy to NGN and IP core in addition to thedeployment of state-of-the-art charging platforms and 3G.
As Mobinil gets ready in 2008 to celebrate its tenth year as marketleader, I am looking forward to the exciting challenges lying aheadnext year and beyond. I am confident in our ability to continue tothrive as market leader in the Egyptian telecommunications marketand our exceptional talent in keeping customers at the heart of ouroperations, by tailoring technology that suits their changing needs.
I thank you for your continued support and trust.
Mobinil 2007 Annual Report
Our Mission Statement
To maintain our position as the leadingmobile service provider in Egypt, providingthe best quality service to our customers,the best working environment for ouremployees, top value for our shareholders,and proudly contributing to the develop-ment of our community.
Sincerely,Alex Shalaby
From the President and CEO
6
Mobinil 2007 Annual Report 7
Mobinil 2007 Annual Report8
Nile Feluccas
About Mobinil
Mobinil 2007 Annual Report 9
ECMS major shareholders, FT – Orange Group S.A. and Orascom TelecomHolding S.A.E, are both international telecommunication leaders.
Mobinil 2007 Annual Report
ECMS Ownership Structure
FT-Orange Group S.A71.25% of Mobinil
Telecommunications 36.3% of ECMS
Orascom Telecom Holding S.A.E28.75% of Mobinil Telecommunications
14.7% of ECMS
Orascom Telecom Holding S.A.E 20% of ECMS
Public Shareholders28.97% of ECMS
Mobinil Telecommunications 51.03% of ECMS
The Egyptian Company for Mobile Services (ECMS)
Our Shareholders
10
Mobinil 2007 Annual Report 11
12 Mobinil 2007 Annual Report
Orascom Telecom Holding S.A.E.
Orascom Telecom Holding S.A.E. (“OTH”or “Orascom Telecom”) is a leadinginternational telecommunicationscompany operating GSM networks in sixhigh growth markets in the Middle East,Africa and South Asia, having a totalpopulation under license of approx-imately 430 million with an averagemobile telephony penetration ofapproximately 40% as at December 31st2007. Orascom Telecom operates GSMnetworks in Algeria ("Djezzy"), Pakistan("Mobilink"), Egypt ("Mobinil"), Tunisia("Tunisiana"), Bangladesh ("Banglalink"),and Zimbabwe ("Telecel Zimbabwe").Orascom Telecom served a total of morethan 70 mill ion subscribers as ofDecember 2007.
Orascom Telecom’s operation inPakistan, Mobilink, originally started in1994, and until early 2001 it served around125 thousand subscribers. In April 2001,OTH took over management control ofthe company, and as at December 2007,Mobilink now served over 30 millionsubscribers, representing a market shareof approximately 40% competing against5 other mobile operators in Pakistan.
Orascom Telecom’s North Africansuccess continued in Algeria and Tunisiaas well. Djezzy; OTH’s network in Algeria,was granted a license in July 2001 tooperate a nationwide GSM network toprovide a range of mobile services inAlgeria. Djezzy’s network serves over 13million subscribers, as at December 2007,representing a market share of 62.4% oftotal mobile subscribers in Algeria. Djezzywas the second GSM telecom-munications network to operate inAlgeria and grew to become the marketleader in terms of both subscriber numberas well as the quality of telecom-munications services provided.
Orascom Telecom’s operation in Tunisia,Tunisiana was granted a license in May2002. Tunisiana exceeded 3.6 million
subscribers, representing a market shareof 47.7% of total mobile subscribers inTunisia, as at December 2007. Banglalinkwas added to OTH’s GSM family whenOrascom Telecom acquired 100% of theshares of Sheba Telecom in Bangladeshin September 2004. Orascom Telecomre-branded and launched its servicesunder "Banglalink" in February 2005.Immediately after the launch, OTHstarted its aggressive plans to developinto a major player in the mobile sector.Banglalink rapidly expanded its GSMnetwork to provide high quality com-munications services at affordable pricesreaching a market share of 20.6% of thetotal mobile subscribers in Bangladeshwith over 7 million subscribers as atDecember 2007.
OTH has positioned itself as a leader inthe region for its diverse GSM operationswith various GSM support and Internetoperations. One of Orascom Telecom’smain strategies is to create its own non-GSM subsidiaries to act as a support forits regional GSM operations. OTH hasachieved this by dedicating financial,technical, and management resourcesfor its subsidiaries. This includes networksupport and installation of GSM opera-tions, equipment procurement, handsetprocurement and distribution companies,Value Added Services and Internetoperations. OTH is dedicated to providingthe best quality services to its customers,value to shareholders, and a dynamicworking environment for its around 20,000employees. OTH established a strongpresence in the GSM Association (theworld's leading wireless industry repre-sentative body), only five years after itsinception. OTH's Chairman and CEO,Naguib Sawiris, was selected to join theGSM Association's CEO Board in 2002.
Orascom Telecom is traded on the Cairo& Alexandria Stock Exchange under thesymbol (ORTE.CA, ORAT EY), and on theLondon Stock Exchange its GDR is tradedunder the symbol (ORTEq.L, OTLD LI).
Orascom Telecom reachedapproximately 70 millionsubscribers as of December2007.
Mobinil 2007 Annual Report 13
orangeTM
FT - Orange Group S.A.
Orange is the key brand of FranceTelecom, one of the world's leadingtelecommunications operators.
France Telecom serves more than 170million customers in five continents asof December 31, 2007, of which two thirdsare Orange customers. The group hadconsolidated sales of ¤ 52.9 billion in 2007.As of December 31, 2007, the group had109.7 million mobile customers and 11.7million broadband internet (ADSL)customers.
The group's strategy is founded on a pio-neering model of an integrated operatoroffering its customers a new generationof telecommunications services. The NExTprogram (New Experience in Telecom-munications), launched in June 2005, willenable the group to pursue its transfor-mation as an integrated operator andmake France Telecom the benchmarkfor new telecommunications services inEurope.
In 2006, Orange became the group'ssingle brand for internet, television, andmobile services in the majority of coun-tries where the company operates, andOrange Business Services the name forservices offered to businesses worldwide.(France Telecom is the number threemobile operator and the number oneprovider of broadband Internet servicesin Europe and one of the world leadersin providing telecommunicationservices to multinational companies.)
In 2007, the group met or exceeded allof its operational and financial objectivesConsolidated revenues rose to ¤ 52.959billion at 31 December 2007, growth of2.8% on a comparable basis. Growthwas particularly strong in the fourthquarter of 2007 (+3.6% on a comparablebasis). In 2007, the group met or ex-ceeded all of its operational and
financial objectives.ß Gross Operating Margin (GOM) of
¤ 19.1 billion, up 3.4% on a comparablebasis.ß GOM rate (GOM/revenues) of 36.1%,
stabilized compared with 2006 (+0.2points).ß Organic cash flow of ¤ 7.8 billion,
above the objective of ¤ 7.5 billion.ß Capital expenditure (CAPEX) of ¤ 7.0
billion, wi th an investment rate (CAPEX/revenues) of 13.2%, in line withthe stated objective of about 13% ofrevenues.ß Group share of net income of ¤ 6.3
billion, compared with ¤ 4.1 billion in2006.ß On a comparable basis, after adjusting
for the main non-recurring items, it was¤ 4.6 billion in 2007, up from ¤ 3.7 billionin 2006.ß Net debt to GOM ratio of 1.99 and
net debt at year-end of ¤ 38.0 billion.The 2008 objective was therefore metone year early.ß A dividend of ¤1.30 per share for
2007 will be proposed to the AnnualGeneral Meeting of Shareholders ofMay 27, 2008 and payable in June 2008.
2008 objectivesß Organic cash flow of more than ¤ 7.8
billion based on:1- The stability of the GOM rate.2-Maintaining the investment rate
(CAPEX /revenues) at about 13% ofrevenues.
These objectives are set in the contextof moderate growth of the mainWestern European markets, continueddevelopment of new services, and thecontinuation of a favorable trend inmarkets with high growth potential.France Telecom (NYSE:FTE) is listed onEuronext Paris Eurolist market and onthe New York Stock Exchange.
As of December 31, 2007, thegroup had 109.7 millionmobile customers and 11.7million broadband Internet(ADSL) customers.
13
The ECMS Board of Directors
Naguib Sawiris I.N. (Alex) Shalaby Olaf Swantee
Claude BenmussaPierre Charreton David Hobley
Naguib Sawiris
Chairman, the Egyptian Company for Mobile Services(Mobinil)Chairman, Orascom Telecom Holding S.A.E.Representing Mobinil Telecommunications in the ECMSBoard of Directors
I.N. (Alex) Shalaby
President and Chief Executive Officer, the EgyptianCompany for Mobile Services (Mobinil)Representing Mobinil Telecommunications in the ECMSBoard of Directors
Olaf Swantee
Senior Executive Vice President, Personal CommunicationServices & UK/EME OperationsRepresenting Mobinil Telecommunications in the ECMSBoard of Directors
Pierre Charreton
Group General Counsel - France TelecomRepresenting Mobinil Telecommunications in the ECMSBoard of Directors
Claude Benmussa
Senior Advisor PricewaterhouseCoopers (PwC) – ParisRepresenting Mobinil Telecommunications in the ECMSBoard of Directors
David Hobley
Managing Director, Deutsche Bank AG, LondonRepresenting Mobinil Telecommunications in the ECMSBoard of Directors
14 Mobinil 2007 Annual Report
Bertrand du Boucher Onsi Sawiris Aldo Mareuse
Ahmed ElBardaiNadia Makram Ebeid Sheikh Fahd El Shobokshi
Bertrand du Boucher
International Chief Financial Officer, Orange Group S.A.Representing Mobinil Telecommunications in the ECMSBoard of Directors
Onsi Sawiris
Chairman, Orascom Group of Companies and HonoraryChairman in ECMS
Aldo Mareuse
Group Chief Financial Officer (CFO), Orascom TelecomHolding S.A.E.Representing Orascom Telecom Holding S.A.E. in the ECMSBoard of Directors
Nadia Makram Ebeid
Executive Director, Center for Environment and Develop-ment for the Arab Region and EuropeFormer Egyptian Minister of EnvironmentRepresenting Public Shareholders on the ECMS Board ofDirectors
Sheikh Fahd El Shobokshi
Chairman of Nile CityRepresenting Public Shareholders on the ECMS Board ofDirectors
Ahmed ElBardai
Chief Executive Officer - REEFY Company - the first and onlycommercial privately owned microfinance services companyRepresenting Public Shareholders on the ECMS Board ofDirectors
Mobinil 2007 Annual Report 15
In November 2005, Alex Shalaby stepped up from Chief Regu-latory Affairs Officer to become President and CEO of Mobinil.
Shalaby lived and worked in Washington DC from 1995 to1998 and was Director of Government Affairs at AT&T, oneof the world's largest telecommunications companies. Hewas part of the Law and Government Affairs teamresponsible for lobbying the different branches of the USgovernment for telecom reforms in the developing marketsof the Middle East, Africa, Central Asia, and Eastern Europe.
Shalaby was AT&T's Regional Director for International PublicAffairs in Egypt from 1993 to 1995, where he was the principalinterface with key agencies within governments in the regionon matters impacting AT&T operations.
He established first presence for AT&T in a number of countriesof the Middle East as well as in South Africa. It was during
these years that he served on the boards of the AmericanChamber of Commerce, as its president, (AmCham 1991 -1992), Seeds of Peace, and the bi-national Fulbright Com-mission, as his AT&T responsibilities shifted from local to regional,with particular focus on North Africa and the Levant.
Shalaby was Managing Director of AT&T, Egypt and GeneralManager for the Middle East and North Africa region until1993. He held a variety of technical and managerial positionsand was involved with AT&T start-ups in the Gulf (1977-1980).In 1977, he helped launch the first AT&T microwave projectin Saudi Arabia before moving on to Kuwait and the UAE.
Shalaby graduated with a Bachelor of Science degree inElectrical Engineering from Alexandria University's Facultyof Engineering (1966) and holds a Master of Science degreein Electrical Engineering and Computer Science from SanJose State University, California (1974).
Naguib Sawiris is Chairman of the Egyptian Company forMobile Services (Mobinil). He is also Chairman and ChiefExecutive Officer of Orascom Telecom Holding (OTH),Mobinil's shareholder, and one of the leading internationalplayers in telecommunications, GSM operations, Internetservices, satellite and related communication services.
As Chairman of OTH, Sawiris has led the growth of the com-pany in a dynamic pace, now operating GSM networks invarious countries in the Middle East, Africa, and the IndianSubcontinent, in addition to a number of Internet ServiceProviders and Satellite Service Providers serving approxi-mately 500 million people around the globe. In May 2005,Sawiris also aquired “Wind Telecommunications”, the third
largest mobile operator and second largest fixed lineoperator “Infostrada” in Italy.
Naguib Sawiris is a member of both the Board of Trusteesand the Board of Directors of the Arab Thought Foundation,a Board of Trustees’ member and Head of the FinancialCommittee of the French University in Cairo, a Board Memberof the Egyptian Counsel for Foreign Affairs, the ConsumerRights Protection Association and the Cancer Society ofEgypt. He holds a Bachelor of Science degree in MechanicalEngineering with a Master’s in Technical Administration fromthe Swiss Institute of Technology, ETH Switzerland and aDiploma from the German Evangelical School, Cairo, Egypt.
Naguib SawirisMobinil Telecommunications S.A.E.
I.N. (Alex) ShalabyMobinil Telecommunications S.A.E.
16 Mobinil 2007 Annual Report
Pierre Charreton joined France Telecom as Group GeneralCounsel in the beginning of 2005. He manages a team ofmore than 450 lawyers throughout 30 countries.
Charreton brought to the FT Group his experience as an In-house General Counsel Manager, skills that he had theopportunity to develop within two international groups,THALES and FRAMATOME (nowadays AREVA), of which hesuccessively was General Counsel.
During that time, Charreton was mainly involved in negotiatingmajor contracts all over the world and was Board Memberof different subsidiaries in the USA as well as in Europe.
He also practiced in a Paris law firm at FIDAL and in theUnited States at Fried, Frank, Harris, Shriver & Jacobson LLP,in their Washington - DC office (1984-1985).
Pierre Charreton is currently Honorary President of the FrenchIn-house Counsel Association (AFJE) which he presided from1992 until 1997. He is also Board Member of the NationalFederation of Business Law (FNDE).
Charreton is also a Guest Lecturer at the Montpellier LawSchool and at the EM-Lyon. He is an Orléans Law SchoolGraduate and has obtained the CPA (Paris).
Senior Executive Vice President, Personal CommunicationServices & UK/EME Operations*, Olaf Swantee is in chargeof France Telecom’s mobile businesses worldwide. Theseserve 100 million customers and include Orange-brandedoperations in 16 countries.
Swantee is a member of the Group Management Com-mittee, the Executive Board of the France Telecom Group.Before joining the company in August 2007, Swantee wasSenior VP at Hewlett-Packard, responsible for enterprise salesand software in Europe, the Middle East and Africa (EMEA).
Swantee has 17 years of international experience. Hebegan his career with Compaq in Germany as a ProductManager, joining the Digital Equipment Corporation as theMarketing Director of its European PC Division. From Hewlett-Packard’s acquisition of Compaq in 2002, Swantee movedup to management to be promoted to Senior VP TechnologySolutions Group Sales and Software for EMEA in 2005.
Swantee holds a Bachelor of Arts in Economics and receivedhis European MBA from the Ecole Européenne des Affairesin Paris in 1989.
* The Europe & Middle East region includes France Telecom operations, Belgium,Moldova, Romania, Slovakia, Switzerland, Egypt, and the Dominican Republic.
Olaf SwanteeMobinil Telecommunications S.A.E.
Pierre CharretonMobinil Telecommunications S.A.E.
Mobinil 2007 Annual Report 17
Claude Benmussa started his career as an Auditor at Coopers& Lybrand. Later he worked as a Financial Director in asubsidiary of Thomson CSF.
His career in France Telecom Group started in 1991, as aFinancial Director at France Telecom EGT. He is currentlySenior Advisor at PricewaterhouseCoopers (PwC) Paris.
From 1994 to June 1996, Benmussa was Deputy GeneralManager at France Telecom Mobile Services, in charge ofFinance and International Development.
At the same time, he remained a Director of EGT with a
consulting role at the side of the President for FinancialControl and Legal Affairs.
At the beginning of 2007, Benmussa resigned from his positionin France Telecom Group as Senior Vice President & DeputyCFO in charge of Controlling in order to assume a SeniorAdvisor position at PwC, Paris.
Benmussa was Board Member in several telecommunicationcompanies (TPSA in Poland, Telmex in Mexico, and Transpacin France). He is currently a Board Member of OrangeFrance, Bull, and the Chairman of the Audit Committee ofECMS-Mobinil.
Claude BenmussaMobinil Telecommunications S.A.E.
David Hobley is Chairman, Central Europe, covering Easternand Central Europe for Deutsche Bank's investment bankingbusiness.
Hobley has 35 years of investment banking experience, firstat SG Warburg & Co. /SBC Warburg (now UBS) and DeutscheBank.
He has substantial experience in all types of investment
banking - equity capital markets, debt capital markets,government and corporate advisory, and over 25privatizations.
Hobley was on the board of Orange SA in Paris for fouryears. He still serves as an independent director on theboards of several Orange Group companies as well assome other European listed companies.
David HobleyMobinil Telecommunications S.A.E.
18 Mobinil 2007 Annual Report
Bertrand du Boucher is Chief Financial Officer of OrangeInternational since September 2000.
Before joining Orange, du Boucher was at France TelecomMobiles Services, a holding company dedicated todeveloping France Telecom service provider activity throughEurope. He was appointed Director of InformationTechnology and member of the Executive Committee ofthe company. In 1998, du Boucher was appointed Director
of Information Technology of FTMI, a holding companydedicated to developing France Telecom’s activities in thewire-free sector outside France.
Du Boucher began his career in 1979 at Unilog Group, aFrench company providing consultancy services for theintegration of information technologies. He graduated fromthe Institute Supérieur du Commerce de Paris.
Onsi Sawiris is Chairman of Orascom Construction Industries(OCI), and Board Member of Orascom for Hotels andDevelopment (OHD), Orascom Technology Systems,Orascom Trading Co., the Egyptian Cement Co. (ECC) andOrascom Telecom Holding (OTH).
He founded Orascom in 1976 as a general contracting andtrading company. By the early 1990s, Sawiris had establishedOrascom as a leading private sector contractor by workingin partnership with international companies pursuing projects
in Egypt. He then diversified the business by venturing intoTelecom and Tourism. Now the Orascom Conglomeratehas transpired into three major groups OCI, OT and OHD.
Sawiris is Chairman of the Board of Directors for Misr ExteriorBank, Pharaonic AIG Insurance Co and YMCA in Cairo.He holds a Bachelor of Science degree in Engineering fromCairo University.
Bertrand du BoucherMobinil Telecommunications S.A.E.
Onsi SawirisHonorary Chairman
Mobinil 2007 Annual Report 19
Aldo Mareuse is Group Chief Financial Officer of OrascomTelecom Holding S.A.E., a position he has held since 2002.
He is a member of the Board of Directors of OTA (Algeria),ECMS (Egypt), Mobilink (Pakistan) and OTT (Tunisia) allOrascom Telecom GSM subsidiaries among others, amember of the Board of Directors of Wind (Italy) and ofHutchison Telecom International Ltd, an emerging marketmobile and f ixed telecommunication operatorheadquartered in Hong Kong.
Prior to joining Orascom Telecom, he worked from 1990 to2002 in various positions and locations in the investmentbanking division of Credit Suisse First Boston “CSFB.” His lastposition within CSFB was Managing Director in the InvestmentBanking Division, Telecommunications Group. He holds anEngineering degree from Ecole Centrale de Lyon (France).
Aldo MareuseOrascom Telecom Holding S.A.E.
Nadia Makram Ebeid is the Executive Director of the Centerfor Environment and Development of the Arab Region andEurope (CEDARE), an international diplomatic position sheassumed in January 2004. Previously, as the first SpecialPeace Envoy of the Secretary General of the Arab Leagueto Sudan (2002-2003), her efforts contributed to the signatureof Sudan’s subsequent Peace Agreement.
Ebeid was formerly Egypt’s first Minister of the Environmentto head the newly created Ministry in 1997, for a period offive years, and the first female minister to hold this position
in the Arab world. One of her most noticeable achievementswas the initiation of a $100 million River Nile Pollution Pre-vention Program. As a result, and for the first time, she declar-ed the River Nile free from polluted industrial waste-waterdischarge.
Ebeid also has a long-standing professional record with theUnited Nations System in the field of international develop-ment cooperation. She also has academic pursuits, as shewas a visiting professor at George Washington University,USA.
Nadia Makram EbeidPublic Shareholder
20 Mobinil 2007 Annual Report
Fahd El Shobokshi is Chairman of Nile City Investments. Thecompany is the owner of the Nile City Project, one of themost ambitious urban development projects ever under-taken in Egypt, combining a business address, shoppingvenue, hotel, and residence.
El Shobokshi sits on the Board of numerous companies, suchas South Valley Cement Company, of which he is Vice
Chairman and CEO. He is also Chairman of El ShamsPyramids Company for Hotels & Touristic Projects. Thecompany is the owner of Le Meridien Pyramids Hotel inCairo.
He holds a Bachelor of Arts in Business and a Master’s degreein Economics from Whittier College, California.
Fahd El ShobokshiPublic Shareholder
Ahmed ElBardai is an international executive with over 30years of financial sector experience in the Middle East andNorth America. He started his career in 1974 as a consultantfor Price Waterhouse, later moving to Crocker National Bankin San Francisco, U.S.A. In 1986 he was recruited by Citibankin Athens, Greece, as their Financial Controller for the MiddleEast and North Africa.
During his tenure with Citibank, ElBardai held several positions,culminating with the position of Citibank Regional Head forNorth Africa. He moved to Arab African International Bankin 1996, where he held the position of Vice-Chairman andManaging Director for three years. In 2000, he was appointedChairman of Banque du Caire - Egypt's third largest publicsector bank, becoming the first ever private sector banker
to hold such a position. ElBardai played a pivotal role inestablishing the Middle East region's first and only commercialprivately-owned microfinance service company, REEFY, andis the company's Chief Executive Officer.
ElBardai was head of the Egyptian Bankers Association from2001 to 2005, and was a Board Member of the institute ofInternational Finance, UBAF in Paris, New York and HongKong, and is currently a member of the Board of Egypt Air.
ElBardai received a Bachelor of Arts in Business Administrationfrom Cairo University in 1974, and a Master of Arts in Inter-national Management from Thunderbird, Arizona in 1977.
Ahmed ElBardaiPublic Shareholder
Mobinil 2007 Annual Report 21
The ECMS Corporate Governance Structure
ECMS General Assembly
ECMS Board of Directors
Non-ExecutiveAudit CommitteePresident and CEO Non-Executive
Compensation Committee
The Corporate Governance Department
Independent AuditorsRegulatory and Corporate Affairs
Corporate Governance
22 Mobinil 2007 Annual Report
The Corporate GovernanceDepartment
The Corporate Governance Departmentis responsible for achieving ECMScorporate governance mission which isattaining the highest levels of trans-parency, accountability, and integrity.This objective extends, not merely tomeet with statutory requirements, butalso to go beyond them, by putting intoplace procedures and systems whichare in accordance with best practicesof governance.
Corporate governance serves as thesecretariat of the Board of Directors; itincludes the relationships among theprincipal stakeholders such as shareholders, Board of Directors, and manage-ment. Other stakeholders include emplo-yees, suppliers, customers, banks, andgovernmental entities, Capital MarketAuthority (CMA), Cairo and AlexandriaStock Exchange (CASE), and Misr forClearing, Settlement, and Central Depo-sitory (MCSD).
The corporate governance frameworkprotects and facilitates the exercise ofshareholders’ rights as established bylaw, and provides equitable treatmentfor them including minorities and foreig-ners.
The corporate governance frameworkfinally ensures timely and accurate disclo-sure of all material matters regarding thecompany.
The department is the main communi-cation channel between the companyand shareholders. It organizes ECMSassembly meetings, supports ECMS andMobinil board secretary, and ensuresproper cascading of board decisionsand requests to company management.
2007 Highlights
1-Responsibilitiesß Ensuring compliance of cooperation
with governing legislation and by-laws and that all disclosures doabide by corporate governanceproceduresß Educating employees and other
parties of interest about the role andimportance of Corporate Governanceß Facilitating and following up EXCOM
[Executive committee] meetingsß Developing, reviewing, and updating
policies
2-Executive Meetingsß 3 ECMS General Assembly and 9
ECMS board meetingsß 3 Mobinil Telecom General Assembly
meetings and 8 board meetingsß 9 Audit Committee meetingsß 12 ExCom meetings
3-New Policies Developedß Delegation of Authority – frame and
methodology for personnel to delegatesome powers to others in cases ofunavailabilityß Related party transaction–metho-
dology where the board of directorsapproves key guiding principlesß Permanent insiders – identify, control,
and monitor ECMS stock tradingactivities by employees who mayhave early access to information
Corporate Governance Principles
ECMS is governed by its GeneralAssembly of Shareholders and is abidingby Investment Law number 8/1997,Capital Market Authority Law number95/1992, and Corporate Law Number159/1981.
The General Assembly of Shareholderselects a Board of Directors of 12 membersrepresenting shareholders as follows:
ß 7 members representing Mobinil Tele-communications S.A.E
Mobinil 2007 Annual Report 23
ß 1 member representing OrascomTelecom Holdingß 3 members representing Public Share-
holdersß 1 member as Honorary Chairman
The BoD has a majority of non-executiveand independent members. Currently,the Board has only one executivemember, Alex Shalaby, ECMS Presidentand CEO.
The Board should at least hold four mee-tings per year and they are responsible to:
ß Provide entrepreneurial leadership tothe company within a framework ofprudent and effective controls.ß Ensure that the necessary financial and
human resources are in place to meetthe anticipated objectives.ß Review management performance.ß Set the company’s values and stan-
dards and ensure that its obligationsto its stakeholders are understood andmet.
The current ECMS BoD was elected inMarch 2007 for a term of three years.
For the sake of governance best prac-tices, the Board has formed twocommittees: the Audit Committee andthe Compensation Committee. Eachcommittee is composed of non-executive directors and is chaired by anelected chairperson.
The Audit Committee
The ECMS Audit Committee is composedof:
Chairman: Claude BenmussaMembers: Ahmed ElBardai, AldoMareuse and Bertrand du Boucher.
The Audit Committee is mandated bythe Board to approve quarterly financialstatements and Earnings Releases. Thisapproval is, however, subject to ratifica-tion by the BoD.
The Committee also has other respon-sibilities, such as the bi-annual risk review,approval and follow up of internal auditplan implementation, review of externalauditors’ reports and internal controlfindings and plans.
The Audit Committee holds at least fourmeetings and four conference calls peryear. In addition, the AC holds executivemeetings with external auditors at leastonce a year. The Audit Committee ap-proves the external auditors’ engage-ment terms and fees which are presen-ted to the General Assembly for ratifi-cation.
The Committee appoints and/or removesthe head of Internal Audit who reportsto it on all issues related to its activities.
The Compensation Committee
The ECMS Compensation Committee iscomposed of:
Chairman: Olaf SwanteeMember: Naguib Sawiris
The Compensation Committee judgeswhere to position ECMS compared toother companies in the Egyptian Market.It reviews and updates, on a periodicalbasis, the employees’ benefits schemesand stock option plan. It is also respon-sible for developing formal and trans-parent procedures for fixing the remune-ration packages of individual directors.
2008 ECMS Calendar
24 Mobinil 2007 Annual Report
Board Meeting
Q12008
Q22008
Q32008
Q42008
General Assembly
March 19(Cairo, Egypt)
July 8(Paris, France)
Sebtember 9(Cairo, Egypt)
December 2(Paris, France)
March / April(Cairo, Egypt)
August / September(Cairo, Egypt)
Mobinil 2007 Annual Report 25
The Corporate Organization
Magdy GabraDirector,Customer Service
Ahmed Abou DomaDirector, Marketing
Audette HannaVP, HumanResources &Administration
Guillaume van GaverVP, Commercial
Hashim ZohairVP, Regulatory &Corporate Affairs
Tarek RizkallahDirector, Sales
Oussama DanielDirector, Legal
26 Mobinil 2007 Annual Report
Hany El KafrawyDirector, IT
Marwan HayekVP, Technology
Mohamed NabihDirector, CorporateStrategy & BusinessDevelopment
Khalid EllaicyVP, Finance
Rana AbbadiVP, Transformation
I.N. (Alex) ShalabyPresident & CEO
Mobinil 2007 Annual Report 27
I.N. (Alex) ShalabyPresident and Chief Executive Officer
On November 1st, 2005, Alex Shalaby step-ped up to become second President andCEO of Mobinil.
Shalaby had himself fixed on a set goal rightfrom the start: to keep the human face onMobinil while making certain it maintainedits leadership position despite the fiercecompetition that has existed in a rapidlychanging market.
Mobinil has yet to become more than justa large commercial entity traded on thestock exchange, an objective that hasalready come a long way through Shalaby'sparticipation and support for many socialand philanthropic responsibilities.
As former Executive Vice President ofOrascom Telecom Holding (OTH) and con-tinuing to be one of its Board Members,Shalaby’s regional experience provedinvaluable as OTH expands its globalfootprint. In addition to its public share-holders, Mobinil is also partly owned by OTHand France Telecom - Orange, a balancingchallenge for Shalaby in order to keep thetrust and confidence of these two majorshareholders as well as the thousands ofpublic shareholders.
Alex Shalaby was Chief Officer of RegulatoryAffairs for Mobinil from 1998 to 2005 and wasresponsible for the licensing and regulationsrequired for setting up Mobinil as the firstmobile operator in Egypt.
Between 1993 and 1995, Shalaby wasRegional Director for International PublicAffairs for AT&T, based in Cairo, Egypt, wherehe was the principal interface with keyagencies within the governments in theregion on matters impacting AT&T’s opera-tions.
He established first presence for AT&T, oneof the largest telecommunication com-panies in a number of countries in the MiddleEast as well as in South Africa. It was during
these years that he served on the Boards ofthe American Chamber of Commerce, asits President (AmCham 1991 - 1992), Seedsof Peace and the bi-national FulbrightCommission, as his AT&T responsibilitiesshifted from local to regional, with particularfocus on North Africa and the Levant.
Shalaby started his career with AT&T in datacommunications, moving between posts inCalifornia and New Jersey, where he workedwith Bell Labs. Shalaby was ManagingDirector for AT&T in Egypt, and GeneralManager for the Middle East and NorthAfrica region until 1993. Shalaby held avariety of technical and managerial posi-tions and was involved with AT&T start-upsin the Gulf (1977–1980). In 1977, Shalabymoved to Saudi Arabia to help launch thefirst AT&T microwave project before movingon to Kuwait and the UAE. Once again,during this period he established andsecured a solid position for AT&T in the Gulfregion.
Shalaby graduated with a Bachelor ofScience degree in Electrical Engineeringfrom Alexandria University’s Faculty ofEngineering (1966) and started his pro-fessional career with Egypt Air as a Radioand Radar Engineer for two years beforeimmigrating to the United States in 1969,where he had a brief stint with United Airlinesin San Francisco, California, before movingon for a 28-year career with AT&T startingwith Pacific Telephone in San Jose, Cali-fornia. He also holds a Master of Sciencedegree in Electrical Engineering andComputer Science, San Jose State University(1974).
Shalaby lived and worked in WashingtonDC from 1995 to 1998 and was Director ofGovernment Affairs at AT&T. He was part ofthe Law and Government Affairs teamresponsible for lobbying the differentbranches of the US government for telecomreforms in the developing markets of theMiddle East, Africa, Central Asia, and EasternEurope.
28 Mobinil 2007 Annual Report
Audette HannaVP, Human Resources and Administration
Audette Hanna was appointed as VP,Human Resources and Administration inMay, 2006. Hanna joined Mobinil as HumanResources Director in October 1998. Sincethen, she has made quite many accomp-lishments in the fields of recruitment andselection, compensation and benefits,training and development, employeerelations, and medical benefits.
Audette Hanna was appointed HumanResources Director in June 1999. She hasover 15 years of intercultural experience inthe fields of recruitment and selection,compensation and benefits, training anddevelopment, and employee relations; shejoined the Orascom Group as a HumanResources Manager responsible for buildingup the HR infrastructure of 43 member com-panies with 16,000 employees. Hanna holdsa Bachelor’s degree in Commerce andseveral postgraduate diplomas in HumanResources and Personnel Management.
Guillaume van GaverVP, Commercial
Guillaume van Gaver is Commercial VP,and is in charge of Marketing, Sales andCustomer Service. He has worked for morethan 16 years in Marketing and Sales in thetelecommunications industry.
Guillaume van Gaver has been appointedCommercial Vice President in August 2006.Before joining Mobinil, his last position wasDirector of Direct Sales in Orange, UK. Hestarted his career back in 1993 withArianespace, Washington DC, USA, asMarketing Analyst. In 1995, he joined FranceTelecom Mobile Business Unit as LargeAccount Sales Manager and then becameBusiness to Business Senior Manager. He thenjoined Orange France as Distribution SalesDirector followed by a three-year role asBusiness Development Director. Guillaumevan Gaver holds a Management Degreein Finance from Institut Supérieur duCommerce de Paris. He also receivedErasmus Certificate at University of Hert-fordshire (Courses in International Marketing)and graduated from IEP, Insead, 2003.
Hashem ZohairVP, Regulatory and Corporate Affairs
Mohamed Hashem Zohair was appointedVP, Regulatory and Corporate Affairs in May2006. Back in 2000, Zohair joined the Mobinilfamily as Director of the Government AffairsDepartment.
Zohair has been developing and imple-menting Business Management Techniquesin the Information Technology and Telecom-munications fields for 34 years. He wasappointed Government Affairs and TelecomAuthorities Director in August 2000.
Prior to Mobinil, he spent 20 years at NCR –Egypt, holding various positions includingManaging Director, General Manager, Salesand Marketing Director, and System ServicesDirector for the Near East Area. He also ledseveral national projects, one of which wasfor Telecom Egypt. Zohair holds a Bachelor’sdegree in Electronics Telecommunications.
Khalid EllaicyVP, Finance
Khalid Ellaicy has been appointed as VP,Finance on January 1st, 2007. Ellaicy has over21 years of experience in finance, auditing,and accounting. His last position beforejoining Mobinil was Group Director of Financeat the Mobile Telecommunications Company- Kuwait [Zain]. Before joining MTC, Ellaicyachieved the level of “Partner” at KPMGCairo, becoming the youngest partner in thehistory of the Egypt practice. At KPMG, Ellaicywas in charge of auditing major clients ope-rating in a broad spectrum of business indus-tries and he also led teams in providing otherservices such as Due Diligence Reviews andPrivatizations.
Prior to that, Ellaicy was Regional FinanceDirector at Pepsi Cola International, Egypt,where he was in charge of the local andconsolidated accounting and reportingrequirements for three countries. Ellaicy'sexperience included significant internationalexposure mainly in the USA. He is a CertifiedPublic Accountant (CPA). He currently main-tains professional memberships at theAmerican Institute of Certified Public Accou-ntants and the Egyptian Society of Accou-ntants and Auditors.
Mobinil 2007 Annual Report 29
Marwan HayekVP, Technology
Marwan Hayek was appointed VP, Tech-nology in September 2007, whereby heshared with his predecessor Hervé Suquet,a transitional period until January 1st, 2008.
From 2003 to 2007, Hayek was Chief TechnicalOfficer of Mobilink , Pakistan's leading mobileservice provider and an OTH subsidiary.Marwan made Mobilink’s network qualityjump to top position in a six-operator market,introducing technologies such as NGN [NewGeneration Networks], soft switches, ngHLR,and WiMAX broadband network, 6000 kmof optical fiber backbone, and extensiverural coverage. Before joining Mobilink, Hayekwas Group Technical Director at OTH wherehe established extensive experience in NorthAfrica and Asia, where he led the deploy-ment of new networks and the expansion ofothers within the OTH group.
Marwan graduated from Athénée Royalede Mons in Belgium in 1990. He has a Master'sdegree in Electrical Engineering and Tele-communications from Faculté Polytech-nique de Mons, Belgium .
Rana AbbadiVP, Transformation
Rana Abbadi is an experienced Financeand Operations professional with over 17years of intercultural experience. She hasbeen working with Mobinil since June 1998,where she became Finance and Adminis-tration Director in May 2000, and VP andChief Financial Officer in May 2006 prior toher current post. Effective January 1st, 2007,Abbadi was appointed VP, Transformation.
Throughout her career Abbadi held differentmanagement positions in Jordan’s Fastlinkand the Welfare Association and Deloitteand Touche to name a few. Abbadi joinedMobinil in June 1998 as Financial Controllerthen moved to Finance and Ad-ministrationDirector in May 2000. She then joinedOrascom Telecom Holding SAE in June 2000and returned to Mobinil in June 2001 asFinance Director. She holds a Bachelor’sdegree in Accounting from the University ofJordan.
Ahmed Abou DomaDirector, Marketing
Ahmed Abou Doma has been appointedMarketing Director in October 2003. He hasbeen working with Mobinil since August 1998in the Market Development Department asSenior Market Planning and DevelopmentManager in 2000 and Senior Market Strategyand Analysis Manager in 2001. Prior toMobinil, he developed some of IBM businessverticals. In 1996, he led the Business Deve-lopment team in Datum IDS, establishingtheir Internet Business Unit. He holds aBachelor of Science degree in Electronicsand Communications Engineering fromCairo University in 1992.
Hany El KafrawyDirector, Information Technology
Hany El Kafrawy was appointed Director ofTechnology Management in July 2000. Hehas over 22 years of global experience inthe fields of Information Systems andTechnologies. He joined Mobinil in October1998 as Senior Manager of InformationTechnology Services. Prior to working withMobinil, El Kafrawy has been working forIBM World Trade Corporation at severallocations around the world. He holds anHonors Bachelor’s degree in Electronics andElectrical Engineering from ManchesterUniversity, UK.
Magdy GabraDirector, Customer Service
Magdy Gabra was appointed CustomerService Director in May 2003. Gabra hasover 25 years of multinational experiencein the fields of Marketing, Sales andCustomer Service. He joined Mobinil inJanuary of 2002 as the National Sales SeniorManager. In May 1978, Gabra joined TransWorld Airlines Inc. (TWA) in the CustomerService Department and held variousmanagerial positions in the Middle East andEurope responsible for Sales, Marketing, andOperational activities. Gabra holds aBachelor’s degree in Pure Mathematics andMathematical Statistics.
30 Mobinil 2007 Annual Report
Mohamed NabihDirector, Corporate Strategy and BusinessDevelopment
Mohamed Nabih joined the Mobinil familyin August 1999 as Senior Manager for theCommercial Strategy Department, nowcalled Corporate Strategy and BusinessDevelopment. He was appointed CorporateStrategy Director in October 2005. Nabihhas over 13 years of experience in businessdevelopment and strategy in the telecom-munications industry. He studied Economicsin Sweden. In 1993, he received his Masterof Science in Economics from the StockholmSchool of Economics, Sweden. He receivedhis PhD in Economics from the CatholicUniversity of Tilburg, Netherlands.
Oussama DanielDirector, Legal
Oussama Daniel has been appointed LegalDirector at the Regulatory and CorporateAffairs Department, effective August 1st,2007. Daniel has more than 15 years expe-rience in legal affairs in Egypt and the MiddleEast. Prior to joining Mobinil, he was theHead of the Legal and Compliance Depart-ment for Egypt and the United Arab Emiratesin Barclays Bank. Prior to that, he assumedthe position of Corporate Lawyer forOrascom Telecom Holding for two years.
Daniel also has experience in legal manage-ment in the Gulf region, as he was the LegalAdvisor of Almana Group of Companies.
Daniel graduated with honors from theFaculty of Law of Alexandria University in1991. He holds a Masters degree of Inter-national Business Law from the Institut deDroit des Affaires Internationales, Faculty ofLaw from Cairo University and Universityof Paris Dauphine, France (1994).
Tarek RizkallahDirector, Sales
Tarek Rizkallah joined Mobinil in May, 2007as Sales Director. Rizkallah has over 21 yearsof experience in the telecommunicationsindustry with various Orascom subsidiaries.His last position was Chief Executive Officerof Ring Distribution. He also held the positionof General Manager, Orascom Distribution,where he setup and managed a world classinformation technology distribution com-pany for dealers’ sales channels, andanalyzed the cost factors and conductedcost reduction and control.
Rizkallah has extensive experience withOrascom in the Computer Division as hewas Personal Computer Products and Peri-pherals Business Manager (1993 -1997) thenheld the position of Computer Division HPPersonal Computer Products and PeripheralsSales Manager (1989 -1992) and HP PersonalComputer Products and Peripherals ProductManager (1986 -1988).
Tarek Rizkallah holds a degree in ElectricalEngineering, Computer Systems and Auto-matic Control from Ain Shams University(1985) and a Master of Business Administra-tion, from Ashford University, London (1997).
Mobinil 2007 Annual Report 31
32 Mobinil 2007 Annual Report
Sakiat El Fayoum
Mobinil 2007 Annual Report 33
Our Responsibility
Our ultimate aim is not onlyto increase revenues, but alsoto build long-term relation-ships and loyalty with ourcustomers.
Commitment to our Customers and Employees
Mobinil Team in Business Football Tournament
34 Mobinil 2007 Annual Report
Commitment to our Customers
Our business objective is to maintain ourleadership in providing the best qualityservice and best value for money to ourcustomers. We are committed to thehighest levels of customer satisfaction bymeeting our customers’ needs, providingsuperior network quality and the widestnetwork coverage, and offering a greatcustomer service experience.
Being Customer OrientedOur ultimate aim is not only to increaserevenues but also to build long-termrelationships and loyalty with ourcustomers in order to sustain our successin the future. To do so, we provide cus-tomers with accurate, truthful, completeand consistent information concerningour products and services.
Protecting Customer InformationCustomer information is strictly confiden-tial. We safeguard customer informationstored in our records and information sys-tems in compliance with the Telecom-
munication Law no (10) for the year 2003.
Commitment to our Employees
Our employees are our most valuedasset. Our ability to succeed dependson the integrity, knowledge, skills, diversity,and teamwork of our employees. Weare shaping a challenging, fair, firm, andproductive work environment, whichemphasizes mutual respect and team-work. We strive to reward high perfor-mance and we promise to be responsiveto the needs of our employees. Thecompany is committed to providing equi-table compensation, excellent workingconditions, and a fair atmosphere withgreat opportunities for professionalgrowth.
Equal Employment OpportunityMobinil is an equal opportunity employer,and we pride ourselves with the EqualEmployment Opportunity policy (EEO).All employment applications are consi-dered without regard to age, gender,religion, disability, or marital status.
Commitment to our Shareholders
Signing of 3G License
Mobinil 2007 Annual Report 35
Tolerance and DiversityWe respect others; tolerate our differen-ces; and believe in the power of diversity.We strive to create a culture wheretolerance and respect exist betweenemployees. The diversity of people bringsstrength to our Mobinil team. Regardlessof our differences in backgrounds, roles,age, gender, religion, or physical ability,we all bring value to our companythrough our work. We shall tolerate andrespect our diversity and differences andtreat each other fairly.
Respect for PeopleWe should respect each and every per-son we interact with during our businessdealings including customers, emplo-yees, suppliers, and all parties that havea business relationship with the company.We should consistently treat others withthe respect and dignity which we desirefor ourselves.
Commitment to our Shareholders
Our commitment to our shareholders is
to maximize our earnings and build long-term success responsibly. Maintaining astrong financial position depends onproviding the best service to our custo-mers. It is our responsibility to provide ourshareholders with honest and accurateinformation about our financial positionbased on Egyptian Stock Exchange lawsand regulations. All of us, as Mobinilemployees, are committed to preservingour company’s assets, information andresources.
Protecting Company Resources andAssetsWe should treat and handle all of ourassets and resources with extreme careas if they were our own. We are allexpected to make every effort to ensurethat intellectual property and Mobinil’sknow-how and projects are protected.We are accountable to our shareholdersfor safeguarding our company’s assets.
Accurate Financial ReportingAs part of our commitment to havingaccuracy in communication, we record
Commitment to our Community
Mobinil Blood Donation Campaign
Mobinil promises that it willremain active in supportingmany social and culturalactivities in the Egyptiansociety.
36 Mobinil 2007 Annual Report
all financial transactions according tothe proper accounting rules andstandards as required by Egyptian lawsand regulations. All of our financial booksand records properly account for allassets, liabilities, revenues, and expenses.Our financial statements reflect ourfinancial position accurately andhonestly. Mobinil complies with the rulesand regulations of the Capital MarketAuthority and the Egyptian Stock Ex-change.
Complying with Laws and RegulationsMobinil is committed to adhering to thehighest standards of business practices,and abiding by all laws and regulationsthat we are subject to. Mobinil is alsocommitted to complying with all corpo-rate governance and internal controlrules that we are subject to as well as alllegal obligtions as required by ourshareholders.
Commitment to our Community
We are a responsible corporate citizen
not only in creating job opportunities,and contributing to the growth of thenational economy, but also by adheringto the highest standards of businesspractices, and abiding by all laws andregulations in Egypt. We believe, Mobinilplays a leadership role in our communityby acting as a role model in its commit-ment to excellent customer service,and to a comfortable and healthy workenvironment. In addition, we are com-mitted to following all Egyptian safetyand environmental standards, whichare set in accordance with internationalstandards, to guarantee the health andsafety of our community. We are certifiedas an ISO 14001 company that is com-mitted to providing maximum environ-mental protection to the local com-munity. Mobinil promises that it will remainactive in supporting many social andcultural activities in the Egyptian society.
Community ActivitiesMobinil plays a leadership role in servingthe community in which it operates. Wehave sponsored many charitable events
Commitment to our Suppliers
Mobinil Concert
Mobinil 2007 Annual Report 37
to aid the disabled and disadvantaged,and funded a number of social activitiesincluding sports events to support publicinterest. We will continue to make contri-butions toward development programsin Egypt.
EnvironmentWe are committed to producing highquality and safe services that complywith Egyptian regulations as well asinternational telecommunicationstandards. We will work to understandpeople’s concerns about the environ-ment and health. We are committed toresponsibly managing and minimizingour impact on the environment. We arecommitted to the ISO 14001 standardsby establishing, implementing, andmaintaining an environmental manage-ment system that complies with its req-uirements. We are keen to providemaximum environmental protection forthe local community and we consider itone of our main responsibilities.
Commitment to our Suppliers
We are committed to following thehighest standards of purchasing andcontracting practices that are based onquality, service, timeliness, and cost whenselecting our suppliers, contractors,agencies, and consultants. The purchaseof supplies, materials, and services mustpreserve the integrity of Mobinil’sprocurement process. We adopt nofavoritism when selecting a vendor orany third party with whom we establisha business relationship.
A Promise of Prosperity to Egypt
Volunteering for Injaz is thebest way to bring employees’practical business and personalexperiences along with greatenthusiasm into classroomsthroughout Egypt during theschool year, investing timeand talent into building theleaders of tomorrow.
38 Mobinil 2007 Annual Report
Education
Thanaweya Amma Top StudentsAs part of its annual tradition, Mobinilhonored top Thanaweya Ammastudents at a special ceremony forthe ninth consecutive year.
Mobinil President and CEO AlexShalaby led an engaging opendiscussion with the students, partic-ularly focusing on Mobinil’s role in thecommunity as well as our state-of-the-art technology in the telecommunica-tions field.
Students also toured the Agouza CallCenter, where they were introducedto Mobinil's latest technologies in thefield of customer service.
In addition, Mobinil sponsored thestudents’ overseas trip to Europe,where they got a chance to visit majorinternational companies and got ex-posed to the latest trends and techno-logies as they mingled with peoplefrom different cultures.
Injaz Egypt ProgramMobinil, in collaboration with InjazEgypt, one of the most well-knownnon-profit child-assistance organi-zations, announced the commence-ment of the first round of the Injazprogram for the year 2007 in February.
Volunteering for Injaz is the best wayto bring employees’ practical businessand personal experiences along withgreat enthusiasm into classroomsthroughout Egypt during the schoolyear, investing time and talent intobuilding the leaders of tomorrow.
The Success Skills Curriculum aims todevelop students' interpersonal effec-tiveness through self-assessment ofpersonal strengths and to examinehow such skills match careers ofinterest while at the same time teachpersonal marketing methods.
First Injaz Egypt CompanyCompetitionInjaz Egypt held an event to announcethe "Student Company Competition"winners of Injaz Program in May 2007.Mobinil President and CEO attendedthe event as Chairman of Injaz Egypt,also acting as jury member. Thewinning teams have expressed theirdeep appreciation for Injaz Programand its supporters from the privatesector, as it enriches their knowledgeand helps them set goals and aspirefor a brighter future.
The Company Competition aims tocreate a mutual focus for participatingcountries from all over the Arab world.These events are a crucial part of whatsustains the Injaz network in the MiddleEast and North Africa network,maintains program quality, andassures growth. They are also a power-ful way to motivate teachers, staff, andvolunteers.
Students in Free Enterprise (SIFE)SIFE is a global non-profit organizationthat mobilizes university students tocreate economic opportunities forothers while discovering their ownpotential. SIFE students form teamson their university campuses anddevelop outreach projects that centeron entrepreneurship, market eco-nomics, business ethics, success skills,and finance in their communities. TheSIFE program concentrates on fiveareas: entrepreneurship, marketeconomics, success skills, financialliteracy, and business ethics.
The official name of SIFE’s Success Skillstopic in Egypt is now “The MobinilSuccess Skills SIFE Topic Competition.”Mobinil is being recognized as thenational sponsor of SIFE’s Success Skillsprogram, as SIFE teams used thisofficial name when making referenceto their success skills SIFE activitiesthroughout the year. The 2007 SIFEEgypt National Competition was held
Mobinil Honoring Top Students
Mobinil was proud to offer allits employees the opportunityto donate blood to help savelives in a major blood drive inFebruary 2007.
Mobinil 2007 Annual Report 39
in July 2007 featuring 11 competing uni-versities from all over Egypt.
Mobinil executives evaluated the overalleffectiveness and impact of eachteam’s success skills initiatives accordingto strict judging criteria, giving out cashawards and trophies.
Health
Pro-Peace Physicians in Remote AreasMore than 30,000 Egyptian patientsresiding in Southern Egypt and desertareas benefited from this initiative ledby Mobinil and Orascom TelecomHolding (OTH) to fight the spread ofdisease.
"Pro-Peace Physicians" medical caravanis a year-round program, launched aspart of the leading efforts by Mobiniland OTH for the development of ourcommunity through leading corporateresponsibility programs.
Give Blood, Give LifeEvery five minutes, someone in Egypt
needs a life-saving blood transfusion.Mobinil was proud to offer all its emplo-yees the opportunity to donate bloodto help save lives in a major blood drivein February 2007.
This blood donation campaign wascarried out in coordination with theNational Blood Transfusion Servicesunder the auspices of the EgyptianMinistry of Health and Population. The“National Blood Transfusion Services”aims to provide one million blood unitsannually to fulfill the needs of allEgyptian patients that require nearly320,000 regular blood donors.
Mobinil’s Blood Donation Drive was alsoavailable at Modern Academy Uni-versity in Kattameya in collaborationwith the National Democratic Party.
World Blood Donor DayWorld Blood Donor Day is an annualevent held on June 14, which is the birthdayanniversary of Dr. Karl Landsteiner, whodiscovered the ABO blood group andwas awarded the Nobel Prize for hisimportant discovery.
UNICEF Campaign to Support Children
40 Mobinil 2007 Annual Report
World Blood Doner Day is globally cele-brated to give recognition to voluntaryblood donors. Mobinil hosted a specialcelebration to thank and recognizevoluntary blood donors and launchdonor recruitment programs on thenational level. The event also promotedthe National Blood Transfusion Servicesof Egypt as a nationwide service with akey role in the community at large.
Community
Collaborating with UNICEF to SupportChildren at RiskIn Ramadan 2007, in an effort to bringthe dreams of millions of Egyptianchildren to life, Mobinil joined forces withthe UNICEF to donate a share of therevenue of every phone call madeduring the month of Ramadan to helpsupport the underprivileged children inEgypt. The amount raised from thiscampaign will be used on a variety of“Children Aid” projects. With thecredibility and assistance of the UNICEF,the donation will be directed to pro-grams in the following areas: children
at risk, child labor, children's media, andyoung child survival and development.
El Gomhoureya Newspaper CharityHotline139This is a year-round program carried outfor the second year in cooperation withEl Gomhoureya newspaper, in whichMobinil sponsors the human cases withmonetary donations throughout 12months. Donations are given based onmerit, and each case is evaluatedindividually by El Gomhoureya news-paper.
Support for Children with Autism “Listento their Silence”Throughout April, which is the monthrecognized worldwide to activate au-tism initiatives, Mobinil cooperated witha non-governmental organization,Advance, to sponsor a variety of eventsin support of autism including a sportsfun day at Wadi Degla Club, an artexhibition, and a one-day conferenceentitled “Medical & Educational Innova-tions in the Field of Autism” in Mansoura.
Mobinil Puts a Smile on Children’s Faces
Mobinil 2007 Annual Report 41
Autism is a life-long developmentaldisability that prevents individuals fromproperly understanding what they see,hear, and otherwise sense. It occurs inapproximately one out of every 500births and is four times more commonin boys than girls.
Autism is found throughout the world infamilies of all racial, ethnic, and socialbackgrounds. Although there is nodefinite statistical figure to indicate thenumber of autistic children in Egypt, itis confirmed that the condition is quitewidespread, and much support isneeded to facilitate diagnosis, treat-ment, and resources to improve thequality of life of those affected.
Egypt Orphans TourFor three consecutive years, Mobinil hasbeen hosting a special celebration inApril to bring a little cheer to over 30,000of Egypt’s orphans. More than 50 Mobinilemployees volunteered in this event tobrighten the children's day. In 2007, theweek-long Orphans Tour kicked off inSouthern Egypt Governorates targetingover 250 orphans in each city. The Tour
featured live entertainment, competi-tions, and giveaways.
Put a Smile on a Child’s FaceDuring the holy month of Ramadan(September - October 2007), Mobinilcooperated with more than 30 charityassociations and the Cairo SheratonHotel to host daily Ramadan Iftars(breakfasts) featuring entertainmentprograms to bring smiles to thousandsof deprived children.
Back-to-School PackagesEvery school year for the last three years,Mobinil has been giving away essentialschool supplies to thousands of deprivedchildren in Egyptian public schools.
In support of this enormous project,Mobinil employees volunteered to helpin the distribution of packages to 50,000children since its inception. Mobinilinvested more than EGP 1 million tomake this project a true success tobenefit the community.
42 Mobinil 2007 Annual Report
Environmet
World Environment DayMobinil was one of the sponsors of theWorld Environment Day (WED) celeb-ration, under the auspices of H.E. Dr.Maged George, Minister of State forEnvironmental Affairs, and coordinatedby the British Council in Egypt and WadiEnvironmental Sci-ence Center, anEgyptian non-governmental organi-zation working in the field of environ-mental protection.
The slogan for the WED 2007 was“Melting Ice – a Hot Topic”, and theselected theme focused on the effectsthat climate change is having on polarecosystems and communities and itsconsequences around the world. Theevent was attended by over 3000people.
The OHSAS 18001 CertificateMobinil was awarded the OccupationalHealth and Safety Assessment Series(OHSAS) 18001 certificate in 2007. OHSAS18000 is an international occupationalhealth and safety management systemthat allows organizations to controlrelated risks and improve overall per-formance.
As usual, Mobinil was a pioneer inreceiving such certification amongtelecom companies operating in theregion, and has been first to reap itsbenefits, including:
ß Reduced work-related accidents,
illnesses, and their relevant cost
ß Compliance to local legislations
ß Reduced risk of citation or penalties
ß Reinforced company image and honor-ing of its role as a good corporate citi-zen
Entertainment
Mobinil Music Awards 2007For the first time in Egypt, Mobinil launch-ed "Mobinil Music Awards 2007" basedexclusively on customers’ choice fortheir favorite male singer, female singer,best song, and best video clip. Mobinilcustomers voted by calling 1119, andresults appeared instantly on MazzikaTV and Mobinil.com
On Wednesday November 7, 2007,Mobinil hosted an exclusive entertain-ment event to celebrate the first MobinilMusic Awards 2007 with a large numberof Mobinil customers. The concert tookplace at the Hockey court at CairoStadium featuring live performances byNancy Agram, Tamer Hosny, andMahmoud El Esseily, and Mobinil pre-sented the awards to the winning artists.
Cairo International Film FestivalAs part of Mobinil’s continuous effortsto enrich arts and culture in Egypt andin continuation of our strong entertain-ment platform in the Egyptian commu-nity, Mobinil and Orascom TelecomHolding (OTH) sponsored the 31st CairoInternational Film Festival for the secondconsecutive year.
The Wonders of Disney on IceMobinil was proud to bring “TheWonders of Disney on Ice” live perform-ances at the Covered Hall - CairoStadium from July 3 – 29, 2007.
Shakira Live in ConcertTo celebrate the milestone of 10 millionsubscribers, Mobinil hosted an exclusiveevent on March 28, 2007 at the PyramidsPlateau. Pop music sensation Shakiraperformed live for the first time in Egyptat the magnificent Giza pyramids aspart of her world tour.
Shakira is one of the most sensational popand rock superstars on the inter-nationalscene, with over 30 million records sold.
Mobinil Booth during ICT
Mobinil 2007 Annual Report 43
Industry
Technology Meets Your NeedsOn February 4, 2007, Cairo ICT’ 07opened its doors to visitors to experiencethe latest in the world of technology.Mobinil presented its latest productsand services and demonstrated itsactive role in providing state-of-the-arttechnologies that meet the needs ofthe Egyptian society.
For over eight years, Mobinil hasmaintained its leading position asEgypt’s number one mobile operator,the vision that we had in 1998 - “a mobilein every hand” - is now a reality. Today,we continuously thrive to provide ourcustomers with cutting edge techno-logy that meets their changing lifestyleneeds.
Sports
Mobinil Business Football TournamentFor the fourth consecutive year, Mobinilhosted the Mobinil Business FootballTournament last Ramadan. Thirty-two ofEgypt’s largest companies were part ofthis exciting annual event, making it atough yet much anticipated com-petition.
44 Mobinil 2007 Annual Report
Cairo ICT 2007
Mobinil 2007 Annual Report 45
Market Close-up
* According to the Egyptian Ministry of IT and Telecom, February 2008.
** According to the Egyptian Ministry of IT and Telecom, February 2008.
Fixed Telephone Penetration Mobile Penetration
40.6
15.2
24.8
15.0
19.1
14.6
10.9
13.612.8
8.56.7
11.4
2001
10.1
2002 2003 2004 2005 2006 Dec.2007
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Fixed vs Mobile Lines Penetration (%)
Mobinil is enforcing its leader-ship with six million additionalsubscribers to the leading net-work in Egypt during 2007.
The Egyptian Market
46 Mobinil 2007 Annual Report
Competitive Environment
As one of the markets with the highestgrowth rates and growth potential, theEgyptian telecommunications scene haswitnessed fierce competition, bothamong existing and new players, in 2007.The telecommunications market hasbeen increasing in terms of number ofplayers within each of its industries, mainlythe mobile market which witnessed theentrance of the third player, EtisalatEgypt, putting an end to a duopolisticmarket.
The mobile industry has been facingcompetition on both direct fronts likefixed lines and payphones, and onindirect fronts such as Internet connec-tivity.
However, several elements are actingin favor of the mobile industry and areplacing both direct and indirect fronts’competition at a competitive disad-vantage:
ß Increasing customer attraction to ValueAdded Services (VAS)
ß More convenience for the customerß More efficient penetration and cover-
age of remote areasß Relatively low cost of acquiring a mo-
bile line
Facts require no explanation.Mobinil is enforcing its leadership with sixmillion additional subscribers to theleading network in Egypt during 2007.
The mobile industry in Egypt is growingat increased rates. The overall penetra-tion rate reached approximately 41%*at the end of 2007, up from a low of 1.3%in 1999.
There are currently around 11 millionfixed lines in Egypt, representing only15.2% penetration rate**. They are servedby Telecom Egypt.
Over 57,000 payphones, offered by threedifferent service providers, have beeninstalled throughout Egypt over the pastfew years, offering voice connectivityand Pre-paid cards services. Growthrate, however, has slowed down signifi-cantly in recent years in favor of mobileoperators.
Further indirect competition for themobile industry, though not licensed toconsumers, stems from fixed Internetconnectivity to homes and businesses,as it gives users access to Voice over IPservices. Currently, there are four classA, eight class B, and over 208 class C ISPlicenses in the Egyptian market, with all
* According to the Egyptian Ministry of IT and Telecom, February 2008
Mobinil 2007 Annual Report 47
providers serving a total of 8.6 millionusers*.
In addition, different voice and dataproviders have developed and enhan-ced their services by offering VAS, themost popular of which include InteractiveVoice Response systems (IVR), Ring BackTones, e-Billing, and e-Payment.
Thus, the Egyptian market witnessednoticeable progress in the telecommu-nications industry over the past few years.
ß Vodafone Egypt was the second en-trant to the mobile market followingMobinil and the second operator tolaunch the 3G services in 2007 afterEtisalat Egypt. In 2006, Vodafonechanged the structure of its owner-ship and acquired 51% of Raya Tele-com, which specializes in providingbusiness solutions as well as Internetconnectivity. The newly formed struc-ture is as follows:ß Vodafone International 54.9%ß Telecom Egypt 44.7%ß Free Float 0.4%
ß Duopoly in the mobile market endedin May 2007, when Etisalat started itsoperation using the 2G and 3G licensethat it acquired from the National Tele-communication Regulatory Authority(NTRA) for EGP 16.7 billion ($ 2.9 billion).Etisalat’s launch focused on thepersonal market both Post-paid andPre-paid. Etisalat Misr consortiumrepresents a joint partnership structuredas follows:ß Etisalat UAE 66%ß Egypt Post 20%ß National Bank of Egypt 10%ß Commercial International Bank 4%
ß A monopoly on fixed lines remains withTelecom Egypt as the sole provider,which is still a public entity despite itspartial liberalization at the end of2005. However, the monopoly expe-rienced by Telecom Egypt on inter-national gateway had reached anend, when Etisalat acquired thesecond international gateway license.Currently, discussions and an initial frame-work are being set up for a secondfixed line operator license which isexpected to be operational in 2009.
48 Mobinil 2007 Annual Report
The Regulatory Environment
The NTRA [National Telecom RegulatoryAuthority] is the entity specialized in regu-lating the telecommunications sector inEgypt, while keeping with latest techno-logies and satisfying users' needs with themost suitable prices.
NTRA ensures that this is achieved withinan atmosphere of free and impartialcompetition so as to encourage nationaland international investment in the tele-communications sector.
The NTRA guarantees that all servicesrendered to customers comply with thekey principles of the TelecommunicationsLaw no (10) for the year 2003, which are:
ß Publicity of informationß Protection of free competitionß Protection of users’ rightsß Provision of universal services by ensuring
that all citizens have access to basictelecom services at affordable prices
Regulatory Highlights in 2007
1-Main Agreements Concludedß National Roaming – with Etisalat, the
third mobile operator in Egypt. Mobinilwill charge reasonable, yet profitablerates when Etisalat customers sendor receive communications in areaswhere their operator does not providecoverage.ß Interconnect Agreement – also with
Etisalat, and similar to other operators;allowing exchange of traffic betweenboth operators.ß 3G License Acquisition – Mobinil will
be entitled to 10 MHz of additionalband in 3G range, enabling thecompany to offer its customers thelatest technologies as well asaccommodating the expectedsubscriber growth for years to come.
2-Commercial Achievementsß Settling all NTRA financial claims.ß Approvals for 36 new products and
offers.ß Acquiring a new – 10 million dials –
network code, in addition to havingseven new dial ranges in the existing018 Network Dial Code [NDC].ß Frame agreements for site installations
and sales outlets with National PostOffice Authority.ß Several sales related agreements with
Telecom Egypt.
Mobinil 2007 Annual Report 49
* See coverage map on page 58
The most remote regions arenow connected, and all socio-economic classes in Egypt areserved.
Developing the Egyptian Market
50 Mobinil 2007 Annual Report
The Egyptian Company for Mobile Ser-vices (ECMS) - Mobinil continues to leadthe mobile telecommunications industryin Egypt, following the thrive to fulfill oneof its key reasons for existence, which isensuring that every resident in Egypt canobtain a mobile line. Accordingly, thenumber of Mobinil subscribers increasedto over 15 million, with 5.85 million addi-tions, representing an increase of 63%over the same period last year.
The rapid growth in the market in the lastfew years is attributed to ECMS’ strategicdecisions in aggressive market expansion,observing the value dimension, whichwere soon emulated by the competition.
ECMS has revolutionized and influencedtelecommunications in Egypt. The net-work capacity has expanded through900 and 1800 MHz frequencies. Thenetwork coverage has also significantlyimproved with the continuous investmentin building more base stations (BTS), resultingin a total coverage increase reaching 99.7%of total populated areas *.
The most remote regions are now con-nected, and all socio-economic classesin Egypt are served. Hence, the markethas not only developed and grown, butwas in fact transformed through softeningentry barriers, providing new ValueAdded Services (VAS), diversifying tariffplans to suit all needs and budgets, andmore importantly, making a real differ-ence in people’s daily lives.
Since the commencement of its ope-rations, ECMS has maintained leader-ship of the Egyptian telecommunicationsmarket. As of December 31, 2007, ECMS’market share reached a leading shareof 49.5% in a competitively aggressivemarket with three powerful players.
ECMS was able to maintain its marketleadership by dedicated and focusedattention on strategic goals to increasesubscribers’ loyalty through:
ß Competitive, segmented offers andpromotions tailored to meet the needsof different subscribers’ profiles, bothconsumer and corporate.ß Development of innovative service
offerings to include bouquets andbundles of different mobile services tosatisfy customers’ various needs.ß Constant expansion and enhance-
ment of network quality and coverage.ß Upgrading and diversifying customer
contact points.
ECMS’ sincere dedication to offer worldclass services to all Egyptians has beena major driving force to invest more thanEGP 5 billion into (3G) services in 2007.
ECMS continues to offer a large array ofdiversified services to the Egyptian mobileuser using different technologies. Servicesoffered range from local voice connec-tivity to international data roaming onGPRS networks to 2.5G technology andsoon to 3.75G.
An ongoing interactive study of customerneeds and behavior over the years hasallowed ECMS to develop and fulfill thewants and needs of the truly diversifiedEgyptian customer base. This is donethrough the features offered and theways in which they are offered, both tocorporate and to personal customers
Mobinil 2007 Annual Report 51
2007 Overview
52 Mobinil 2007 Annual Report
In 2007, and in keeping with our strategyin the Egyptian market over the years,Mobinil managed to accomplish severalachievements on the market front, main-taining its leadership in Egypt followingthe entrance of a third mobile operatorin May 2007.
2007 witnessed several unique marketpropositions on all fronts and for allconsumers in the various market seg-ments whether Pre-paid, Post-paid or Busi-ness, in addition to a range of Value Ad-ded Services and several offers andpromotions.
In light of the new competitive environ-ment in 2007, Mobinil ventured in severalinitiatives that continued to provide thebest value for money, to create moretailored solutions, and to meet the realneeds of the Egyptian consumer.
2007 represents a year of new andinnovative market offerings for the Pre-paid market, a year of special propo-sitions for the Post-paid market, and ayear of creative solutions for the Businessmarket, in addition to a wider range ofValue Added Services for consumers atlarge.
Consumer Market
ALO (Pre-paid)Pre-paid consumers continue to form thevast majority of mobile users in Egypt. In2007, Mobinil capitalized on this fact byfocusing on introducing propositions thatoffer them more value for money.Mobinil’s Pre-paid customers enjoyed anunprecedented number of bundles(handset + Pre-paid line) at a variety ofreasonable prices, offers, and promotionsthat coincided with social occasionsthroughout the year, in addition to theability of being charged per second.
The most outstanding proposition wasthe introduction of lifetime validity for thefirst time in Egypt, enabling Pre-paid usersto enjoy unlimited validity as long as theymade only one minute of outgoing calls
every three months. This initiative createda stir in the Egyptian market leading tocompetition later following suit.
The introduction of services like “AhsanNas”, where Pre-paid users can selectup to three frequently-called numbersand call them at a lower rate, was alsoa proposition that set Mobinil apart fromthe competition. Such propositionsenabled Mobinil to build on the loyaltyof existing customers and enhance theircustomer experience. Also, as part ofour keen efforts to serve the communitythrough our products and services,Mobinil partnered with the Ministry ofAdministrative Development to introducethe “Thanaweya Amma” project, whichplaced a Pre-paid line and a very uniqueoffer in the hands of almost half a millionEgyptian high school graduates.
Other initiatives included the removal ofsales tax on all scratch cards and e-Recharge options, a true and tangiblebenefit to the customer. A wider rangeof e-Recharge denominations was alsointroduced in 2007, starting from as littleas EGP 1 and reaching up to EGP 500.
Primo, an innovative yearly subscriptionline that offers the benefit of controlledcustomer spending coupled with lowminute rates, also continued to providea desired option for consumers through-out 2007, meeting the needs of thosewho want the benefits of Post-paid linescoupled with the ease and control ofPre-paid. Building on the success of thisline, Mobinil introduced an extensive re-pricing scheme leading to the availabilityof 1, 2 and 4 year lines at even more rea-sonable prices and renewal options.
Star (Post-paid)Following a successful re-branding ofMobinil’s Post-paid brand into “Star”, thebrand became synonymous with highvalue, tailored pricing structure, andtangible benefits that the consumer cantruly enjoy.
Mobinil 2007 Annual Report 53
2007 marked the introduction of the fullrange of “Star” buckets; which are pricingplans that offer the Post-paid consumerFREE inclusive minutes, SMS, MMS, andGPRS usage in exchange for a setmonthly fee. It is up to the consumer toselect the plan that best meets his/herusage pattern and lifestyle.
Star customers also enjoyed an expan-sion in the range of rewards offered aspart of the “Star Awards” loyalty andretention program, offering them moretangible gifts that they can redeem withtheir accumulated points.
Because Star customers are keen onhandsets, Mobinil offered them theopportunity to acquire high-end hand-sets at great discounts through specialvouchers and special promotions on arange of high quality devices. In orderto meet the demand for Star, Mobinilmade Star lines and Star bucketsavailable at Points of Sale as opposedto being only available at Mobinilcustomer centers.
Business Market
Mobinil BusinessThe Business consumer also received awide range of pricing plans, corporatesolutions, and services in 2007. Mobinilintroduced seven different Businessbuckets that offer the business marketgreater flexibility according to theirvarying communication budgets.
Mobinil Business consumers enjoyed moreconvenience through the expansion ofpayment collection options, the abilityto separate their business and personalcalls with ease through budget masterenhancement and split billing, and theoption of getting the latest range ofbusiness handsets at the best marketprices.
The introduction of the Blackberry® Pearlwas a major highlight in 2007, followedby the corporate e-mail solutions, whichenable users to have their e-mail in the
palm of their hands anytime, anywhere.Business consumers were also treated toservices like “Mini Business”, whichenables them to create a group of upto five users within their organization andcall each other at a lower minute rate.
Mobinil also provided a range of sevenhigh-end business handsets to theBusiness market in order to provideBusiness consumers with communicationtools that can positively enhance theirday-to-day lives.
Mobinil 8000Mobinil 8000 continues to be the leadingdirectory assistance service in Egypt,expanding its services even furtherthrough a wide range of features thatmeet customers’ needs and exceed theirexpectations. Mobinil 8000 offers every-thing from street directions, to cinematicket bookings, to restaurant reserva-tions, as well as prices of cars and mobilesand much more.
Mobinil LifeMobinil Life, a bouquet of informationsources offered through a WAP portalfor GPRS users, also continues to becomean integral part of the consumer’s com-munication experience. Year after year,Mobinil Life expands the range of itsfeatures in order to bring closer a wealthof knowledge and information to theconsumer. Mobinil Life now offers 3Dgames, music shop, dictionary andthesaurus, news, schedules for events, inaddition to Facebook, Google, andYahoo.
Because the needs of the Egyptianconsumer are ever changing, MobinilLife now also offers mobile TV, whereconsumers can catch their favorite TVprograms, music video, and news ontheir mobile screens on demand througha number of television and radio stations.
Mobinil Global Rate dividesthe world into five zones,each with a defined flat rate.
54 Mobinil 2007 Annual Report
International Roaming2007 was the year when Mobinil furtherelaborated on its “Global Rates”, offeringcustomers reliable roaming service for aflat rate. Global Rates were also exten-ded to Pre-paid customers in order forthem to take advantage of this valuableproposition. Mobinil Global Rate dividesthe world into five zones, each with adefined flat rate. Roaming is no longerdreaded by customers, since they headto their destinations knowing exactly howmuch the service will cost them whileabroad.
Value Added ServicesEvery year witnesses a considerableexpansion in the range of Value AddedServices offered to the Egyptian con-sumer, and 2007 was no exception.Mobinil introduced new services andenhanced several of its existing servicesto offer a new level of convenience tocustomers.
The major highlight of 2007, in terms ofValue Added Services, was the introduc-tion of Mobinil WiFi (wireless fidelity)offering free high speed local area
network to Internet users in Egypt througha wide network of over 200 hotspotsthroughout Cairo, Alexandria, Hurghada,El Gouna, and Sharm El Sheikh, includingprominent hotels and cafés.
In 2007, Mobinil also introduced theemergency SIM card, which enablescustomers to back up their contacts onanother SIM card, and use it whennecessary.
In terms of enhancement, Mobinil increa-sed capacity to accommodate for thehuge demand on its Ring Back Toneservice “Call Tone”, a service whereindividuals calling Mobinil customers canenjoy an alternative Ring Back Tone froma song or a play instead of the standardtone. New features were also added toits voice SMS service, and Mobinil offeredmore features in its Mobilist, a uniqueservice that allows customers to utilizemany services by clicking a few simplecodes even when they are out of credit,including recharging a line, recharginganother line, sending an SMS askinganother customer to call you... etc.
Mobinil now proudly serves15 million customers througha network operated by over3000 highly dedicated andwell trained employees,proud to call Mobinil theirhome.
Mobinil 2007 Annual Report 55
Getting Bigger and BetterMobinil’s coverage was strong and stablethroughout 2007, giving consumers thechance to communicate anytime any-where. Mobinil also acquired its 3Glicense in 2007, putting it on equal footingwith other competitors in the market andenabling it to offer more high-endservices as well as expanding its capacityto take on more subscribers. Mobinil nowproudly serves 15 million customersthrough a network operated by over3000 highly dedicated and well trainedemployees, proud to call Mobinil theirhome.
Mobinil is proud to close 2007 with 348international roaming partners, up from298 partners in 2006, and offer inter-national roaming in 135 countries, upfrom 120 in 2006.
Mobinil continues to offer its 15 millionsubscribers services 24 hours a day, 7days a week through its state-of-the-artcall center. It now serves its customersthrough 33 shops, many of which arealready boasting a new contemporaryshop concept that truly reflects the
identity of Mobinil; friendly, dynamic,humane, simple, and seeking excellence.Mobinil now also offers services to theEgyptian market through 15,915 Pointsof Sale, in addition to alternative andcreative sales channels, like 46 kioskslocated in subway stations (29 kiosks),ports (3 kiosks), and universities (14 kiosks),to bring its services even closer to theconsumer.
56 Mobinil 2007 Annual Report
Market Leadership
Mobinil 2007 Annual Report 57
Egyptian Bazaar
Sinai
Alexandria
Marsa Matrouh
Tanta
Port Said
Siwa Oasis
Red Sea
Cairo
Luxor
Menya
Assiut
El Kharga Oasis
Bani Sweif
Aswan
Ismailia
Sharm El Sheikh
DamanhourTanta
Shibin El Kom
Giza
Fayoum
Sohag Quena
Hurghada
Safaga
Al Quseir
Marsa Alam
LakeNasser
Network Coverage
Mediterranean Sea
MansouraArish
Suez
Tor Sinai
Covered Population99.05%99.66%0.61%
2006
2007
% increased
Area Covered17.45%22.15%27%
2006
2007
% increased
Damietta
Banha
Kafr El Sheikh
El SaloumRafah
Taba
El Dakhla Oasis
Abu Sembel
58 Mobinil 2007 Annual Report
Coverage 2007
• Mobinil provides exclusive coverage to major oil fieldsin Egypt
• Mobinil provides exclusive coverage to agricultural farms in remote areas
• Mobinil’s coverage extends to reach 22.15 % of Egypt’s surface area (Up from 17.45% in 2006)
• Mobinil covers 99.66% of the Egyptian population(Up from 99.05 % in 2006)
• Mobinil added 765 sites during 2007 Total sites in 2007: 3335
Total sites in 2006: 2570
• Mobinil has added 855 Km to its covered roads and highways
Facts and Figures
Number of Sites2,5703,33529.77%
2006
2007
% increased
Mobinil 2007 Annual Report 59
2007 Advertising Campaigns
January
1-Post-paidStar BucketsMobinil customers can choose from se-veral plans that include free minutes,SMS, MMS, and MB for browsing.
2-Pre-paidRe-pricing of AlohatMobinil modified minute rate for Alohat aswell as offering:• Calls are charged per second• Minimum call charge of EGP 0.20 on all
calls remains unchanged• Monthly fee of EGP 5 remains unchanged
3-VASEmergency SIM card and copierIn case of loss or damage to the currentSIM card, the emergency SIM card couldreplace it. SIM copier allows customers tocopy data from one SIM to another. Entirepack is offered for EGP 45.
February
4-All Mobinil CustomersValentine’s Day “Pay the first minute”On Februrary 14th and 15th, all Mobinil cus-tomers are charged for only the firstminute no matter how long the call lasts(applicable on all calls from Mobinil to anymobile).
5-Pre-paidALO and Nokia Valentine’s Day offerExclusive offer on ALO line + Nokia 1110ifor only EGP 260 instead of EGP 320.
6-Pre-paidLaunch of “Lifetime Validity”All Pre-paid customers can enjoy ongoingvalidity for their lines provided they makeone charged call within three months.
7-BusinessLaunch of Business BucketsBusiness customers can choose fromseven plans 100, 250, 500, 1000, 1500, 2000,and 4000, each with a number of freeminutes, SMS, MMS, and MB for browsing.
8-VASLaunch of short number 16110Short number to the Mobinil personal mar-ket call center is launched to replace thelong fixed number.
1 2 3 4
5 6 7 8
60 Mobinil 2007 Annual Report
9-VASCelebrate Valentine’s Day with Mobinil8000Customers can make restaurant reser-vations at a selection of high-end rest-aurants and cinemas through 8000.
March
10-Post-paidMother’s day Primo bundlesExclusive to Mobinil customers:• Nokia 1110i + Primo 1 year line with Ring
warranty for the price of EGP 399 in-stead of EGP 625
• Samsung X160 + Primo 1 year line withConnect warranty for the price of EGP599 instead of EGP 855
11-All Mobinil CustomersNew Mobinil scratch cardsNew scratch cards clearly marked toindicate inclusion of sales tax. Deno-minations are: EGP 10, 25, 50, and 100.
12-VASMobile [email protected] personal and business customerswho have LINKdotNET e-mail accountscan access their mail from their mobilesand enjoy free mobile e-mail service freeof monthly subscription for a limited time.
13-VASCelebrate Mother’s day with Mobinil 8000Exclusive discounts atwww.megamartmobinil8000.com bycalling Mobinil 8000 to order gifts and sendgifts for free + two free cinema tickets.
14-RoamingMobinil Global Rate extended to Pre-paidcustomersAll Pre-paid customers can enjoy MobinilGlobal Rates in Bahrain, Belgium, France,Germany, Greece, Hungary, India, Italy,Netherlands, Poland, KSA, Spain, Switzer-land, Tunisia, Turkey, UAE and UK.
April
15-Post-paidSiemens Primo bundleExclusive bundle including:• Siemens A75 + 1 year Primo line• Price is EGP 599 (tax inclusive)
16-Pre-paidLaunch of Motorola new bundleNew bundle with Motorola C139 + ALOline for the price of EGP 199.
9 10 11 12
13 14 15 16
Mobinil 2007 Annual Report 61
17-BusinessLaunch of corporate cash collection serviceCorporate accounts can pay their mon-thly bills in cash to be collected fromtheir premise on a monthly basis.
May
18-Post-paid“Free handset program” loyalty initiativesExclusive offer for select Post-paid customersto choose from six high-end handsets:• Nokia N73• Nokia E65• HTC VOX (HTC 710)• Samsung D900• Motorola KRAZR• Sony Ericsson W880i
19-Pre-paidALO Magic bundleNew bundle with Nokia 1600 + ALO Magicline for the price of EGP 329. Bundle offers
a monthly bonus of EGP 10 for one year toall new customers.
20-Pre-paidAlohat stronger and betterLaunch of weekend tariff allowing cus-tomers to talk to any mobile on Fridaysand Saturdays for only EGP 0.20 perminute during off peak hours and week-nights from 1 a.m. to 8 a.m.
June
21-Post-paidStar Awards extended to more Star highvalue customers 34,000 new high value Star customersincluded in the loyalty program in additionto existing 25,000. Subscribers accumulatepoints and redeem them for a wide rangeof gifts.
22-Post-paidPrimo yearly subscription reviewedPrimo pricing campaign as follows:• 1 year : EGP 210 and 400 inclusive minutes• 2 years: EGP 350 and 800 inclusive minutes• 4 years: EGP 555 and 1200 inclusive minutes
23-Pre-paidLaunch of 4 new ALO bundlesFour new bundles with ALO lines. Choicebetween:• Alcatel E100 + ALO line for EGP 199• Motorola C123 + ALO line for EGP 199• Sagem My100X + ALO line for EGP 179• Bird S198 + ALO line for EGP 169
24-BusinessNew mobile e-mail solutionJoint promotion with HTC handsets to pro-mote push e-mail technology, bundledwith a high-end, modern handset as wellas other benefits from LINKdotNET.
17 18 19 20
21 22 23 24
62 Mobinil 2007 Annual Report
25-Corporate CommunicationNetwork coverage campaignEnjoy the best network coverage with theleading mobile operator in Egypt.
July
26-All Mobinil CustomersLaunch of Ahsan NasAhsan Nas service allows customers tochoose 3 preferred numbers to call at adiscounted minute rate. Service isavailable for all ALO, Star, Business andPrimo customers for a monthly subscriptionof EGP 3 (free for the first month only).
27-Pre-paid“Class 2007 line” high school graduatesofferIn collaboration with the Ministry ofAdministrative Development, a specialoffer for all high school graduates withtheir e-registration service. The line offers:
• Alohat tariff with all its benefits• Free Alohat monthly subscription for 1 year• Free 100 SMS per month for 1 year
28-BusinessLaunch of BlackBerry® PearlLaunch of the BlackBerry® Pearl for aspecial price of EGP 2,999.
29-VASLaunch of Mobinil WiFiIntroducing free high speed Internetaccess in more than 200 hotspots in majorcafés and hotels nationwide and at Cairoairport.
30-VASMobinil WiFi competitionMobinil launches the WiFi 50-day com-petition accessible to anyone visiting theMobinil website from Mobinil hotspots toanswer daily questions for a chance to wina Nokia E65 handset.
August
31-Pre-paidBuy an ALO line and get Hakim’s latestalbum for freeAny customer buying a new ALO line getsa free Hakim tape exclusively availablewith ALO lines.
32-Pre-paidAhsan Nas summer promotionAll customers subscribed to Ahsan Nascan call their three chosen numbers forfree everyday from 2:00 a.m. to 8:00 a.m.during the promotion period.
25 26 27 28
29 30 31 32
Mobinil 2007 Annual Report 63
33-BusinessLaunch of Mini BusinessMini Business enables customers to formgroups of up to five users within the sameorganization and make unlimited calls toeach other for free. Monthly subscriptionamount depends on the number of usersin the group. Calls outside the groups arecharged normally.
34-RoamingNew Mobinil roaming global ratesMore elaboration on the global rates wherecustomers pay fixed flat rates according tothe zone of the destination country.
35-RoamingMobinil launches Omra promotionFrom August 31 to October 10, all eligibleoutbound roamers to Saudi Arabia canactivate roaming service for free. EGP 25credit is granted to all customers roamingin Saudi Arabia during Ramadan.
October
36-Post-paidCelebrating Mobinil customers’ birthdaysMobinil Star customers receive a greetingpack including a card and a designer keychain on their birthdays.
37-BusinessFree handset for Mobinil BusinesscustomersHigh-value Business customers are offereda choice from seven high end businesshandsets at a 50% discount and is refun-ded to them on equal monthly discountsoff their invoice over 12 months.
38-BusinessNew Mobinil TV campaign – Angah NasA new concept TV teaser campaignhighlighting three propositions:• Business Annual
• Closed User Group (CUG)• Split Billing
39-VASExclusive on Mobinil LifeThe popular Ramadan song “El Tareek ElSah” by Mahmoud El Esseily was exclu-sively available and promoted on MobinilLife.
40-RoamingLaunch of exclusive roaming promotionduring HajjAll Mobinil customers roaming in SaudiArabia during Hajj season will enjoy oneoutgoing minute free for every fiveminutes of outgoing calls they make toEgypt.
33 34 35 36
37 38 39 40
64 Mobinil 2007 Annual Report
November
41-Post-paidExclusive handset offer with new Star linesStar customers can choose from fiveselect handsets with new Star lines at a50% discount off the market price re-deemed to them in equal monthly dis-counts on their bills over 12 months.
42-BusinessMobinil Business AnnualBusiness customers can buy or migrate tothe new Business Annual profile allowingthem to pay all their monthly subscriptiononce every year or two years or threeyears. Calls can be charged using re-charge cards or via a monthly billing.
43-BusinessCUG promotionClosed User Group promotion offers busi-ness customers in the same company the
cheapest minute rate at only EGP 0.20and a monthly subscription fee of EGP 5.
44-BusinessNow split billing for Business customersBusiness customers can separate personaland business calls by dialing 1010 beforeinitiating personal calls and it will bededucted from the recharge value.Business calls are charged in monthlybilling.
45-VASCall ToneCustomers can activate their Ring BackTone service by calling 9999 and selectingthe tone of their choice.
46-All Mobinil CustomersMobinil Music AwardsFor the first time in Egypt, Mobinil hostedan exclusive event celebrating MobinilMusic Awards 2007 featuring live perform-
ances by Nancy Agram, Tamer Hosny,and Mahmoud El Esseily along with theawards ceremony in various categoriesbased on customer votes.
December
47-All Mobinil CustomersThe more you talk, the less you payFor all Mobinil to Mobinil calls, first minuteof the call is charged at full rate, secondminute at 50% off, and any extra minuteat 75% off for a limited time.
48-VASCelebrate Eid El Adha with Mobinil 8000promotionAll Mobinil customers making cinema re-servations through Mobinil 8000 get freepopcorn or soft drink on every ticket booked.
41 42 43 44
45 46 47 48
Mobinil 2007 Annual Report 65
City StarsAddress: Omar Ebn El KhattabStreet
Dandy MallAddress: Carrefour Mall, Cairo-Alexandria Road
HaramAddress: 363 El Haram Road,Akhnaton Mall
HeliopolisAddress: 110 El Merghany Street
Hyper OneAddress: 6th October City, HyperOne Mall
MaadiAddress: 49 El Laselky Street
MessahaAddress: 16 El Messaha Square
MohandessinAddress: 39 Shehab Street
Nasr CityAddress: 80 Abbas El Akkad Street
Nile CityAddress: Nile City, North Tower
ZamalekAddress: 6b Brazil Street
Alexandria RoushdyAddress: 21B Syria Street
Alexandria San StefanoAddress: San Stefano Mall
Alexandria SmouhaAddress: 14th of May Road
AswanAddress: 97 Cornich El Nil
DamanhourAddress: 18 Gomhoureya Street
DamiettaAddress: 173 Cornich El Nil, ElRefaee Sons Building
HurghadaAddress: Sheraton El ArousaSquare/Pin Code
MahallaAddress: 13 Shokry El Kawatly Street
MansouraAddress: Gomhoureya Street - nextto Moamen restaurant - infront ofMansoura University main gate
MarinaAddress: 14 A Champs-Elysées,behind Zahran Market
Porto MarinaAddress: 64 Porto Marina, gate 4
Port SaidAddress: 16 El Gomhoureya Street
Sharm El Sheikh Mercato MallAddress: El Mercato Mall, HadabetOm El Seed
Sharm El Sheikh Neama BayAddress: Mina Mall Neama Bay, ElAmir Center
SuezAddress: 1 El Galaa Street
TantaAddress: 59 Saied Moatassem Street
Ring AssiutAddress: 4 El Gomhoureya Street -next to Ideal Standard
Ring El MerghanyAddress: 70 El Merghany Street
Ring IsmailiaAddress: 26 El Thawra Street
Ring ShoubraAddress: 28 Shoubra Street - besideShoubra Tunnel
Carrefour AlexandriaAddress: Carrefour Alexandria Mall
Cairo Regions Mobinil Ring
Customer Centers
66 Mobinil 2007 Annual Report
16%
84%
Customer Centers before 2007
Customer Centers added during 2007
SIS: Shop-Shop (Ring)
POS: Point of Sales
Before 2007 Added during 2007 Total during 2007
5
0
0
23
5
4
Customer Centers
Shop-in-Shop
CustomerCenters in POS
Total 5 32
18
5
4
27
2007 Growth
Mobinil 2007 Annual Report 67
Up until the late 1990s, Egypt lay on thewrong side of the world digital divide,lagging even behind other countries inthe region. Fixed line penetration waslow. Service quality was poor. The internetand mobile phones were non-existent.Over the last decade and a half, thesituation has been radically transformed.Egypt is well on the way to becoming aregional telecommunications hub -aided by government action, marketliberalization, foreign and local invest-ment, and consumer adoption.
The mobile telecommunications revolu-tion in particular has been spectacular,accompanied by fundamental changesin the way we communicate in ourpersonal and business lives. Mobinil hasplayed a crucial role in this transfor-mation. During 2007, Mobinil was the firstoperator to hit both the 10 million and15 million subscriber marks, adding nearly5 million subscribers over the course ofthe year, and easily maintaining itsperennial market share leadership.
By the end of 2007, there were over 30mill ion mobile subscribers sharedbetween the three operators, a growthrate of 73% in 2007, compared to a 24%growth rate in 2006. While this growthhas been aided by the entry of a new,third operator, the driver has beenMobinil’s commitment to reaching outto all Egyptians by focusing on accessi-bility and affordability.
Mobinil has a specific vision of andcommitment to the development ofmobile telecommunications in Egypt. Thisvision includes creating and sustaininga unique Mobinil community of users,who enjoy the most competitive ratesand the best services. Elements of ourvision include:
ß Implementing and continuing to refinea dual market strategy to meet thedifferent needs and desires of both our
high-end customers and our massmarket baseß Offering state-of-the-art products,
services, solutions, and applications tomeet the specific needs of differentcustomer segments, including youth,families, high net worth individuals, large and small companies, etc.ß Continuing rational investment in our
network to provide the technologiesand services suited to the Egyptiancontext at the highest levels of quality(including, but not limited to 3G ser-vices, mobile TV, mobile advertising,m-wallet and convergent services, ... etc.)
In the coming years, we will continue tofocus on:
ß maintaining our market share leadership and protecting value shareß improving our efficiency and productivity
measurablyß focusing on creating value for both
customers and shareholdersß providing the best and most suitable
technologies and services to our subscribersß reducing subscriber churn and improving
retentionß expanding the mobile user community
creativelyß reaching out to wider segments of
society by tailoring products that areaccessible, affordable, and relevantß building on our strong brand equity
and our uniquely Egyptian identityß capitalizing on our large subscriber
base to provide the most competitiveprices and charges for our mobilecommunity
Perception is strong andsight weak. In strategy, it isimportant to see distantthings as if they were closeand to take a distancedview of close things.Miyamoto Musashi1584-1645, legendaryJapanese swordsman
Roadmap
68 Mobinil 2007 Annual Report
Mobinil 2007 Annual Report 69
70 Mobinil 2007 Annual Report
Financial Statements & Analysis
Mobinil 2007 Annual Report 71
I assumed responsibility as VP, Finance and CFO on January 1st,2007. It has been a challenging and very successful year for thecompany. In spite of the introduction of a third player in the market,Mobinil has achieved excellent growth, while maintaining marketshare leadership.
As evident in the financial section of the report, Mobinil has increasedshareholder value over 2006. Our subscriber base grew by 63%over 2006, leading to a 29% revenue growth and more important33% service revenue growth; this gives a CAGR of 22%. Our EBITDAgrew by 15% giving a CAGR of 18%. Our EBITDA margin has droppedto 45.10% from 50.5% reflecting the cost of the growth.
These results and our strong financial position have enabled us tocontinue to give high returns to our shareholders, while not impactingour investment in growth. We have been successful in obtainingour financing needs from the local market. We look forward toanother successful year of growth for the company in the marketwhile increasing shareholder value.
Sincerely,Khalid Ellaicy
From the CFO
72 Mobinil 2007 Annual Report
Mobinil 2007 Annual Report 73
Consolidated Balance Sheetas at December 31, 2007
Vice President, Finance Chief Executive Officer ChairmanKhalid Ellaicy Iskander Shalaby Naguib Sawiris
Auditors' report "Attached" Ernst & Young KPMG Hazem Hassan Allied for Accounting & Auditing
The accompanying notes form an integral part of these financial statements and are to be read therewith .
Note 31/12/2007 31/12/2006No. EGP EGP
Long Term AssetsFixed assets (net) (2d,3) 6 060 309 327 4 036 599 529Assets under construction (5) 1 565 688 675 1 123 627 154Licenses fees (net) (2f,4,22) 1 071 684 252 1 241 298 740Investments available for sale (2g,6) 900 000 900 000Rent deposits 7 659 414 5 208 754Total long term assets 8 706 241 668 6 407 634 177Current AssetsInventory (2h,7) 116 094 437 55 229 993Accounts receivable (8) 263 694 071 232 412 695Other debit balances (9) 426 706 420 316 697 030Pre-paid expenses 125 798 450 82 460 383Cash at banks and on hand (10) 414 916 423 281 524 098Total current assets 1 347 209 801 968 324 199Current LiabilitiesProvisions (11) 547 392 769 492 098 417Banks facilities (12) 369 468 443 152 812 627Short term loans (16a) 327 200 000 -Creditors (13) 1 270 776 150 1 052 786 371Other credit balances (14) 1 296 018 340 1 075 300 662Dividends payable 41 505 439 86 789 779Accrued expenses 632 093 666 382 515 765Bonds (17) - 340 000 000Total current liabilities 4 484 454 807 3 582 303 621Excess of current liabilities over current assets (3 137 245 006) (2 613 979 422)Net Investments 5 568 996 662 3 793 654 755Financed as follows:EquityPaid up capital (18) 1 000 000 000 1 000 000 000Treasury shares (25) (26 556 368) (18 959 534)Reserve (gains from Treasury Shares) 50 913 839 50 913 839Legal reserve 200 000 000 200 000 000Equity settled share based payments (2m,25) 30 623 410 -Retained earnings 47 706 759 36 292 189Net profit for the year (equity holders of the Company) 1 823 784 804 1 525 889 998Interim distribution (1 374 900 307) (1 163 614 309)Total equity attributable to equity holders of the Company 1 751 572 137 1 630 522 183Minority Interest 3 706 674 2 092 100Total equity 1 755 278 811 1 632 614 283Long Term Liabilitieslong term creditors-License fees (28) 144 511 030 269 133 659Long term loan (2L,16b) 3 432 799 705 1 775 575 704Deferred tax liabilities (2k,20) 236 407 116 116 331 109Total long term liabilities 3 813 717 851 2 161 040 472Total equity & long term liabilities 5 568 996 662 3 793 654 755
The Egyptian Company for Mobile Services and Subsidaries (S.A.E.)
74 Mobinil 2007 Annual Report
The accompanying notes form an integral part of these financial statements and are to be read therewith .
Consolidated Income Statement for the Financial YearEnded December 31, 2007
Note Financial year Financial yearNo. ended 31/12/2007 ended 31/12/2006
EGP EGP
Operating Revenue (2e) 8 200 479 770 6 362 100 725Expenses & cost of operationCost of services (excluding depreciation & amortization ) (1 655 775 692) (1 208 350 529)Other operating cost (1 032 074 606) (686 050 477)Depreciation & amortization (1 285 873 077) (1 113 934 326)Selling, general and administrative expenses (1 649 760 143) (1 093 128 052)Remuneration, allowances and salaries of board members (3 653 518) (3 184 287)Impairment losses of accounts receivable (47 284 809) (45 583 738)Provisions (11) (144 130 824) (110 191 727)Total operating costs (5 818 552 669) (4 260 423 136)Net operating profit 2 381 927 101 2 101 677 589
Add/(Less):Interest income 29 556 921 34 738 444Other income 3 210 015 -Interest expense (123 994 426) (165 927 885)Capital gain / (loss) 2 550 924 (1 462 807)Net foreign currencies exchange differences (2c) (3 365 054) (4 841 621)Provisions no longer required 31 887 694 -Net profit for the year before income tax 2 321 773 175 1 964 183 720Current tax (2k) (376 297 790) (381 051 542)Deferred tax (2k,20) (120 076 007) (55 896 634)Income tax (19) (496 373 797) (436 948 176)Net profit for the year 1 825 399 378 1 527 235 544Attributable to:Equity holders of the Company 1 823 784 804 1 525 889 998Minority interest 1 614 574 1 345 546Net profit for the year 1 825 399 378 1 527 235 544Earnings per share (21) 16.96 14.11
The Egyptian Company for Mobile Services and Subsidaries (S.A.E.)
Mobinil 2007 Annual Report 75
Consolidated Cash Flows Statement for the Financial YearEnded December 31, 2007
Note Financial year Financial yearNo. ended 31/12/2007 ended 31/12/2006
EGP EGPCash flows from operating activitiesNet profit for the year before income tax 2 320 158 601 1 962 838 174Adjustments to reconcile net profit to cash flows fromoperating activitiesDepreciation & amortization 1 285 873 077 1 113 934 326Net change in provisions (11) 55 294 352 102 940 032Write-off of accounts receivable (44 083 093) (47 669 381)Impairment losses of accounts receivable 47 284 809 45 583 738Write-down of inventory 1 257 276 1 508 734Interest income (29 556 921) (34 738 444)Interest expense 123 994 426 165 927 885Capital gain / (loss) (2 550 924) 1 462 807Equity settled share based payments transactions 30 623 410 -Changes in working capitalRent deposits (2 450 660) (437 475)Inventory (62 121 720) (14 001 615)Accounts receivable (34 483 092) (53 757 844)Other debit balances (109 357 497) (121 627 883)Pre-paid expenses (43 338 067) (13 398 221)Creditors 20 148 603 246 300 395Other credit balances 194 148 421 92 937 728Accrued expenses 202 211 176 (42 221 114)Interest paid (305 504 785) (259 790 914)Income tax paid (338 379 755) (283 772 472)Net cash provided from operating activities 3 309 167 637 2 862 018 456Cash flows from investing activitiesPayments for the purchase of fixed assets (30) (2 805 641 056) (1 959 494 256)and assets under constructionPayments for licenses (478 000 000) (160 000 000)Proceeds from sale of fixed assets 2 769 989 2 292 405and fixed assets under constructionInterest received 28 467 965 34 706 272Net cash used in investing activities (3 252 403 102) (2 082 495 579)Cash flows from financing activitiesProceeds from loans 2 677 000 000 789 800 000Payments of loans (700 000 000) (408 491 962)Payment of bonds (340 000 000) -Proceeds from sale of treasury shares - 73 674 550Payments for the purchase of treasury shares (7 596 834) -Dividends paid (1 771 045 766) (1 501 263 800)Minority interest 1 614 574 1 345 546Net cash used in financing activities ( 140 028 026) (1 044 935 666)Net changes in cash and cash equivalents (83 263 491) (265 412 789)Cash and cash equivalents at beginning of the year 128 711 471 394 124 260Cash and cash equivalents at end of the year (10) 45 447 980 128 711 471
The accompanying notes form an integral part of these financial statements and are to be read therewith .
The Egyptian Company for Mobile Services and Subsidaries (S.A.E.)
76 Mobinil 2007 Annual Report
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Mobinil 2007 Annual Report 77
Notes to the Consolidated Financial Statementsfor the Financial Year Ended December 31, 2007
1- Company Background
• The Egyptian Company for Mobile Services S.A.E. is an Egyptian Joint Stock Company, established under the InvestmentIncentives and Guarantees Law No. 8 of 1997 and was registered in the Commercial Registry under No. 312032on 4/3/1998 which was later modified to No. 2231 on 14/1/1999. The purpose of the company is to execute, manage,operate, develop and maintain a digital cellular mobile telecommunication system (G.S.M). The company providesits services to subscribers inside and outside Egypt.
• The company's duration is 25 years starting from the date of registration in the commercial registry.• The company started its operation on May 21, 1998.
2- Significant Accounting Policies
a) Basis of financial statements preparation
The consolidated financial statements are prepared in accordance with Egyptian Accounting Standards (E.A.S)and related Egyptian laws and regulations.
b) Basis of Consolidation
The accompanying consolidated financial statements include the assets, liabilities and results of operation of thecompany (Egyptian Company for Mobile Services) and its subsidiaries (thereafter referred to as “the Group”) whichare controlled by the company. The basis of the consolidation are as follows:
• All intra-group balances and transactions have been eliminated.• Minority interest in the equity and results of operation of the subsidiaries controlled by the company is shown as
a separate item in the consolidated financial statements and is calculated based on their share in the assets andliabilities of the subsidiaries.
• There was no goodwill arising from the acquisition of the subsidiaries as the company is the founder of the subsidiaries.
As at December 31, 2007, the company directly owns the following consolidated subsidiaries: Ownership
* Mobinil Services (Egyptian Joint Stock Company) 96%* Mobinil Invest (Belgian Company) 98%** Employees share option plan (Trust) Controlled
* Mobinil Telecom the principal shareholder of the company owns 2% in Mobinil Invest and Mobinil Services.** The Trust established for the employees share option plan of the company.
c) Foreign Currency Translation
The group maintains its books of accounts in Egyptian Pounds. Transactions denominated in foreign currencies arerecorded at the prevailing exchange rates at the date of transactions, while balances of monetary assets and liabilitiesdenominated in foreign currencies at the consolidated balance sheet date are retranslated at the prevailing exchangerates at that date. Exchange differences are recorded in the income statement.
d) Fixed Assets and Depreciation
• Fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses.The assets are depreciated using the straight-line method over the estimated useful lives of each type of assets.
• During the financial year ended December 31, 2007 the company conducted an operational efficiency reviewof its fixed assets (network equipment), which resulted in changes in the expected useful lives of certain items.The carrying amounts of network equipments categories that their useful lives have been changed are depreciatedover the remaining period of the new useful lives.
• The estimated useful lives are as follows:
Buildings 50 yearsNetwork equipments 5-15 yearsComputers 2-5 yearsOffice equipments 5 yearsFurniture & fixtures 10 yearsVehicles 5 yearsLeasehold improvements 5 years
The Egyptian Company for Mobile Services and Subsidaries (S.A.E.)
78 Mobinil 2007 Annual Report
e) Revenue Recognition
In general revenue is recognized when services are rendered or products are delivered.Revenue recognition for major revenue streams are as follows:1- Airtime, SMS and other value added services are recognized when services are rendered.
• For Post-paid subscribers, revenue is recorded based on billed services, and an accrual is recorded for servicesrendered and unbilled at period end date.
• For Pre-paid subscribers, initial sale of scratch cards is recorded as deferred revenue, revenue is recorded basedon usage of Airtime and other services.
2- Interconnect and roaming revenue is recognized based on the terms and conditions agreed with other operatorsand when services are rendered and billed. Accruals are also recorded for unbilled revenue resulting from servicesrendered until the period end date.
3- Handsets revenue is recognized upon delivery.4- Connection fees are recognized based on activation.
f) Licenses Fees
The existing licenses fees are accounted for as follows:a- The license fee is recorded at cost and amortized over the period of license.b- The fee to access the 7.5 MHz of the 1 800 MHz spectrum is recorded at the cash price using its net present value
and amortized over the period of the access agreement.
g) Investments Available for Sale
Investments available for sale are generally stated at fair value (except investments in unquoted equity securities),with any resultant gain or loss being recognized directly in equity, except for impairment losses. When these investmentsare derecognized, the cumulative gain or loss previously recognized in equity is recognized in income statement.Investments in unquoted equity securities are stated at cost less impairment losses (2j).
h) Inventory
Inventory is valued at the lower of cost and net realizable value. Cost is determined using the weighted averagemethod.
i) Capitalization of Borrowing Cost
The company capitalizes the borrowing costs related to the acquisition or establishment of an eligible asset.
j) Impairment
• The carrying amounts of the company’s assets - other than (inventory 2h) and (deferred tax assets 2k) - are reviewedat each balance sheet date to determine whether there is any indication of impairment. If any such indicationexists, the asset’s recoverable amount is estimated.
• An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceedsits recoverable amount. Impairment losses are recognized in the income statement.
• An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carryingamount that would have been determined, net of depreciation or amortization, if no impairment loss had beenrecognized.
k) Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognized in theincome statement except to the extent that it relates to items recognized directly in equity, in which case it isrecognized in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantiallyenacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between thecarrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.The amount of deferred tax provided is measured using tax rates enacted or substantively enacted at the balancesheet date.
Mobinil 2007 Annual Report 79
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be availableagainst which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probablethat the related tax benefit will be realized.
l) Loans and Borrowings
Interest-bearing borrowings are recognized initially at fair value less attributable transaction costs. Subsequent to initialrecognition, interest-bearing borrowings are stated at amortized cost with any difference between cost and redemptionvalue being recognized in the income statement over the period of the borrowings on an effective interest basis.
m) Share Based Payments
The Company has equity settled share based compensation plan. Equity settled share based payments are measuredat fair value determined at the grant of the equity settled share based payments. The fair value of the share basedpayment is charged over the vesting period based on the company’s estimate of awards that will eventually vest.
n) Operating Lease
Lease payments under operating lease are charged to the income statement on a straight-line basis over the periodof the lease, commencing the date of the lease.
o) Cash Flows Statement
Cash flows statement is prepared using the indirect method.
80 Mobinil 2007 Annual Report
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Mobinil 2007 Annual Report 81
Capitalized Borrowing Costs
The company capitalized EGP 172 070 811 in fixed assets during the financial year ended December 31, 2007.(EGP 82 534 735 during 2006).
The average borrowing rate for the company which is used to capitalize interest is10.177 % during the financial yearended December 31, 2007. (11.235 % during 2006).
Change of Estimate
The change of useful lives of certain network equipments categories has resulted in a decrease of the depreciationcharge with the amount of EGP 103 million.
4- Licenses Fees (net)
License Fees to access the Total licensesfee 7.5 MHz of the 1800 fees
MHz spectrumEGP EGP EGP
Cost as at 1/1/2007 1 755 000 000 643 101 265 2 398 101 265Less:Accumulated amortization as at 1/1/2007 1 007 395 161 149 407 364 1 156 802 525Amortization for the year 101 818 340 67 796 148 169 614 488Accumulated amortization as at 31/12/2007 1 109 213 501 217 203 512 1 326 417 013Balance as at 31/12/2007 645 786 499 425 897 753 1 071 684 252Balance as at 31/12/2006 747 604 839 493 693 901 1 241 298 740
5- Assets under Construction
This item includes network equipments, letters of credit, advance payments related to licenses and fixed assets andthe capitalized borrowing cost directly related to the acquisition of these fixed assets amounting to EGP 84 477 923(EGP 61 004 767 during 2006) as stated in note (2-i, 30).
6- Investments Available for Sale
This item represents the cost of investment in The Egyptian French Company for Finance Lease (percentage shareholding14.17%).
7- Inventory
Inventory is represented in Post-paid and Pre-paid SIMs and scratch cards in addition to other cell phone sets andtelecommunication equipments.
8- Accounts Receivable
31/12/2007 31/12/2006EGP EGP
Post-paid receivables 169 671 549 172 118 372Roaming receivables 48 551 077 52 217 030National roaming receivables 25 887 073 -Installment receivables 18 366 237 6 962 355Other receivables 1 218 135 1 114 938
263 694 071 232 412 695
82 Mobinil 2007 Annual Report
9- Other Debit Balances
31/12/2007 31/12/2006EGP EGP
Suppliers - advance payments 31 699 769 11 868 057Deposits with others 1 116 865 3 802 419Accrued revenues 262 393 518 226 735 720Mobinil For Telecommunication 305 035 -Others 131 191 233 74 290 834
426 706 420 316 697 030
10- Cash at Banks and on Hand
31/12/2007 31/12/2006EGP EGP
a- Cash on hand 3 000 136 508b- Cash at banks Current accounts 413 788 014 197 615 728
Cheques under collection 924 739 55 451 431Time deposits 200 670 28 320 431
414 916 423 281 524 098
Cash and Cash Equivalent
31/12/2007 31/12/2006EGP EGP
Cash at banks 414 916 423 281 524 098Less:Bank facilities (369 468 443) (152 812 627)
45 447 980 128 711 471
11- Provisions
Description Balance as at Formed Provision no Used Balance as at1/1/2007 longer required 31/12/2007
EGP EGP EGP EGP EGPProvisions 492 098 417 144 130 824 (31 887 694) (56 948 778) 547 392 769
Bank Facility Currency Contract Interest Balance usedamount duration as at
EGP 31/12/2007
Banque Misr 25 000 000 EGP One year starting 9.75% including highest over 131 827 986from 14/10/2007 drawn balance commission
Credit Agricole 110 000 000 EGP One year starting 9.75% including highest over 55 793 299Bank from 30/5/2007 drawn balance commissionNational Societe 60 000 000 EGP 8 months starting 9.75% including highest over 54 898 666General Bank from 1/9/2007 drawn balance commissionHSBC 85 000 000 EGP One year starting 9.75% including highest over 78 738 929
from 16/5/2007 drawn balance commissionBNB Paribas 50 000 000 EGP One year starting 9.75% including highest over 48 209 563
from 31/7/2007 drawn balance commission369 468 443
12- Banks facilities
Mobinil 2007 Annual Report 83
13- Creditors
15- Related Party Transactions
Transactions with related parties during the year were similar to non related entities on an arm’s length basis.These transactions are represented in buying network equipments, providing technical and accounting assistancefor network operation and maintenance, network equipments construction activities, supplying computers to thecompany providing advertising campaigns, paying and collecting the roaming revenues on behalf of related parties.
The following is a summary of the related parties, the type and amount of transactions with the company and theiroutstanding balances at the end of the year.
31/12/2007 31/12/2006EGP EGP
Fixed assets suppliers 674 118 418 485 630 986Trade suppliers * 496 719 915 497 959 345Creditors - Roaming 1 982 413 1 396 615Orange Group 25 454 684 22 328 867Orascom Telecom companies 69 827 085 42 176 502Others 2 673 635 3 294 056
1 270 776 150 1 052 786 371
* Trade suppliers include EGP 158 364 972 representing the short term part of the amortized cost for license feesinstallments to access the 7.5 MHz of the 1 800 MHz spectrum (Note 28).
14- Other Credit Balances31/12/2007 31/12/2006
EGP EGPTaxes and Stamps 351 260 641 180 047 718Deposits from customers 40 842 995 40 154 117Deferred revenue 496 368 887 446 301 510Interest payable on bonds - 10 383 972Income tax 371 976 386 381 846 412Others 35 569 431 16 566 933
1 296 018 340 1 075 300 662
Total transactions duringthe financial year ended
Description Transaction type 31/12/2007 31/12/2006EGP EGP
Orascom Telecom companies Management fees / Roaming collection 610 214 765 487 976 476Rest of Orascom Group All abovementioned transactions 330 170 557 281 478 434Orange Group Management fees / Technical assistance 108 761 752 84 895 991Nile City Investment Rent 4 109 666 6 527 670Mobinil For Telecommunication Payments on behalf of the company 305 035 12 539
Description Balance type 31/12/2007 31/12/2006EGP EGP
Orascom Telecom companies Creditors / Other debit balances / Fixed assets 60 195 552 27 167 830under construction - advance payments
Rest of Orascom Group Suppliers-advance payments /Fixed assets 71 200 27 855 825under construction - advance payments
Orange Group Creditors / Accounts receivable 25 385 737 22 181 229Nile City Investment Suppliers-advance payments 115 000 115 000Mobinil For Telecommunication Other debit balances 305 035 12 539
The outstanding balances as at 31/12/2007 are as follows:
84 Mobinil 2007 Annual Report
The nature of the relationships is as follows:
• Mobinil For TelecommunicationDirect shareholder with 51.03 % in the company.
• Orascom TelecomDirect shareholder with 20 % and holds 28.75 % in Mobinil For Telecommunication the principal shareholder in thecompany.
• OrangePrincipal shareholder with 71.25 % in Mobinil For Telecommunication the principal shareholder in the company.
• France TelecomThe principal shareholder in Orange.
• Orascom GroupSister companies to Orascom Telecom as some of its shareholders are members of the board of directors of thecompany.
• Nile City InvestmentSister company as some of its shareholders are members of the board of directors of the company.
16 -Loans
The company was granted loans to finance its capital expenditure and working capital. The terms of the loans are summarized as follows.
Loan agreements conducted in 2005
On April 17, 2005, an agreement with a group of local banks was signed to underwrite an amount ofEGP 1 800 million as a medium term loan and/or bonds for a period of 8 years which will be used within 2 years. Thefinal payment is due on April 30, 2013. The loan is divided into 4 tranches and will be paid over 11 semi-annualinstallments. The first installment will be due upon the end of the grace period that expires on April 30, 2008.The tranches of the loan are as follows:
Tranch Type of Finance Million EGP
First Medium Term Loan 800Second Medium Term Loan 400Third Medium Term Loan 300Fourth Medium Term Loan 300
The interest and the payment method for the Medium Term Loan is summarized as follows:
Interest Interest on 50% of each facility tranch will be fixed at 11.5% for the first 5 years and11.75% for the next 3 years.Interest on the remaining 50% in each facility will be calculated based on a margin of 1.4%over the Central Bank of Egypt prevailing discount rate which is 2 business days prior to theinterest period.In October 2007 the company agreed with the banks to amend the interest rate startingfrom October 31, 2007 to be calculated based on the following elements:• CBE Discount Rate (CDR)• The company’s time deposit return rate• CBE Mid Corridor rate
Interest payment Interest is paid every six months starting from the date of the first withdrawal and is due onApril 30 and October 30 every year.
Payment of Installments A semi-annual installment that starts after the grace period and due on April 30 andOctober 30 every year.
Mobinil 2007 Annual Report 85
Loan agreements conducted in 2007
• On March 19, 2007, an agreement with a local bank was signed to underwrite an amount of EGP 450 million as abridge loan for a period of 6 months that shall be used for financing the capital expenditures needed to expandthe network as well as the short term financial requirements. On May 8, 2007, the local bank agreed to increasethe bridge loan by EGP 250 million to be EGP 700 million. This loan has been fully settled during August 2007.
• On August 15, 2007, an agreement with a group of local banks was signed to underwrite revolving credit facilityup to and not exceeding EGP 2.3 billion for 7 years. The final maturity date will be the last day of the 84th monthfrom the date of signing the facility agreement.
The main terms of the loan agreement are as follows:
Repayment of the facility • 20 % of the facility (EGP 460 million) at the end of fifth year• 30 % of the facility (EGP 690 million) at the end of sixth year• 50 % of the facility (EGP 1150 million) at the end of seventh year
Interest The interest rate shall be calculated based on following elements :• CBE Discount Rate (CDR)• The company’s time deposit return rate• CBE Mid Corridor rate
Interest payment Interest is paid every 6 months
The classification of the loans balances according to the years of repayment is as follows:
a- Short term loans
Year Currency Amount2008 Current portion of long term loan EGP 327 200 000
b- Long term loan
Year Currency Amount2009 / 2014 EGP 3 432 799 705
17- Bonds
According to the Company’s Extraordinary General Assembly approval dated February 21, 1999,3.4 million bonds, with an amount of EGP 340 million, were issued. The bonds prospectus specifies the following:
Type of issuance: Par value bonds (first issuance) with a fixed interest rate, marketable but non-convertibleinto shares.
Interest rate: 12.25% fixed annual interest rate due every six months.
Purpose of issuance: Financing company's expansions and the investments required to increase the company'snetwork capabilities.
Issuance price: 100% of bonds par value, which amounts to EGP 100 each.
Payment: The bonds will be repaid in one installment at the final maturity date of the bonds(October 1, 2007). The issuer has the right to repay the bonds before their final maturitydate.
- These bonds have been fully repaid during 2007.
18- Capital
The company's authorized share capital amounts to EGP 1500 million divided into 150 million shares with a nominalvalue EGP 10 each. The company's issued and fully paid up capital amounts to EGP 1000 million. On October12,2003, the company’s Extraordinary General Assembly approved the increase of the authorized capital to EGP 3 000million. This increase was recorded in the commercial registry on February 23, 2004.
86 Mobinil 2007 Annual Report
19- Reconciliation of Effective Tax Rate
31/12/2007 31/12/2006EGP EGP
Net profit for the year before income tax 2 321 773 175 1 964 183 720Income tax using the domestic corporation tax rate 20% 464 354 635 20% 392 836 744Non- deductible expenses 31 953 754 47 392 671Tax exemption - (2 972 704)Effect of tax rate in Mobinil Invest 65 408 (308 535)
21.38% 496 373 797 22.25% 436 948 176
Unrecognized Deferred Tax Assets
Deferred tax assets have not been recognized in respect of the following item:
20- Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities31/12/2007 31/12/2006 31/12/2007 31/12/2006
EGP EGP EGP EGPProperty, plant and equipment 3 775 501 - 213 798 533 102 391 756Intangible assets - - 33 281 705 19 242 578Provisions 6 897 621 5 303 225 - -Total deferred tax asset / liability 10 673 122 5 303 225 247 080 238 121 634 334Net deferred tax liabilities 236 407 116 116 331 109
31/12/2007 31/12/2006EGP EGP
Deductible temporary differences 8 144 301 7 569 655
Deferred tax assets have not been recognized in respect of this item because of the uncertainty associated with therecoverability of this deferred tax asset.
21- Earnings per Share
Financial year Financial year ended ended
31/12/2007 31/12/2006Net profit for the year attributable to equity holders of the company 1 823 784 804 1 525 889 998Less:Employees dividends (137 222 222) (122 236 058)Board of directors remuneration (2 887 500) (3 850 000)
1 683 675 082 1 399 803 940Weighted average number of shares 99 248 797 99 238 556Earnings per share * 16.96 ** 14.11
* Earnings per share were calculated after deducting the employees’ share and board of directors’ remuneration forthe first nine months of the financial year only after being approved by the general assembly meetings.
** Earnings per share were calculated after deducting the employees’ share and board of directors’ remuneration forthe financial year ended December 31, 2006 according to the ordinary general assembly resolutions on August 27,December 13, 2006 and March 11, 2007.
Mobinil 2007 Annual Report 87
22- License Agreement
• A license agreement was signed between the company and National Telecommunication Regulatory Authority.This agreement gives the company the right to establish and operate a digital cellular mobile telephone networkin Egypt, for a duration of 15 years starting from May 21, 1998 subject to renewal. The company paid EGP1755million as a license fee for this agreement for the 15 years period. In addition, the company is liable to pay annualfees to the National Telecommunication Regulatory Authority.
• See note 28 and 29 for details of the license agreement of the 7.5 MHz of the 1800 MHz spectrum.• On October 17, 2007, the company has signed an agreement with National Telecommunication Regulatory
Authority (NTRA) to acquire the 3G license, 10 MHz spectrum and extension of the old licenses for a new 15 yearsstarting from the date of signature against EGP 3 668 million and a charge of 2.4% of mobile revenue. An amountof EGP 318 million was paid in the date of signature and the remaining amount will be paid on installments untilthe end of December 2010. Accordingly, the company has revised the useful live of old licenses to be ended onOctober 2022 and this has resulted in a decrease of the amortization charge with the amount of EGP25 million.
23- Capital Commitments
Capital commitments represent the fixed assets and intangible assets contracts entered into and not yet executedat the balance sheet date which amounts to EGP 4 311 million as at December 31, 2007, (EGP 715 million as at December31, 2006).
24- Contingent Liabilities
Contingent liabilities amount to EGP 178 million as at December 31, 2007. These contingent liabilities represent theuncovered amounts of letters of guarantee issued for the benefit of third parties as at December 31, 2007. Thecompany is a party in a number of legal cases which resulted from carrying out its activities. Based on the legal adviceobtained, the company’s management believes that the outcome of these lawsuits - individually or in aggregate - would not be material to the group’s results.
25- Employees Share Plan (Treasury Stock)
The extraordinary general assembly meeting of the company held on March 11, 2007, approved the establishmentof the employee share plan (ESP) as per the corporate law by granting the employees free shares of the company.This plan will be applied to the company’s employees, managers and executive members of the company’s boardthat qualified according to certain conditions regarding their performance, position, years of experience at thecompany and anticipated accomplishments. The company’s Board of Directors approved the allocation of 409 000shares owned by Mobinil Invest in the company in order to proceed with the employee share plan. Furthermore, theextraordinary general assembly meeting of the company held on September 3, 2007 approved the increase ofallocated shares to 450 000 shares by purchasing from the stock market.
The plan can be summarized as follows:
1- The plan’s beneficiaries will be granted free shares that will be allocated over a number of years. Furthermore,supervising committee will nominate the beneficiaries, according to the plan’s criteria, the number and dates ofgranted shares.
2- During the vesting period the ESP’s shares will be in the custody of the trustee. Thus, the beneficial employee hasno right to attend or vote in the company’s ordinary & extraordinary general assembly meetings. Hence, thebeneficial employee can not exercise his rights till the date of transferring shares’ ownership. However, the beneficialemployee will have the right of profit distributed on his allocated shares from the granting date.The granted shares according to the plan are as following:
SharesAllocated shares at the beginning of the plan 409 000Granted during the year (417 000)Purchased & allocated shares to the plan 41 000Available shares as at 31/12/2007 33 000
88 Mobinil 2007 Annual Report
3- According to the plan the currently allocated 417000 shares will be transferred to employees on the following dates:
SharesDecember 31, 2007 126 375December 31, 2008 139 000December 31, 2009 139 000December 31, 2010 12 625
• Due to certain legal procedures with governmental authorities the execution of the first wave was delayed to January3, 2008.
• The income statement has been charged with EGP 30 623 410 representing the employee share plan expenses forthe financial year ended December 31, 2007.
26- Financial Instruments and Management of Related Risks
The financial instruments of the company are represented in the financial assets, (cash at banks and on hand, accountsreceivable, some of the accounts in debtors and other debit balances), the financial liabilities (loans, banks facilities,bonds, some of the suppliers balances, some of the accounts in creditors and other credit balances).
a- Credit Risk
This risk is represented in the inability of customers to pay their debts. The group retains deposits from them and maysuspend services for delinquent customers.
b- Foreign Currencies Exchange Risk
The foreign currencies risk is represented in the fluctuations in exchange rates, which in turn affect the company’scash inflows and outflows as well as the value of its foreign currency assets and liabilities. As at the date of the balancesheet the company has foreign currency assets and liabilities equivalent to EGP 75 292 366 and EGP 509 403 576respectively. The company’s net exposure in foreign currencies is as follows:
ShortU.S Dollars 30 179 206Euro 33 026 240GBP 92 760
As disclosed in note (2-c) the company has used the prevailing exchange rates at the balance sheet date toretranslate monetary assets and liabilities.
c- Interest Rate Risk
The interest rate risk is represented in the fluctuations in the interest rates which in turn affects the related monetaryassets and liabilities.
d- Fair Value
Based on the valuation basis used for the group's assets and liabilities described earlier, the fair value of the financialinstruments does not materially differ from the book value as at the balance sheet date.
27- Tax Status
• The Egyptian Company for Mobile Services
a- Corporate Tax
The company was exempted from corporate tax for a period of 5 years ended 31/12/2003.• From inception until 2002
Based on a tax inspection, a corporate tax forms no. (19) was received and the dispute was settled withoutany differences according to the internal committee decision.
Mobinil 2007 Annual Report 89
• Years 2003 and 2004These years have been inspected and the company has not yet been informed by the results.
• Years 2005 and 2006These years have not yet been inspected
b- Payroll Tax
• From inception until 2000A tax inspection was performed for this period and the resulting differences were paid according to theresolution of the appealing committee except certain items which were transferred to the appealing.
• Years 2001 and 2002A tax inspection was performed for these years and resulted in differences which are currently being discussedat the internal committee.
• Years 2003 and 2004These years have been inspected and settled with tax authority.
• Years 2005 and 2006These years have not yet been inspected.
c- Stamp Tax
• From inception until 2001A tax inspection was performed and disputes were settled in the internal committee and differences werepaid except for tax on Alo connection fees and in-kind tax which were transferred to the preliminary courtbut not yet resolved.
• Years 2002 and 2003Based on a tax inspection, a stamp tax form no. (3) was received and most of disputes were settled in theinternal committee except for tax on Alo connection fees and in-kind tax and the dispute was transferred tothe appealing committee.
• From January 1, 2004 until July 31, 2006This period has been inspected and the company has not yet been informed by the results.
• There is a dispute on the unpaid stamp tax for prizes that have been distributed during the period from 2000 to 2006, settlement with the concerned tax authority is currently in process.
d- Sales Tax
• From inception until 2004This period has been inspected and differences were paid.
• Years 2005 and 2006These years have not yet been inspected.
e- Withholding Tax
• From inception until 2003• A tax inspection was performed and the company received a preliminary claim from the central collection
department.The resulting disputes are currently being discussed with the responsible tax department in the tax authority.
• There is a dispute regarding withholding taxes enforced on the rent payments, settlement with the concernedtax authority is in process.
• Years 2004 to 2006These years have not yet been inspected.
• Mobinil Services (a subsidiary)
a- Corporate Tax
• From inception until 2003Tax inspection was performed and a corporate tax form no. (19) was received and the dispute is currentlybeing discussed at the internal committee.
• Years 2004 to 2006The Company has not been inspected by the Tax authority.
90 Mobinil 2007 Annual Report
b- Stamp Tax
• From inception until August 31, 2002This period has been inspected and settled with tax authority.
• From September 1, 2002 until July 31, 2005This period has been inspected and the dispute was settled according to the internal committee decision.
• From August 1, 2005 until December 31, 2006The company has not been inspected by the Tax Authority.
c- Sales Tax
• From July 1, 2001 until December 31, 2002The company was subject to sales tax laws during the second and third stage of implementation of sales taxlaws.Therefore, the company is obligated to collect sales tax and transfer it to the responsible tax departmentstarting from July 1, 2001, the first day of implementing second and third stage of sales tax laws.A tax inspection was performed for these periods and sales tax form no. (15) was received and disputes weresettled.
• Years 2003 and 2004These periods had been inspected and settled with Tax Authority.
• Year 2005This year has not yet been inspected.
d- Withholding Tax
• From inception until 2002The company was inspected and settled with the Tax Authority.
• Years 2003 to 2006The company has not yet been inspected by the Tax Authority.
• Mobinil Invest - Belgium Company - (a subsidiary)Subject to Belgium laws. The financial periods since inception till the given date have not yet been inspected.
28- Long Term Creditors - License Fees
This item is represented in the amortized cost of the license fees installments to access the 7.5 MHZ of the 1800 MHZ spectrum.The classification of the license fees balance according to the years of repayment is as follows:
Short term Long termDuring the year During the year Total
2008 2009EGP EGP EGP
Liability balance 160 000 000 160 000 000 320 000 000Less:Unamortized discount 1 635 028 15 488 970 17 123 998Balance as at 31/12/2007 158 364 972 144 511 030 302 876 002
The income statement has been charged with EGP 35 498 711, the amortized discount from the principal liability oflicense fees based on the imputed interest rate for the financial year ended December 31, 2007.
29- Agreement with Telecom Egypt
The company signed an agreement with both Vodafone Egypt and Telecom Egypt. Based on this agreement, thecompany and Vodafone Egypt have committed to make total payments of EGP 1 240 million each over 4 Periods tothe National Telecommunication Regulatory Authority (NTRA)
Accordingly, each company was granted access to 7.5 MHz of the 1800 MHz spectrum that will be supplied by TelecomEgypt, which surrendered its 1800 MHz GSM license.
Mobinil 2007 Annual Report 91
In addition, various changes to the commercial terms between the companies and NTRA have been agreed with theobjective of a broader development of the entire telecommunication industry in Egypt
On January 27, 2005, the appendices related to the above mentioned agreement were signed which includes thefollowing:• Amendments of the interconnection agreement between the company and Telecom Egypt.• Special settlement agreement of the method of calculation for international calls between the company and
Telecom Egypt.• Telecom Egypt hereby unconditionally and irrevocably undertakes not to establish, operate or provide, whether
directly or indirectly, fully mobile cellular telephony services in Egypt up to November 30, 2007. This restriction doesnot limit Telecom Egypt from providing any services currently supplied by Telecom Egypt and any form of thirdgeneration. However, Telecom Egypt may continue to be engaged in the field of mobile telephony business in Egyptthrough its acquisition of shareholding in the incumbent Egyptian mobile operators whether directly or indirectly.
• Special settlement agreement of microwave unit fees between the company and the NTRA.• Telecom Egypt waived its right to obtain telecommunication license from the NTRA up to November 30, 2007.• License agreement between the company and NTRA through allocation GSM frequency of 1800 MHZ.
30- Payments for the Purchases of Fixed Assets and Assets under Construction
For the purpose of the preparation of the cash flows statement, the fixed assets additions and net movement of assetsunder construction are reconciled to the cash outflow resulting from these transactions as follows:
Description EGPFixed assets additions during the year 2 967 679 579Net movement of assets under construction excluding payments for licenses 124 061 521Non cash reconciliations Interest capitalized during the year on assets under construction (84 477 923)Fixed assets and assets under construction suppliers (202 586 923)Sales tax on fixed assets 964 802Payments for the purchase of fixed assets and assets under construction 2 805 641 056
31- Comparative figures
Some of the comparative figures in the consolidated financial statements have been reclassified to be consistent withthe classification of the consolidated financial statements as at December 31, 2007.
92 Mobinil 2007 Annual Report
Market Outlook:
Mobinil is the leading mobile operator in the Egyptian market enjoying around 50% market share in a market that ischaracterized by a relatively low penetration rate (~41%) by the end of 2007, compared to countries with similar GDP/Capitaand other countries in the region.
This, in addition to Egypt’s demographic distribution of 60% of the population located in regional areas versus 40% in suburbanareas with relatively lower penetration rate than the country’s average penetration rate, and a very young populationwhere the number of people under 25 years of age is approximately 60% of the total population, which represents a solidfoundation for future growth.
However, income disparities and rising inflation rates remain major obstacles in the face of future growth, which mandatesadopting a dual market strategy to address both niche and mass markets.
Mobinil adopted this strategy starting with the first growth phase 2005 - 2006 to lead the growth in the Egyptian market. In2007, along with the entrance of the thrid mobile operator, Mobinil followed the same strategy in its second growth phaseto secure about 50% of the markets’ net additions, allowing for high subscriber growth by adding almost 6 million subscribersin one year, representing 63% YoY growth, in a year that witnessed crossing both the 10 and 15 million subscribers milestones.
Operational Performance:
RevenueGlobal Revenue increased by 29% YoY, yet Service Revenues outperformed the global performance, as it increased by33% YoY. Roaming Revenues have flattened out at EGP 497 million to represent 6% of global revenue, down from 7.8% in2006.
Connection fees have declined by 17% YoY in spite of the +63% increase in subscribers base as the company records thenet market price of the lines sold.
Data Revenues have increased to 4.2% of Global Revenue, up from 3.8% in 2006. Yet Data Revenue contribution to totalrevenues is relatively small.
UsageUsage volume has significantly increased starting with the second growth phase (2007) as network minutes reached 19.3billion minutes, up from 10.7 billion in 2006, representing 80% growth over 2006, which accordingly has pushed the globalAverage Usage Per User (AUPU) to 132 minutes per month (+11%) in spite of the 63% increase in subscriber base. Yet, anddue to the significant difference between both Post-paid and Pre-paid market behaviors, segmented analysis better reflectsmarket developments as global KPIs do not tell the full story.
Pre-paid subscribers, who are becoming the pre-dominant profile, have witnessed 43% increase in AUPU, reflecting +1elasticity with regards to effective price per minute drop during the year, unlike during the first growth phase where nosignificant price elasticity was realized.
Post-paid, which, might appear to be a diminishing profile, as it reached 3.6% of total base, has also witnessed increase inAUPU by 13% with similar +1 elasticity with regards to effective price per minute drop. Yet the continuous decline in thePost/Pre-paid EPPM has triggered internal migration waves that peaked in 2007 as the price differentiator diminished to EGP0.05 /minute, down from EGP 1.2 /minute early in 2005.
ARPUPre-paid ARPU has stabilized in 2007 at EGP 38 per subscriber per month, same as 2006.
Post-paid ARPU has increased to EGP 289 per subscriber per month, up 4.6% from 2006 as a result of the continuous usagestimulation efforts.
Gross Profit MarginGross Profit has increased by 27% YoY, representing a margin of 80%, with a slight decline from 81% in 2006. This can beattributed to increased outgoing traffic at a decreased per minute rate with relatively flat interconnection rate.
Management Discussion & Analysis
Mobinil 2007 Annual Report 93
EBITDAEBITDA has increased by 15% YoY with a margin of 45.1% declining from 50.5% in 2006.
Operating expenses excluding depreciation & amortization have increased by 47% YoY, mainly driven by the increase inselling, general and administrative expenses by 51% as a result of the rapid increase in subscribers base of 63%. Otheroperating expenses (network & connectivity) have increased by 50% YoY as a result of the rapid increase in traffic by 80%.Both major operating expense categories have reflected efficiency with regards to their cost drivers.
Depreciation & AmortizationDepreciation charges have increased by 21.8% YoY as a result of the aggressive growth strategy that the company isundertaking. Gross fixed assets have increased by 29% in 2006 followed by an additional increase of 40% in 2007.
A change in the useful life of certain network components has resulted in a decrease of the depreciation charge with anamount of EGP103 million.
Net IncomeNet Income increased by 20% YoY, representing a margin of 22.2%, with a slight decline from 24% in 2006 as a result of theincreased cost of growth on the EBITDA level.
Financial LeverageNet Debt increased to EGP 3.8 billion, representing an increase of 112% YoY as a result of acquiring a new long-term revolvingcredit facility with an amount of EGP 2.3 billion in 2007, from which the company has withdrawn EGP 2.0 billion by the endof 2007.
Net Debt to EBITDA was equivalent to 1.0 multiple, which indicates a relatively low leverage rate in companies undergoingsimilar growth rates that entail large capital investment decisions.
94 Mobinil 2007 Annual Report
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Mobinil 2007 Annual Report 95
•M
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lea
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2nd g
row
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se in
Eg
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co
m m
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lob
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GR
of 5
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se o
f gro
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05
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2007
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of t
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g 5
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ase
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Po
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96 Mobinil 2007 Annual Report
•R
eve
nu
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AG
R o
f 22%
, ye
t re
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0
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0
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0
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Reve
nue
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29%
10%
15%
20%
25%
30%
35%
Re
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3,21
6
3,70
0
2004
2005
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2007
0
500
1,00
0
1,50
0
2,00
0
2,50
0
3,00
0
3,50
0
4,00
0
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24%
17%
15%
49.3
%
51.4
%
50.5
%
45.1
%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
EBIT
DA
CA
GR
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EBID
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row
th
Mobinil 2007 Annual Report 97
•Se
rvic
e r
eve
nu
es
gro
wth
is
the
ma
in i
nd
ica
tor
of
sub
scrib
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ba
sere
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ge
ne
ratio
n.
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pro
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row
th r
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in 2
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refle
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gro
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Ne
t d
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t in
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d t
o E
GP
3.7
billi
on
as
a re
sult
of d
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CF
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re in
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.
3,92
9
4,72
0
5,58
4
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8
2004
2005
2006
2007
0
1,00
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2,00
0
3,00
0
4,00
0
5,00
0
6,00
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29%
20%
18%
5%10%
15%
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25%
30%
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Serv
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1,28
9
1,83
0
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3
2004
2005
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2007
0
500
1,00
0
1,50
0
2,00
0
2,50
0
3,00
0
3,50
0
4,00
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4
2004
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0
200
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1,00
0
1,20
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1,40
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0
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19%
27%
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22%
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98 Mobinil 2007 Annual Report
Inve
stin
g in
to t
he
Fu
ture
•St
art
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ob
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ee
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0
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0.38
2004
2005
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2007
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
657
692
801
554
500
550
600
650
700
750
800
850
900
15%
35%
32%
40%
2004
2005
2006
2007
0%5%10%
15%
20%
25%
30%
35%
40%
0.69
0.74
0.73
0.57
0.0
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0.4
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0.8
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)
Mobinil 2007 Annual Report 99
•M
ob
inil
ne
two
rk e
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ien
cy
pe
ake
d d
urin
g t
he
2n
d g
row
th p
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sa
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min
ute
s p
er
site
inc
rea
sed
by
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Y in
sp
ite o
f th
e v
ast
inc
rea
se in
site
s +
30%
.
6,65
0
8,21
210
,723
19,3
21
2004
2005
2006
2007
0
2,00
0
4,00
0
6,00
0
8,00
0
10,0
00
12,0
00
14,0
00
16,0
00
18,0
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20,0
00
3,43
53,
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4,17
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5,79
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01,00
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2,00
0
3,00
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4,00
0
5,00
0
6,00
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7,00
0
Glo
ba
l Use
d M
inu
tes
(M m
inu
tes)
Avg
min
ute
s/si
te(K
min
ute
s)
Cu
mm
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tive
Site
sSi
tes
Ad
diti
on
s
1,93
6
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2
2,57
0
3,33
5
2004
2005
2006
2007
0
500
1,00
0
1,50
0
2,00
0
2,50
0
3,00
0
3,50
0
100
296
338
765
0100
200
300
400
500
600
700
800
900
2,23
12,
889
3,63
3
6,71
3
4,41
95,
323
7,09
0
12,6
07
2004
2005
2006
2007
0
2,00
0
4,00
0
6,00
0
8,00
0
10, 0
00
12,0
00
14,0
00
66%
65%
66%
65.0
0
45%
50%
55%
60%
65%
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75%
Inc
om
ing
tra
ffic
(M
min
ute
s)O
utg
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g t
raff
ic (
M m
inu
tes)
Ou
tgo
ing
% o
f to
tal t
raff
ic
Inve
stin
g in
to t
he
Fu
ture
100 Mobinil 2007 Annual Report
Fin
an
cia
l Ra
tios
RO
CE
RO
AR
OE
58%
58%
55%
35%
55%
94%
94%
104%
2004
2005
2006
2007
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
15%
22%
21%
17%
8%10%
12%
14%
16%
18%
20%
22%
86%
86%
92%
92%
2004
2005
2006
2007
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
7.5
12.4
14.0
16.7
2468101214161820
DP
OD
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(EG
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Sha
re/P
rice
(EG
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(EG
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8.7
15.3
18.2
14.4
02468101214161820
128
200
181
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2004
2005
2006
2007
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2007
56789101112131415
8.7
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2468
101214161820
Mobinil 2007 Annual Report 101
14.4
8.7
Glossary
Third Generation (The next gene-
ration of wireless network techno-
logy). These networks deliver voice,
data, and multimedia content at
rates as high as 2 Mbps.
Average Revenue Per User. This is
the average monthly recurrent
revenue per customer excluding
vis itors roaming revenue and
connection fee; this includes airtime
revenue national and international,
as well as, monthly subscription fee,
SMS, GPRS and data revenue.
Average Usage Per User.
Compound Annual Growth Rate.
The year-over-year growth rate of
an investment over a specified pe-
riod of time.
Capital Expenditure. This is money
spent to acquire or upgrade physi-
cal assets such as buildings and
machinery. This tends to be a very
large expense for companies with
significant manufacturing facilities,
and usually much less of an expense
in the services sector. Also called
capital spending or capital expense.
Customer Relation Management
Earnings Before Interest, Taxes,
Depreciation, and Amortization.
An approximate measure of a
company's operating cash flow
based on data from the company's
income statement.
Enhanced Data rate for Global
Evolution. Sometimes known as
2.75G, it’s a development of GSM
which allows for the faster delivery
of advance mobile services such as
full multimedia messaging. EDGE
can be up to four times the speed
of GPRS.
3G
ARPU
AUPU
CAGR
CAPEX
CRM
EBITDA
EDGE
Days Payable Outstanding. A
company's average payable
period.
Dividend Per Share. A distribution of
a portion of a company's earnings,
decided by the board of directors,
to a class of its shareholders.
Earnings Per Share. The portion of
a company's profit allocated to
each outstanding share of common
stock.
Foreign Exchange Profit or Loss
Gross Domestic Product. The total
market value of all the goods and
services produced within the
borders of a nation during a
specified period.
General Packet Radio Service. A
packet-switched data technology
that is being primarily deployed for
GSM networks.
Global System for Mobile com-
munications. GSM is used all over
Europe, plus many countries in the
Middle East, Asia, Africa, South
America, Australia, and North
America. GSM's air interface is
based on narrowband TDMA
technology, where avai lable
frequency bands are divided into
time slots, with each user having
access to one time slot at regular
intervals.
International Financial Reporting
Standard(s)
Internet Service Providers
DPS
EPS
FRY
GDP
GPRS
GSM
IFRS
DPO
ISP
102 Mobinil 2007 Annual Report
IVR Interactive Voice Response. IVR is a
computerized system that allows a
person to select an option from a
voice menu and in doing so interact
with a computer system. Generally
the system plays pre-recorded voice
prompts to which the person presses
a number on a telephone keypad
to select the option chosen, or
speaks simple answers such as "yes",
"no", or numbers in answer to the
voice prompts.
Ministry of Communication and
Information Technology
Millions of Egyptian Pounds.
Multimedia Messaging Service. A
type of cellular message comprised
of a combination of text, sounds,
images and video. Typically, MMS
can only be used with 2.5G or higher
enabled phones.
National Telecom Regulatory
Authority
Average Per Person
Return on Assets. A useful indicator
of how profitable a company is
relative to its total assets. It also gives
an idea as to how well the company
is able to use their assets to generate
earnings.
Return on Capital Employed. A ratio
that indicates the efficiency and
profitability of a company's capital
investments.
Return on Equity. A measure of a
corporation's profitability.
A technology for getting sound or
pictures to your computer or cell
phone through the Internet or other-
wise as a continuous stream, so that
you can hear the sound or see the
pictures before all the information
has been received by your device.
MCIT
MEGP
MMS
NTRA
ROA
ROCE
Streaming
ROE
Voice over Internet Protocol. VoIP
allows people to use the Internet as
the transmission medium for tele-
phone calls by sending voice data
in packets using IP rather than by
traditional circuit transmissions. One
advantage of VoIP is that the tele-
phone calls over the Internet do not
incur a surcharge beyond what the
user is paying for Internet access.
Wireless Application Protocol. WAP
is standard or protocol for wireless
devices and the accompanying
infrastructure equipment. WAP
provides a standard way of linking
the Internet to mobile phones, PDAs,
and pagers/messaging units.
Wireless Fidelity. A term for certain
types of wireless local area networks
(WLAN…see below). WiFi has gained
acceptance in many environments
as an alternative to a wired LAN.
Many airports, hotels, and other
services offer public access to WiFi
networks so people can log onto
the Internet and receive e-mails on
the move. These locations are
known as hotspots.
Wireless Local Area Network; a short
range radio network normally
deployed in traffic hotspots such as
airport lounges, hotels and rest-
aurants. WLAN enables suitably
equipped users to access the fixed
network wirelessly, providing high
speed access (up to 11 Mbit/s down-
load) to distant servers.
Year over Year. A method of eva-
luating two or more measured
events that compares the results of
measurement at one time period
with those from another time period
(or series of time periods), on an
annualized basis.
VoIP
WAP
WiFi
WLAN
YoY
Per Capita
Mobinil 2007 Annual Report 103
Notes
Contact Details:
Investor RelationsTel. : +20 12 320-6178E-mail: [email protected] Media RelationsTel. : +20 12 320-6771E-mail: [email protected] Corporate ResponsibilityTel. : +20 12 320-6762E-mail: [email protected]
2007 Annual Report
The Egyptian Company for Mobile Services (Mobinil)
Nile City Building 2005C, Cornishe El-Nil, Ramlet Boulaq Cairo, Egypt - Postal Code: 11221
www.mobinil.com
Over 15 Million Egyptians Communicate from the Heart
Mo
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