Court rules against lower fees for Telecom Egypt

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CAIRO: A Cairo court overturned a regulatory ruling that had lowered the fee which Telecom Egypt must pay to connect fixed-line phone calls to mobile phones, the landline monopoly said on Monday.

The regulator ruled in September 2008 that the fee, known as an interconnection rate, should be lowered after Telecom Egypt complained that high rates were making it less competitive.

Mobinil, which leads Egypt’s mobile market by subscribers, had appealed against the ruling.

Telecom Egypt declined to comment further, while Mobinil was not immediately available to comment.

On Sunday, an administrative court ruled in favor of Mobinil, canceling the lower fee, the daily Al-Mal newspaper reported. The telecoms regulator would not take further action until it reviewed the details of the ruling, it added.

Analysts said the decision was unlikely to affect Mobinil’s profits because the firm has been recording its interconnection revenue and costs based on the old rates.

"This decision will have no impact on Mobinil’s financials, since the company has been using the old rates since September 2008," investment bank EFG-Hermes wrote in a research note.

Telecom Egypt may have to reverse the roughly LE 426 million ($75 million) in additional interconnection revenue it has recorded from Mobinil, the note said.

In September 2009 Mobinil filed an arbitration suit against Telecom Egypt, demanding that it stick to the old fees.

Vodafone’s Egypt unit, which has the second biggest share of the market, has also filed a suit against the telecoms regulator’s decision to lower the interconnection rates.


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By Reuters
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