orascom telecom holding giving the … the world a voice orascom telecom holding ye – 2009 p a g e...

GIVING THE WORLD A VOICE

Orascom Telecom Holding YE – 2009 P a g e | 1

ORASCOM TELECOM HOLDING

Third Quarter 2010


Orascom Telecom Holding YE – 2009 P a g e | 2

CONTENT

Highlights 3

CEO‟s Comment 4

Operational Performance 5

Main Financial Events 9

Financial Review 13

Financial Statements 19

Operational Overview 24


Orascom Telecom Holding Q3 – 2010 P a g e | 3

Orascom Telecom Holding Third Quarter 2010 Results

Cairo, November 7th, 2010: Orascom Telecom Holding (OTH) (Ticker: ORTE.CA, ORTEq.L,

ORAT EY, OTLD LI), announces its third quarter 2010 consolidated results.

Highlights

On July 13, 2010, the amended and restated shareholders‟ and settlement agreements

concluded with France Telecom entered into force (“ECMS Transaction”). Consequently,

starting Q3 2010, Mobinil is reflected through the equity method. Mobinil‟s financial figures for

9M 2009 and H1 2010 are represented as a discontinued operation under IFRS.

Total subscribers surpassed the 100 million mark, and have now exceeded 103 million, an

increase of 16% over the same period last year.

Net Income before minority interest showed a record high increase of 153% compared to the

same period last year, reaching US$ 922 million1 for the period ended September 30th, 2010. This

increase is attributable to the significant gain of US$ 822 million1 recognized on the ECMS

Transaction in Q3 2010 by comparing the carrying amount of the investments in Mobinil and

ECMS to the relevant fair value, taking into consideration the net proceeds from the transaction

for the global settlement fee amounting to US$ 300 million. Excluding this exceptional item, Q3

2010 profits from continuing operations showed a strong performance with $112 million1.

Net Debt was decreased by 12% compared to H1 2010. As of September 30th, 2010, net debt

stood at US$ 4,068 million1, with a Net Debt/EBITDA of 2.4x, while Net Debt stood at US$ 4,613

million1 in H1 2010 with a Net Debt/EBITDA of 2.7x.

Revenues reached US$ 3,122 million1, increasing by 1.6% over the first nine months of 2009 as a

result of strong growth in most of the GSM operations, with the exception of Algeria. The 8.9%

decrease in OTA‟s YoY revenues was driven by the impact of the crisis that took place in Q4

2009, as well as the inability to launch new promotions until the end of Q3 2010 and banning

advertising on the government owned TV channels. Revenues of Mobilink and Tunisiana were

impacted YoY due to currency devaluation: revenues for Mobilink were up 9.6% in local

currency vs. a 4.8% increase in US$ and revenues for Tunisiana increased by 10% in local

currency vs. an increase of 4.7% in US$. Q3 10 revenues increased by 1.3% compared to Q2 10.

EBITDA reached US$ 1,328million1, a decrease of 0.8% compared to the same period last year.

The solid performance across all the GSM subsidiaries was negatively impacted by the 13.2%

decrease in Djezzy‟s EBITDA as a result of the crisis situation in Algeria. EBITDA increased by

almost 2% compared to Q2 2010.

Group EBITDA margin stood at 42.5%, a decline of 1% compared to 9M 2009. EBITDA margins of

the major subsidiaries were: Djezzy 57.3%, Tunisiana 52.9%, Mobilink 39.6% and banglalink 29.0%.

Earnings per GDR reached US$ 0.92/GDR (based on a weighted average for the outstanding

GDRs of 1,004 million over 9M 2010)2.

1. US$ financial figures in the Income Statement & Balance Sheet are according to the International Financial Reporting Standards (IFRS).

2. The weighted average for the outstanding GDRs was 1,004,449,912 as of September 30th, 2010.



“Subscribers have now surpassed the

100 million mark and net income

before minority interest has reached

US$ 922 million for the period.”

Khaled Bichara, Group CEO, commented on the results:

“The third quarter of 2010 marks a

period with several milestones

attained by OTH despite the various

pressures that our operations were

subjected to. Subscribers have now

surpassed the 100 million mark, net

income before minority interest has

achieved a 153% increase over the

previous year reaching US$ 922 million for the

period, and net debt was successfully reduced to

2.4x Net Debt/EBITDA compared to 2.7x Net

Debt/EBITDA in H1 2010.

Djezzy has displayed

resilience and maintained

relative stability, despite local

governmental restrictions and

actions, which have resulted

in a toughening operational

environment and which threaten network quality.

On July 13th, 2010, the amended and restated

shareholders‟ and settlement agreements

concluded with France Telecom entered into force

and hence Mobinil will be reflected through the

equity method beginning this quarter. From an

operational standpoint, Mobinil has succeeded in

mitigating competitive and regulatory pressures,

receiving new dials from the regulator thus allowing

over 2 million additions to its network QoQ. In

addition, Mobinil‟s acquisition of LINKdotNET was

concluded in Q3 2010, bringing about a

convergence between ISPs and operators, which

will clearly enhance value for both businesses.

In Pakistan, the economy was strongly hit by the

major flood, causing a loss of infrastructure and

agricultural crops. It has been estimated that GDP

growth may drop to 2%, missing the 4.5% GDP initial

growth target, which will inevitably have a

significant effect on the operation‟s growth in the

country. Mobilink‟s infrastructure was also hit with

damages to over 400 sites out of a total of 8,070

sites. Responsive measures were quickly undertaken

to ensure the operation of our network. As part of

Orascom Telecom‟s corporate social responsibility

program, OTH joined in relief efforts by launching a

donation campaign in partnership with the World

Food Program, and with the cooperation of the

Mobilink Foundation, WIND Canada and Wind Italy

for the benefit of the flood victims in Pakistan.

Furthermore, the employees of Mobilink offered their

services in relief efforts,

which resulted in over 1,000

volunteer hours dedicated

to more than 112,000

victims of the flood.

Our Tunisian operation

increased its subscriber base by 21% compared to

the first nine months of 2009. Tunisiana also

managed to increase its market share to 53%

through several promotional campaigns aimed at

ensuring its position against the new third entrant

into the market.

Subscribers in Bangladesh increased by over 49%

YoY in preparation for the entry of a new player into

the Bangladeshi telecommunications market.

In Canada, WIND Mobile has achieved strong

subscriber growth through promotions aimed at

facilitating the switch to their new network and

increased sales presence.

In spite of the many challenges OTH‟s operations

face, we are confident in our promise to uphold

shareholder value and proceed with our efforts to

impact the global telecom segment. “



Operational Performance

Subscribers

In the 9 months ended September 30th, 2010,

Orascom Telecom continued to grow its customer

base, surpassing the 100 million subscriber mark and

reaching over 103 million customers, a 16% increase

over the same period last year. Bangladesh carried

on its strong growth trend; displaying an increase of

nearly 50% YoY and over two million net additions in

Q3 alone. Operations in Tunisia and Egypt also

showed healthy growth in their subscriber bases,

increasing by 21% and 15% respectively. In Algeria,

Djezzy‟s subscribers remained relatively stable with a

YoY increase of over 1%, and a QoQ decrease

attributable to SIM card shortage as well as the

inability to launch neither new promotions nor tariff

revamps for the post-paid segment throughout the

year with regulatory approval for promotions

coming through towards the end of the third

quarter. Furthermore, the prohibition to advertise on

the government owned TV channels negatively

impacted Djezzy‟s subscriber growth. Pakistan‟s

subscriber base grew by nearly 5%, compared to

the same period last year, despite the country-wide

damage affecting infrastructure caused by the

floods in Q3 2010. Furthermore, the decrease in

Mobilink‟s subscribers QoQ is attributable to a base

clean up, as well as a sales slowdown due to the

flood and seasonality effect. Both koryolink and

Telecel Globe are delivering high subscriber growth;

the customer base in Telecel Globe is approaching

3 million, while in North Korea subscribers‟ growth

has accelerated by almost doubling its base from

Q2 2010. The Canadian operation, WIND Mobile,

saw also a dramatic acceleration of its subscribers,

increasing by 49% QoQ, reaching 140 thousand by

the end of Q3 2010. In Lebanon, Alfa‟s subscribers

increased by almost 27% compared to the same

period last year.

Table 1: Total Subscribers

1. On July 13, 2010, the amended and restated shareholders‟ and settlement agreements concluded with France Telecom entered into force.

Consequently, Mobinil is reflected through the equity method starting Q3 2010.

Subsidiary30 Sept.

2009

30 June

2010

30 Sept.

2010

Inc/(dec)

Sept. 2010 vs.

Sept. 2009

Djezzy (Algeria) 14,726,081 15,142,460 14,919,031 1.3%

Mobilink (Pakistan) 30,046,050 32,202,547 31,444,099 4.7%

Tunisiana (Tunisia) 4,807,677 5,562,269 5,797,291 20.6%

banglalink (Bangladesh) 12,135,528 16,096,598 18,107,163 49.2%

Telecel Globe 1,496,000 2,501,000 2,952,530 97.4%

koryolink (DPRK) 69,261 184,531 301,199 n.m.

Alfa (Lebanon) 988,831 1,148,473 1,253,163 26.7%

Total 64,269,428 72,837,878 74,774,476 16.3%

Operations accounted for under

the equity method

Mobinil (Egypt) 24,624,733 26,147,615 28,401,312 15.3%

Wind Canada (Canada) 93,882 139,681 n.a.

Total 24,624,733 26,241,497 28,540,993 15.9%

Grand Total 88,894,161 99,079,375 103,315,469 16.2%

1



ARPU

The high subscriber growth trend and the strong

market activities had a dilutive impact on ARPU for

Q3 2010 versus Q3 2009. In Egypt, ARPU declined by

19% as a result of competitive pressures in the

market leading to tariff cuts. In Bangladesh and

North Korea, the significant growth in subscribers

YoY led to ARPU dilution. The decline in ARPU in

Algeria is due to, among other things, the Ramadan

seasonality shift to August, the peak season of Q3,

as well as the suspension of a portion of the post-

paid base for cash collection issues beginning Q1

2010.

ARPU in Q3 2010 was negatively impacted by the

depreciation of the local currencies against the US$

in Tunisia and Pakistan. In Tunisia, the ARPU

decrease is attributable to the dilutive impact of

subscriber additions compared to the same period

last year. Mobilink‟s ARPU declined slightly

compared to Q3 2009 due to the increased level of

promotions in response to competition in the

market, as well as a sales slowdown in the third

quarter of 2010.

However, in most operations ARPU remained stable

in comparison to the previous quarter.

Table 2: Blended Average Revenue Per User (ARPU)

Table 3: Blended Average Revenue Per User (ARPU) (Local Currency)

1. ARPU expressed under OTH‟s definition may differ from Mobinil‟s disclosed ARPU. Please see Appendix for definition.

2. Global ARPU is calculated on a year to date basis, taking into account the weighted average subscribers for calculation.

Subsidiary

30 Sept.

2009

US$

(3 months)

30 June

2010

US$

(3 months)

30 Sept.

2010

US$

(3 months)

Inc/(dec)

Sept. 2010 vs.

Sept. 2009

Djezzy (Algeria) 10.5 9.5 9.6 (8.9%)

Mobilink (Pakistan) 2.8 2.9 2.7 (4.7%)

Mobinil (Egypt) 6.7 5.4 5.4 (19.4%)

Tunisiana (Tunisia) 13.1 10.1 10.2 (22.3%)

banglalink (Bangladesh) 2.5 2.5 2.3 (9.2%)

koryolink (DPRK) 21.6 21.5 15.2 (29.7%)

Global ARPU (YTD) 5.8 5.0 5.8 (1.5%)

Global ARPU (3 months) 5.8 5.0 4.9 (15.1%)

Subsidiary

30 Sept.

2009

(3 months)

30 June

2010

(3 months)

30 Sept.

2010

(3 months)

Inc/(dec)

Sept. 2010 vs.

Sept. 2009

Djezzy (Algeria) (DZD) 765.9 711.3 724.5 (5.4%)

Mobilink (Pakistan) (PKR) 234.2 246.9 231.0 (1.4%)

Tunisiana (Tunisia) (TND) 17.4 15.0 14.9 (14.4%)

1

2



Market Share & Competition

The third quarter of the year saw OTH‟s operations

leading in market share, with the exception of

banglalink which retained its position in the

Bangladeshi market with second highest market

share. In Algeria, market share decreased in

comparison to the previous quarter, due to, among

other things, promotional inactivity until approval

was allowed by the regulator towards the end of

Q3, banning advertising on the government owned

TV channels, as well as SIM card shortage. In both

Bangladesh and Tunisia market share grew to 28%

and 53% respectively, in line with high additions to

their subscriber bases, while containing competitive

pressure. With regards to Pakistan, Mobilink held its

market share stable, despite an increasingly tough

competitive environment laden with promotions by

the other operators in the market. It should be noted

that a number of competitors in Pakistan do not

apply a strict churn policy. Mobilink‟s market share

of active subscribers as measured internally on

traffic patterns remained at 40% as of September 30,

2010.

Table 4: Market Share & Competition

1. Market share, as announced by the national Regulator is based on information disclosed by the other operators which use different subscriber

recognition policies.

2. Market share for September 2010 was not released by the Pakistani Regulator prior to this release. Accordingly, the above stated figure conveys

the trend as measured internally on Mobilink‟s traffic patterns.

Market Share (%)

30 June

2010

30 Sept

2010

Algeria Djezzy 59.1% 57.9% 1 AMN, Qtel/Nedjma

Pakistan Mobilink 32.6% 32.6% 1 U-Fone, Paktel, Telenor,

Al Warid

Tunisia Tunisiana 52.9% 53.3% 1 Tunisie Telecom, Orange

Tunisie

Bangladesh banglalink 26.9% 27.8% 2 Grameen, Aktel, Citycell,

BTTB, Bharti

Country Brand nameMarket

Position

Names of additional

network operations

1

1

2



CAPEX

Total consolidated capital expenditures for the

period ended September 30th, 2010 decreased by

10% compared to the previous year. Investments in

banglalink have been increased in order to boost

network capacity in response to subscriber growth,

and increased traffic. In Djezzy, the decrease in

CAPEX of 74% compared to the same period last

year is attributable to the blocking of imports of

equipment and spare parts and the prohibition on

FX transactions. Mobilink‟s CAPEX decreased by

23% compared to the first nine months of 2009 due

to CAPEX delays caused by the flood.

The “Other” CAPEX mainly relates to investments

made in Telecel Globe, koryolink and our

submarine cables.

Table 5: Capital Expenditure of OTH Subsidiaries for the nine months to September 30th1

1. Based on 100% ownership of all subsidiaries.

2. “Other” companies include CHEO, Linkdotnet, MedCable, Mena-Cable, OT Holding, Ring and Telecel Globe in 2009 and CHEO, Linkdotnet,

Mena-Cable, OT Holding, Ring and Telecel Globe in 2010.

3. Consolidated CAPEX based on 50% in Tunisiana.

4. CAPEX components classification (e.g. tangible vs. Intangible) may differ from an operational perspective vs. an accounting one.

Accordingly, OTH has adopted the accounting perspective in order to ensure that CAPEX classification is consistent with those reported in the

financial statements. As a result, stated CAPEX figures as of 30 September 2009 have been adjusted and may differ from previously released

CAPEX figures.

Country Service name

Total

US$ million

30 Sept. 2009

Total

US$ million

30 Sept. 2010

Inc/(dec)

Algeria Djezzy 209 55 (74%)

Pakistan Mobilink 123 95 (23%)

Tunisia Tunisiana 56 56 0%

Bangladesh banglalink 74 153 107%

Other 75 126 68%

Total 537 485 (9.7%)

Total Consolidated 509 457 (10.2%)

Consolidated Capex/Revenue 16.6% 14.7% (1.9%)

2

4

3



Main Financial Events

France Telecom and Orascom Telecom submit the main terms of their agreements on

MobiNil and ECMS to the Egyptian Financial Supervisory Authority

In April 2010, France Telecom and Orascom Telecom submitted to the Egyptian Financial Supervisory Authority the main

terms of the agreements on MobiNil and ECMS signed between them. The content of this submission can be found below.

1. Maintaining the partnership between the Parties, and subject to paragraph 4 below, neither Party shall transfer to the

other Party any shares in MobiNil for Telecommunications (unlisted) or the Egyptian Company for Mobile Services

(listed). The Parties further agreed that Orascom Telecom Holding shall not own or hold, directly or indirectly and/or

whether acting in concert, an equity stake in the Egyptian Company for Mobile Services (listed) of more than 20% of

the share capital of the latter (this refers to a standstill provision which further provides that Orascom Telecom Holding

shall not seek to directly or indirectly and/or whether acting in concert increase its current equity stake in ECMS. This

has been clarified in a subsequent press release);

2. Amending and restating the existing shareholders‟ agreement between the Parties relating to MobiNil for

Telecommunications (unlisted). As a result of this amendment, OT will adopt the equity method instead of the

proportionate consolidation method for the basis of accounting on the shareholders‟ equity. OT will consolidate its

investment using the equity method in accordance with the Egyptian Accounting Standard No. 18, where OT's share in

the net assets of ECMS at the date of entry into force of the settlement agreement shall be presented in a separate

line item in the consolidated balance sheet, rather than on a line-by-line basis. As a result of this reclassification, there

will be no impact on OT‟s consolidated income statement and OT‟s consolidated shareholders‟ equity, at that date. As

for the OT‟s share in the profits or losses, the changes in the shareholders‟ equity of ECMS recognized after that date

will be presented in a separate line item in the consolidated income statement and the consolidated statement of

shareholders‟ equity respectively. By virtue of the International Financial Reporting Standards, France Telecom will fully

consolidate its investment in MobiNil Telecommunications and ECMS as from the date of entry into force of the

settlement agreement and the Amended and Restated Shareholders Agreement. The modification of the basis of the

accounting treatment for France Telecom and Orascom Telecom will have no effect on ECMS and the minority

shareholders of ECMS;

3. Granting Orascom Telecom Holding certain rights in the amended and restated shareholders‟ agreement with respect

to the approval of material decisions and operational matters, the governance model under the Amended and

Restated Shareholders Agreement is designed to ensure (i) the consolidation by FT of the financial results of MobiNil

and its subsidiaries, and (ii) that material matters relating to the finances and operations of MobiNil, ECMS and/or their

material Subsidiaries may not be taken unless such actions are authorized pursuant to the approval of all of the OT

Directors and a majority of the FT Directors. The composition of the boards of MobiNil and ECMS reflects participation

by OT and FT which is not materially different from the original shareholders agreement, whereby FT appoints, directly

or indirectly, the majority of the members of the MobiNil and ECMS board of directors. The ECMS board of directors

shall continue to include three non-executive, independent directors with relevant industry background. ECMS'

management will include a CEO appointed by FT and a CFO designated from among FT candidates, whereas the

Chief Technical Officer and the Chief Commercial Officer will be designated by the CEO from among OT candidates.

Under the original shareholders agreement, in case the OT and the FT representatives on the board of MobiNil fail to

reach consensus on a decision, a deadlock mechanism was triggered where either party buys the other‟s stake in

MobiNil through a bidding process. Being the main reason behind the dispute subject matter of the arbitration

between OT and FT, the parties agreed to simplify and amend such deadlock resolution mechanism and replace it

with a right granted to OT in certain deadlock situations to put its shares in MobiNil and ECMS to FT for the Put Option

Consideration, which consideration is calculated on a per share price;

4. Granting Orascom Telecom Holding in the amended and restated shareholders‟ agreement the option to put its

shares in MobiNil for Telecommunications (unlisted) together with its shares in the Egyptian Company for Mobile

Services (listed) to the France Telecom Group (i) during the period from September 15 through November 15, 2012,

and (ii) during the period from September 15 through November 15, 2013, as well as (iii) at anytime until November 15,



2013 in a limited number of deadlock situations on some material decisions, and subject to certain conditions. In the

event of the exercise of the put option, the price per the Egyptian Company for Mobile Services (listed) share ("ECMS

P") which has been agreed between the Parties will increase over time from EGP 221.7 as of closing up to EGP 248.5 as

of end 2013, to be converted in EUR at a fixed EUR/EGP exchange rate of 7.53. As for the opening put option price

(221.7 as of 30/06/2010), it was calculated in reference to the weighted average market share price of ECMS for the

week preceding April 14, 2010 accreted by 3% to 30/06/2010 = 220.3*(1+3%*79/360), payable in Euros at a fixed rate

corresponding on the EGP:EUR rate as at the date of signing of the agreement. Each subsequent price represents a 3%

annual accretion over the opening put option price. Therefore, the price of the put option does not express the

parties‟ view of the long term valuation of ECMS. The price per MobiNil for Telecommunications (unlisted) share will be

computed as ECMS P multiplied by the total number of ECMS shares held by MobiNil for Telecommunications (unlisted)

in the Egyptian Company for Mobile Services (listed) and divided by the total number of MobiNil for

Telecommunications (unlisted) shares;

5. The continuation of the Parties in rendering technical support and management services to the Egyptian Company for

Mobile Services (listed) according to the two existing management agreements with the Parties, which were ratified to

the General Assembly of the Company, and whereby each Party receives a fee equal to 0.75% of the total revenues

of the Company (excluding equipment sales and sales taxes). In case of exit by OT, it will assign to FT its rights to the

above management fees and enter into a transition services agreement to the benefit of ECMS enabling ECMS, at its

option, to continue or terminate the various services and/or technical assistance agreements entered into with OT

group, all subject to applicable laws and the approval of the competent corporate bodies of ECMS. In consideration

for the assignment referred to above and the entering into by ECMS of the transition agreement, FT shall pay to OT a

fee of EUR 110 million;

6. Prior to the settlement agreement, a dispute between the relevant parties on the ownership of the "MobiNil" trademark

existed. OT and FT agreed that MobiNil and ECMS shall regularize the ownership of the MobiNil Trademark in the best

interests of ECMS and all its shareholders and with a view to enhance the visibility of the trademark;

7. The agreement in principle of the Parties on the acquisition by the Egyptian Company for Mobile Services of Link Dot

Net S.A.E and Link Egypt S.A.E, a leading Egyptian ISP, for total consideration calculated on the basis of an aggregate

enterprise value of USD 130,000,000, subject to obtaining the approval of the competent corporate bodies (general

assemblies and/or boards of directors) and completing the necessary procedures in accordance with applicable laws

and regulations; and

8. In consideration for the settlement of all disputes between the Parties, whether in Egypt or abroad, under the Master

Agreement, FT also agrees to pay OT a global settlement fee of USD 300,000,000 in consideration for OT's undertakings

and obligations under the Master Agreement, the termination of the original shareholders agreement as well as

execution of the Amended and Restated Shareholders Agreement (which results in the loss for OT of consolidation of

MobiNil financial results) and the Settlement Agreement. There is no specific contractual breakdown of the global

settlement fee among the items set forth above. However, the quantum was agreed taking into account the value of

the additional portion of EBITDA that will be consolidated by France Telecom in its financial statements. Such fee shall

be paid by one of the FT Entities in cash on the Closing Date and is in line with the benchmark of companies suffering a

discount on their holdings in non consolidated assets. The quantum and the payment of such global settlement fee do

not impact ECMS and the minority shareholders of ECMS. All the more, ECMS will benefit from the global settlement

between its main shareholders as it will enable ECMS to perform and pursue its development with the full support and

commitment of France Telecom and Orascom Telecom. Moreover, the global settlement enables France Telecom to

reinforce its long term investment in Egypt and to ensure a positive media environment for its investment.



Orascom Telecom Algeria’s (“OTA”) Tax Appeal Process

In November 2009 Orascom Telecom Algeria (OTA) received a notice of reassessment from the Algerian Direction des

Grandes Entreprises (“DGE”) in respect of the tax years 2005, 2006 and 2007 (the “Reassessment”). In December 2009, OTA

filed an administrative appeal. To appeal, OTA was required to pay 20% of alleged taxes and penalties to be owed,

amounting to USD 120 million. The appeal was rejected.

In March 2010, OTA paid a further 20% of the remaining balance amounting to USD 110 million (including delay penalties),

to appeal to the Central Commission, which was rejected. OTA‟s administrative appeal in relation to the 2004 tax

reassessment had also been rejected.

In April, after exhausting all appeal available within internal forums at the Algerian tax authority, OTA then appealed to the

Administrative Court of Algiers to request:

- An injunction to immediately suspend the payment order received pursuant to the rejection of OTA‟s appeal to the tax

administration on April 1st, 2010, and

- The dismissal of the entire tax adjustment for the years 2004 through to 2007, on the merit of the case.

OTA paid the remaining balance of the principal amount of the authorities‟ tax reassessment claim for the years 2005-2007

equivalent to USD 597* million, excluding penalties which amount to USD 74 million from which USD 49 million were paid

and USD 25 million has been suspended until final ruling of the administrative court on merits in the case filed by OTA

pertaining to taxes and penalties related thereto. All amounts paid will be recoverable if OTA‟s case against the tax

authority is successful.

These payments were made without prejudice to any rights OTH or OTA may have under: (1) the tax exemptions and

protections granted under an Investment Agreement dated 5 August 2001 signed by Algeria with OTH and Oratel

International Inc. (now a fully owned subsidiary of OTH) acting for and on behalf of OTA; (2) the 1997 Treaty for the Mutual

Promotion and Protection of Investments between Algeria and Egypt; and (3) Algerian law.

* Based on an exchange rate of: USD 1 = DZD 73.6.

Orascom Telecom Holding Announces the Sale of LINKdotNET and Link Egypt to Mobinil

In July 2010, Orascom Telecom Holding S.A.E. (“OTH” or “the Company”) announced that it had concluded the sale of its

internet services arm LINKdotNET and Link Egypt (“LINK”) to the Egyptian Company for Mobile Services (“Mobinil”). InTouch

Communications S.A.E, a wholly-owned subsidiary of OTH signed a share sale and purchase agreement with Mobinil for the

sale of LINK. The sale excludes the non-ISP part of Link Egypt‟s business and affects LINKdotNET‟s Egyptian operations only.

The other non-connectivity business, LINK Development, LINKonLINE, Connect Ads, Arab Finance Brokerage Company and

Arpu+ remain owned by OTH. The deal was a cash transaction based on an enterprise value of USD 130 Million. The

business represented 56% and 90% of the revenue and EBITDA of OTH Internet Services respectively.

Orascom Telecom Algeria (“OTA”) Received a Preliminary Tax Reassessment for the Years

2008 and 2009 Amounting to USD 230 Million Despite Having Paid the Taxes Due For the

Same Years

In September 2010, Orascom Telecom Holding (“OTH”) announced that its Algerian subsidiary Orascom Telecom Algeria

(“OTA”) received a preliminary tax notification from the Algerian Direction des Grandes Enterprises (Tax Department for

Large-Scale Companies) (the “DGE”) in respect of the years 2008 and 2009, in which the DGE preliminarily re-assessed

taxes alleged to be owed by OTA in the amount of approximately DZD 17 billion (approximately USD230 million) (the

“Reassessment”). The Reassessment is of a preliminary nature. The process as envisaged by the Algerian law, dictates that

OTA may challenge the basis of the reassessment within 40 days following the receipt of the preliminary reassessment. The

DGE would then study the arguments made by OTA and accordingly issues its final reassessment. OTA would then within a

period of 30 days either pay the full amount alleged to be owed or challenge the reassessment through the local appeal



process, whereby it will be required to pay 20% of the claim‟s principal amount. The amount paid will be recoverable if

OTA's appeal is successful.

This preliminary Reassessment comes despite the fact that OTA had already paid the taxes due for the same years. The tax

audit for these years was immediately initiated in early 2010 following the tax filing for 2009. The Reassessment is based

primarily on the unfounded allegation that OTA did not keep proper accounts for the years 2008 and 2009 notwithstanding

that OTA‟s accounts were fully audited and approved by both OTA‟s international auditors (“KPMG”), and its local

statutory auditors.

OTA fully objects to the reconstitution of its audited accounts. In addition, OTA views the technical methodology

implemented by the DGE to reconstitute its accounts to be completely arbitrary and groundless especially given that

OTA‟s accounts were fully audited and approved by both OTA‟s international auditors (“KPMG”), and its local statutory

auditors.

Without prejudice to their rights under the Investment Agreement, applicable bilateral investment treaty and applicable

laws, OTH and OTA intend to take all necessary legal steps to challenge the Reassessment.

VimpelCom combines with Weather to create new global telecom group

In October 2010, Weather Investments S.p.A (“Weather”), the parent company of Orascom Telecom Holding S.A.E. (“OTH”)

announced that it signed an agreement with VimpelCom Ltd. (“VimpelCom”) to combine the two groups creating the

world‟s fifth largest mobile telecommunications carrier by subscribers. The joint Press Release of VimpelCom and Weather

can be found on Orascom Telecom Holding‟s website http://www.otelecom.com/media/PressRelease.aspx .

http://www.otelecom.com/media/PressRelease.aspx



Financial Review

Revenues

Consolidated Revenues increased by 1.6%

compared to the previous year. All GSM operations

showed healthy revenue growth, but this was

negatively impacted by an 8.9% decrease in YoY

revenues in Algeria. Negative performance in

Algeria was due to the impact of the crisis in Q4

2009, as well as stagnation in the allowance of

promotions until the end of Q3 2010 and banning

advertising on the government owned TV

channels. Furthermore, lower VAS revenues had an

adverse impact on revenue growth.

Revenues of Mobilink and Tunisiana for the period

ended September 30th, 2010 were impacted by

currency devaluation compared to the same

period last year: revenues for Mobilink were up 9.6%

in local currency vs. a 4.8% increase in US$ and

revenues for Tunisiana increased by 10% in local

currency vs. an increase of 4.7% in US$.

Mobilink‟s revenue growth is attributable to an

increase in traffic from a higher subscriber base

and promotions, as well as higher VAS revenues.

The increase in Tunisiana‟s revenues is due to the

high additions to its subscriber base compared to

the same period last year.

banglalink's revenues grew by 29% as a result of a

higher average subscriber base.

Telecel Globe and koryolink displayed 33% and

126% increase in revenues respectively, becoming

more evident in the overall top-line trend.

Table 6: Consolidated Revenues

1. On July 13, 2010, the amended and restated shareholders‟ and settlement agreements concluded with France Telecom entered into force.

Consequently, starting Q3 2010, Mobinil is reflected through the equity method. Mobinil‟s financial figures for 9M 2009 and H1 2010 are represented

as a discontinued operation under IFRS.

2. Other Telecom Services Companies include C.A.T., OT Lebanon and TWA in 9M 2009 and OT Lebanon and TWA in 9M 2010.

Subsidiary

Represented

30 Sept

2009

US$ (000)

30 Sept

2010

US$ (000)

Inc/

(dec)

Q2 - 2010

(3 months)

US$ (000)

Q3 - 2010

(3 months)

US$ (000)

Inc/

(dec)

GSM

Djezzy (Algeria) 1,420,285 1,293,651 (8.9%) 436,529 444,597 1.8%

Mobilink (Pakistan) 787,992 826,198 4.8% 287,232 266,705 (7.1%)

Tunisiana (Tunisia) 263,548 275,826 4.7% 89,860 97,019 8.0%

banglalink (Bangladesh) 259,435 334,700 29.0% 114,470 120,576 5.3%

Telecel Globe (Africa) 57,792 76,822 32.9% 24,611 28,040 13.9%

koryolink (North Korea) 18,456 41,645 125.6% 14,170 18,445 30.2%

Total GSM 2,807,507 2,848,842 1.5% 966,872 975,382 0.9%

Telecom Services

Ring 145,518 115,158 (20.9%) 40,823 39,281 (3.8%)

Other 54,451 80,437 47.7% 26,629 28,695 7.8%

Total Telecom Services 199,968 195,595 (2.2%) 67,452 67,976 0.8%

Internet Services 65,768 77,431 17.7% 24,451 29,213 19.5%

Total Consolidated 3,073,243 3,121,867 1.6% 1,058,776 1,072,571 1.3%

1

2

1

1 1



Total GSM Revenues

Revenues for the third quarter of 2010 displayed

growth across most subsidiaries in comparison to

Q2 2010, increasing by 1.3% on a consolidated

level. In Algeria, Djezzy‟s revenues saw a 2%

increase QoQ due to higher pre-paid revenues

from promotions allowed during late summer and

Ramadan, which increased MOUs. While Q3 is

traditionally considered to be the stronger quarter,

in 2010 the holy month of Ramadan shifted into the

peak month of August, which had a halting effect

on QoQ revenue growth. Tunisiana increased its

revenues by 8% in comparison to the previous

quarter as a result of maintaining ARPU while

growing its subscriber base and the traditional

seasonal positive impact of the summer. In

Pakistan, revenues declined by 7% compared to

the previous quarter due to the widespread impact

of the flood causing lower usage and site outages,

as well as the seasonality shift of Ramadan into the

month of August during 2010. Furthermore,

aggressive pricing cuts to counter competition

adversely impacted Mobilink‟s QoQ revenues.

The operation in Bangladesh witnessed a 5%

revenue increase QoQ which is attributable to the

strong growth in banglalink‟s average subscriber

base. koryolink's revenue increase of 30% is

attributed to high additions to its subscriber base.

Table 7: Proforma Consolidated Revenues (Local Currency)1

1. Un-audited Figures.

30 Sept2009

US$ (million)

30 Sept2010

US$ (million)

1,420 1,294

788 826

264 276

259 335 58 7718 42

Total GSM

koryolink (North Korea)

Telecel Globe (Africa)

banglalink (Bangladesh)

Tunisiana (Tunisia)

Mobilink (Pakistan)

Djezzy (Algeria)

2,808 2,849

30 Sept

2009

30 Sept

2010

Inc/

(dec)Q2 - 2010 Q3 - 2010

Inc/

(dec)

(3 months) (3 months)

GSM

Djezzy (Algeria) (DZD bn) 103.2 96.4 (6.5%) 32.6 33.4 2.6%

Mobilink (Pakistan) (PKR bn) 64.3 70.4 9.6% 24.4 23.0 (5.8%)

Tunisiana (Tunisia) (TND mn) 361.8 398.1 10.0% 133.4 141.4 6.0%

Subsidiary

1.5%



EBITDA

Consolidated EBITDA witnessed a decrease of 0.8%

compared to the same period last year. The solid

performance across all the GSM subsidiaries was

negatively impacted by the crisis situation in Algeria.

Djezzy‟s EBITDA decreased by 13.2% compared to

the same period last year as a result of, among other

things, lower revenues due to the inability of

animating the base through promotions, the

restrictive sales environment, the launch of

aggressive retention and loyalty offers leading to

ARPU dilution in addition to the introduction of a new

5% sales tax on mobile recharges effective from July

2009.

EBITDA for Mobilink increased by 22.3% in local

currency vs. an increase of 16.9% in US$ and EBITDA

for Tunisiana increased by 6.3 % in local currency,

while it increased by only 1% in US$.

Mobilink‟s EBITDA increased as a result of higher

revenues as well as a lower absorption of activation

taxes, which were reduced to Rs 250/SIM in July 2009

from Rs 500/SIM. Tunisiana‟s EBITDA grew due to

higher revenues.

The growth of the subscriber base in Bangladesh led

to an increase in marketing expenses in Q2 and Q3

of 2010 compared to the same period last year. As a

result banglalink‟s EBITDA grew slightly by 1.6%

compared to the same period last year. Telecel

Globe‟s EBITDA showed a tremendous increase

compared to the first nine months of 2009 due to

growing revenues coupled with decreased incoming

rates and constant OPEX. koryolink‟s EBITDA grew

significantly compared to the same period last year

as a result of an increasing subscriber base

generating higher revenues.

The increase in Telecom Services is mainly

attributable to OT Lebanon (Alfa Management

contract).

Table 8: Consolidated EBITDA1

1. EBITDA excludes management fees which were previously treated as a cost in each subsidiary and as a revenue for the Holding.

2. On July 13, 2010, the amended and restated shareholders‟ and settlement agreements concluded with France Telecom entered into force. Consequently, starting Q3 2010,

Mobinil is reflected through the equity method. Mobinil‟s financial figures for 9M 2009 and H1 2010 are represented as a discontinued operation under IFRS.

3. Other Telecom Services Companies include: C.A.T., MedCable, Mena Cable, OT Lebanon, TWA, and OTWIMAX in 9M 2009 and 9M 2010.

4. Other non operating companies include: OTH, Cortex, Eurasia, FPPL, Moga Holding, MINMax, OIH, OIIH, Oratel, OT Holding Canada, OT ESOP, OTFSCA, OTI Malta, OT

Services Europe, OT Oscar, OT Wireless Europe, OT Asia, Pioneers, SAWLTD, ITCL, M-link, Swyer, IWPL and Telecel.

Subsidiary

Represented

30 Sept

2009

US$ (000)

30 Sept

2010

US$ (000)

Inc/

(dec)

Q2 - 2010

(3 months)

US$ (000)

Q3 - 2010

(3 months)

US$ (000)

Inc/

(dec)

GSM

Djezzy (Algeria) 853,362 740,810 (13.2%) 245,847 265,548 8.0%

Mobilink (Pakistan) 279,565 326,848 16.9% 115,646 105,431 (8.8%)

Tunisiana (Tunisia) 144,492 145,943 1.0% 47,239 51,833 9.7%

banglalink (Bangladesh) 95,408 96,914 1.6% 30,982 23,340 (24.7%)

Telecel Globe (Africa) 2,723 16,862 n.m. 5,685 7,565 33.1%

koryolink (North Korea) 9,990 26,154 n.m. 12,830 7,475 (41.7%)

Total GSM 1,385,539 1,353,531 (2.3%) 458,227 461,193 0.6%

Telecom Services

Ring (8,485) (515) 93.9% (3,502) (3,311) 5.5%

Other (5,982) 17,659 n.m. 5,919 6,257 5.7%

Total Telecom Services (14,467) 17,144 n.m. 2,417 2,946 21.9%

Internet Services 3,911 9,653 146.8% 2,848 3,464 21.6%

OT Holding & Other (36,375) (52,523) (44.4%) (22,162) (18,203) 17.9%

Total Consolidated 1,338,609 1,327,805 (0.8%) 441,331 449,399 1.8%

3

4

2

2



Total GSM EBITDA

Consolidated EBITDA increased by almost 2%

compared to the previous quarter.

In Pakistan, Mobilink‟s EBITDA showed a QoQ

decrease of nearly 9% due to lower revenues for the

quarter. Tunisiana witnessed an almost 10% increase

in its EBITDA in comparison to the last quarter.

banglalink's EBITDA decreased by almost 25%

compared to Q2 2010 due to higher marketing costs

resulting from higher gross adds.

Table 9: Proforma Consolidated EBITDA (Local Currency)1

1. Un-audited Figures.

30 Sept2009

US$ (million)

30 Sept2010

US$ (million)

853 741

280 327

144 146

95 97

3 17 10 26

Total GSM

koryolink (North Korea)

Telecel Globe (Africa)

banglalink (Bangladesh)

Tunisiana (Tunisia)

Mobinil (Egypt)

Mobilink (Pakistan)

Djezzy (Algeria)

1,386 1,354

30 Sept

2009

30 Sept

2010

Inc/

(dec)Q2 - 2010 Q3 - 2010

Inc/

(dec)

(3 months) (3 months)

GSM

Djezzy (Algeria) (DZD bn) 61.9 55.2 (10.8%) 18.4 19.8 7.5%

Mobilink (Pakistan) (PKR bn) 22.8 27.9 22.3% 9.8 9.0 (7.8%)

Tunisiana (Tunisia) (TND mn) 198.0 210.5 6.3% 70.1 75.5 7.7%

Subsidiary

2

-2.3%



EBITDA MARGIN

Consolidated EBITDA margin stood at 42.5%, a

decline of 1% compared to the period ended

September 30th, 2009, due to lower margins in

Algeria, Tunisia and Bangladesh. The margin decline

in OTA was driven by the aforementioned sales tax

introduction, borne by the operators. Tunisiana‟s

EBITDA margin decline of 2% is due to increased

sales costs, higher handset costs, as well as the

launching of several bonus promotions to counter

competitive pressures arising from the third entrant

into the Tunisian market. banglalink's margin

decreased 8% YoY as a result of strong net additions

generating higher marketing expenses in Q2 and

Q3 of 2010. The declining margin pressure was

eased by the EBITDA margin increase of Mobilink of

4%, resulting from increasing revenues. Telecel

Globe‟s margin grew by 17% compared to the

same period last year as a consequence of higher

subscriber growth and revenues coupled with lower

OPEX.

Table 10: Consolidated EBITDA Margin

Subsidiary

Represented

30 Sept

2009

30 Sept

2010Change

Q2 - 2010

(3 months)

Q3 - 2010

(3 months)Change

GSM

Djezzy (Algeria) 60.1% 57.3% (2.8%) 56.3% 59.7% 3.4%

Mobilink (Pakistan) 35.5% 39.6% 4.1% 40.3% 39.5% (0.7%)

Tunisiana (Tunisia) 54.8% 52.9% (1.9%) 52.6% 53.4% 0.9%

banglalink (Bangladesh) 36.8% 29.0% (7.8%) 27.1% 19.4% (7.7%)

Telecel Globe (Africa) 4.7% 21.9% 17.2% 23.1% 27.0% 3.9%

koryolink (North Korea) 54.1% 62.8% 8.7% 90.5% 40.5% (50.0%)

Total GSM 49.4% 47.5% (1.8%) 47.4% 47.3% (0.1%)

Total Telecom Services (7.2%) 8.8% 16.0% 3.6% 4.3% 0.8%

Internet Services 5.9% 12.5% 6.5% 11.6% 11.9% 0.2%

EBITDA Margin 43.6% 42.5% (1.0%) 41.7% 41.9% 0.2%



Foreign Exchange Rates

Table 11: Foreign Exchange Rates used in the Income Statement & Balance Sheet

1- Represents the average monthly exchange rate from the start of the year until the end of the period.

2- Represents the spot exchange rate at the end of the period.

3- Appreciation / (Depreciation) of USD vs. Local Currency.

Net Income

Effective July 13, 2010 and as per the amended and

restated shareholders‟ and settlement agreements

concluded with France Telecom, OTH measured its

investments in Mobinil and ECMS at fair value

according to IAS 31 “Interests in Joint Ventures” and

subsequently accounted for them using the equity

method. OTH recognized a gain of US$ 822 million on

the transaction by comparing the carrying amount of

the investments in Mobinil and ECMS to the relevant

fair value, taking into consideration the net proceeds

from the transaction for the global settlement fee

amounting to US$300 million. Consequently, Net

Income before minority interest for the period ended

September 30th, 2010 reached US$ 922 million

representing an increase of 153% over the previous

year. Excluding this exceptional item, Q3 2010 profits

from continuing operations showed a strong

performance with $112 million.

EPS in the 9 months ended September 30, 2010 stood

at US$ 0.92/GDR.

% Chg % Chg

Currency Sept 09 Jun 10 Sept 10 Sept 10 vs Sept 10 vs

Sept 09 Jun 10

Egyptian Pound/USD

Income Statement 5.6080 5.5748 5.6221 0.3 0.8

Balance Sheet 5.5250 5.7149 5.7050 3.3 (0.2)

Algerian Dinar/USD


Balance Sheet 72.4470 75.3636 74.7419 3.2 (0.8)

Tunisian Dinar/USD


Balance Sheet 1.2970 1.5173 1.4213 9.6 (6.3)

Pakistan Rupee/USD


Balance Sheet 83.1200 85.5000 86.3333 3.9 1.0

Bangladeshi Taka/USD


Balance Sheet 69.4200 69.8000 70.1000 1.0 0.4

Canadian Dollar/USD

Income Statement 1.1480 1.0258 0.9736 (15.2) (5.1)

Balance Sheet 1.0630 1.0392 0.9801 (7.8) (5.7)

1

2

1

2

2

2

2

2

1

1

1

1

3 3



Table 12: Income Statement in IFRS/US$

1- Management Presentation developed from IFRS financials.

2- Mainly due to the impairment of MedCable in Algeria.

3- Due to the proceeds of the disposal of M-Link.

4- Due to the proceeds of the disposal of LINKdotNET and LINK Egypt in Q3 2010.

5- Due to a waiver obtained from the lenders regarding the Algerian tax claim amounting to approximately US$ 24 million in H1 2010.

6- Mainly due to gains of approx. US$36.5 million resulting from the early extinguishment of PMCL‟s bond.

7- Mainly due to the unrealised FX loss from mark to market value of the US$ denominated debt at OTH of US$ 3.5 billion as a result of the

depreciation of the Egyptian Pound during H1 2010.

8- Mainly due to the launch of the Canadian operations. Q3 2010 figures include the equity consolidation of Mobinil as per the amended and

restated shareholders‟ and settlement agreements concluded with France Telecom which entered into force on July 13, 2010.

9- On July 13, 2010, the amended and restated shareholders‟ and settlement agreements concluded with France Telecom entered into force.

Consequently, starting Q3 2010, Mobinil is reflected through the equity method. Mobinil‟s financial figures for 9M 2009 and H1 2010 are

represented as a discontinued operation under IFRS.

10- As a result of the amended and restated shareholders‟ and settlement agreements concluded with France Telecom, whereby Mobinil and

ECMS are accounted for using the equity method. The figure also includes the net amount of the Global Settlement Fee.

11- Equates to Net Income after Minority Interest.

12- Based on a weighted average for the outstanding number of GDRs of 1,004,449,912 GDRs as of 30 September 2010. On a pro forma basis for the

rights issue, the weighted average for the outstanding number of GDRs for 9M 2009 is 875,380,629. The weighted average for the outstanding

number of GDRs in Q2 2010 and Q3 2010 is: 1,045,643,124 GDRs and 1,045,651,444 GDRs respectively.

13- Due to the deconsolidation of Mobinil and the implementation of the equity method.

Represented

30 Sept

2009

30 Sept

2010

Inc/

(dec)Q2 - 2010 Q3 - 2010

Inc/

(dec)

US$ (000) US$ (000)(3 months)

US$ (000)

(3 months)

US$ (000)

Revenues 3,073,243 3,121,867 1.6% 1,058,636 1,072,569 1.3%

Other Income 27,102 25,545 8,822 7,503

Total Expense (1,761,736) (1,819,607) (626,127) (630,673)

EBITDA 1,338,609 1,327,805 (0.8%) 441,332 449,399 1.8%

Depreciation & Amortization (605,580) (601,780) (200,082) (202,339)

Impairment of Non Current Assets (22,859) (42,821) (31,289) (7,785)

Gain (Loss) on Disposal of Non Current

Assets35,940 26,275 (452) 26,917

Operating Income 746,110 709,480 (5%) 209,508 266,193 27%

Financial Expense (331,167) (368,384) (118,964) (114,798)

Financial Income 92,201 59,253 21,523 20,662

Foreign Exchange Gain (Loss) 10,805 (89,142) (121,607) 24,859

Net Financing Cost (228,160) (398,273) (219,048) (69,277)

Share of Profit (Loss) of Associates (20,974) (82,758) (33,222) (15,844)

Profit Before Tax 496,976 228,449 (54%) (42,763) 181,072 n.m.

Income Tax (216,158) (191,062) (65,457) (68,858)

Profit from Continuing Operations 280,819 37,386 (87%) (108,220) 112,214 n.m.

Gains or losses from discontinued

operations132,515 913,606 66,818 822,023

Profit for the Period 413,334 950,992 130% (41,402) 934,236 n.m.

Attributable to:

Equity Holders of the Parent 364,520 921,940 153% (66,082) 939,217 n.m.

Earnings Per Share (US$/GDR) 0.42 0.92 120% (0.06) 0.90 n.m.

Minority Interest 48,814 29,052 24,680 (4,980)

Net Income 413,334 950,992 130% (41,402) 934,236 n.m.

3

2

1

12

6

8

12

11

12

7 7

4

9

2

4

8 8

13

13

13

13

5

10 10

12



Table 13: Balance Sheet in IFRS/US$

1- Net Debt is calculated as a sum of Short Term Debt, Long Term Debt, less Cash and Cash Equivalents.

IFRS/US$ IFRS/US$

31 December

2009

30 September

2010

US$ (000) US$ (000)

Assets

Property and Equipment (net) 5,031,757 3,910,217

Intangible Assets 2,261,477 948,496

Other Non-Current Assets 963,990 2,961,976

Total Non-Current Assets 8,257,224 7,820,689

Cash and Cash Equivalents 759,546 838,661

Trade Receivables 331,759 313,373

Assets Held for Sale 109,953 -

Other Current Assets 640,537 1,082,976

Total Current Assets 1,841,795 2,235,009

Total Assets 10,099,019 10,055,698

Equity Attributable to Equity Holders of the Company 1,275,765 2,931,834

Minority Share 140,029 67,519

Total Equity 1,415,794 2,999,354

Liabilities

Long Term Debt 4,873,991 4,132,628

Other Non-Current Liabilities 340,145 352,269

Total Non-Current Liabilities 5,214,136 4,484,898

Short Term Debt 998,231 773,770

Trade Payables 1,042,907 779,347

Liabilities Held for Sale 54,946 -

Other Current Liabilities 1,373,005 1,018,329

Total Current Liabilities 3,469,089 2,571,447

Total Liabilities 8,683,225 7,056,344

Total Liabilities & Shareholder’s Equity 10,099,019 10,055,698

Net Debt 5,112,676 4,067,737 1



Table 14: Cash Flow Statement in IFRS/US$1

IFRS/US$ IFRS/US$

Represented

30 September

2009

30 September

2010

US$ (000) US$ (000)

Cash Flows from Operating Activities

Profit/Loss for the Period from continuing operations 280,819 37,386

Depreciation, Amortization & Impairment of Non-Current Assets 628,439 644,601

Income Tax Expense 216,158 191,062

Net Financial Charges 238,966 309,131

Share of Loss (Profit) of Associates Accounted for Using the

Equity Method20,974 82,758

Other (7,645) 115,235

Changes in Assets Carried as Working Capital (72,765) (355,355)

Changes in Other Liabilities Carried as Working Capital 143,596 (318,716)

Income Tax Paid (497,254) (212,320)

Interest Expense Paid (317,804) (250,759)

Net Cash Generated by/(used in) Operating Activities 633,484 243,023

Cash Flows from Investing Activities

Cash Outflow for Investments in Property & Equipment, Intangible

Assets, and Financial Assets & Consolidated Subsidiaries(949,044) (520,467)

Proceeds from Disposal of Property & Equipment, Associates,

Subsidiaries and Financial Assets157,798 132,173

Advances & Loans made to Associates & other parties (62,000) (261,318)

Dividends & Interest Received 17,743 15,678

Net Cash Used in Investing Activities (835,503) (633,934)

Cash Flows from Financing Activities

Proceeds from Non-Current Borrow ings 571,880 330,269

Repayment of Non-Current Borrow ings (443,886) (844,224)

Net Proceeds/(Payments) from Current Financial Liabilities 199,077 (9,892)

Net Change in Cash Collateral 76,351 15,917

Dividend Payments (91,237) -

Proceeds / (Payments) for Treasury Shares (7,143) (1,014)

Capital injections - 768,662

Change in Minority Interest (19,609) -

Net Cash generated by Financing Activities 285,433 259,718

Discontinued operations

Net cash generated by operating activities 234,901 103,459

Net cash used in investing activities (137,248) 143,071

Net cash used in f inancing activities (67,358) (25,500)

Net cash generated by discontinued operations 30,295 221,030

Net Increase /(Decrease) in Cash & Cash Equivalents 113,709 89,837

Cash included in Assets Held for Sale (12,664) -

Effect of Exchange Rate Changes on Cash & Cash Equivalents (3,678) (10,722)

Cash & Cash Equivalents at the Beginning of the Period 651,783 759,546

Cash & Cash Equivalents at the End of the Period 749,150 838,661

1. On July 13, 2010, the amended and restated shareholders‟ and settlement agreements concluded with France Telecom entered into force. Consequently, starting Q3 2010,

Mobinil is reflected through the equity method. Mobinil‟s financial figures for 9M 2009 and H1 2010 are represented as a discontinued operation under IFRS.

Table 14: Cash Flow Statement in IFRS/US$1



According to the Egyptian Accounting Standards (EAS), the investments in Mobinil and ECMS are measured at cost and

not at fair value as per the IFRS. Consequently, the gain recognized on the ECMS Transaction is not reflected in the

following statement.

Table 15: Income Statement in EAS/Egyptian Pounds

1- Management Presentation developed from EAS financials.

2- Adjusted based on a pro forma basis for the rights issue.

3- Based on a weighted average for the outstanding number of shares for 9M 2010 of 5,022,249,558 local shares. On a pro forma basis for the rights

issue, the weighted average for the outstanding number of shares for 9M 09 is 4,376,903,146 local shares.

Represented

30 Sept

2009

30 Sept

2010

Inc/

(dec)

LE (000) LE (000)

Revenues 17,236,112 17,551,484 2%

Other Income 152,998 143,616

Total Expense (9,833,265) (10,210,227)

EBITDA 7,555,845 7,484,873 (1%)

Depreciation & Amortization (3,395,575) (3,381,908)

Impairment charges (128,203) (240,743)

Disposal of non current assets 197,567 147,850

Operating Income 4,229,634 4,010,072 (5%)

Financial Expense (1,857,130) (2,059,619)

Financial Income 520,105 333,127

Foreign Exchange Gain (Loss) 60,601 (501,167)

Net Financing Cost (1,276,424) (2,227,659)

Share of Profit (Loss) of Associates (117,629) (466,133)

Profit Before Tax 2,835,581 1,316,280 (54%)

Income Tax (1,212,309) (1,073,553)

Profit from Continuing Operations 1,623,272 242,727 (85%)

Gains or losses from discontinued

operations764,124 1,751,892

Profit for the Period 2,387,396 1,994,619 (16%)

Attributable to:

Equity Holders of the Parent 2,107,572 1,803,337 (14%)

Earnings Per Share (EGP/Share) 0.48 0.36 (25%)

Minority Interest 279,824 191,282

Net Income 2,387,396 1,994,619 (16%)

1

2

3

3



Table 16: Balance Sheet in EAS/Egyptian Pounds1

1- Management presentation developed from EAS financials.

2- Net Debt is calculated as a sum of Short Term Debt, Long Term Debt, less Cash and Cash Equivalents.

EAS/LE EAS/LE

31 December

2009

30 September

2010

LE (000) LE (000)

Assets

Property and Equipment (net) 27,526,242 22,304,974

Intangible Assets 12,262,066 9,705,821

Other Non-Current Assets 5,310,618 8,602,910

Total Non-Current Assets 45,098,927 40,613,705

Cash and Cash Equivalents 4,184,340 4,784,561

Trade Receivables 1,827,658 1,787,791

Assets Held for Sale 605,732 -

Other Current Assets 3,570,237 6,178,435

Total Current Assets 10,187,968 12,750,787

Total Assets 55,286,895 53,364,492

Equity Attributable to Equity Holders of the Company 6,806,645 13,078,647

Minority Share 762,697 400,008

Total Equity 7,569,342 13,478,655

Liabilities

Long Term Debt 26,747,498 23,576,685

Other Non-Current Liabilities 1,886,011 1,671,513

Total Non-Current Liabilities 28,633,509 25,248,198

Short Term Debt 5,483,389 4,412,713

Trade Payables 5,745,373 4,446,176

Other Current Liabilities 7,855,282 5,778,750

Total Current Liabilities 19,084,044 14,637,639

Total Liabilities 47,717,553 39,885,837

Total Liabilities & Shareholder’s Equity 55,286,895 53,364,492

Net Debt 28,046,547 23,204,837 2



Presence in Countries with Favourable Dynamics:

OTH serves a population of 517 million* with an average penetration of 53%

Note: Sovereign Ratings shown are Moody‟s/S&P.

Population Figures from CIA Factbook (est. July 2010).

Mobile Penetration is based on September 30, 2010 subscriber figures & market share

*excluding Canada and Lebanon

Operations owned by Orascom Telecom (OTH has 65% indirect equity ownership in Globalive Canada but a minority voting stake)

TUNISIA

Population: 10.6 million

GDP Growth: 3%

GDP/Capita PPP ($): 8,200

Pop. Under 15 years: 23%

Sovereign Rating: BBB

Mobile Penetration: 103%

PAKISTAN

Population: 184 million

GDP Growth: 4.2%



Sovereign Rating: CCC


EGYPT


GDP Growth: 4.7%



Sovereign Rating: BB+


BANGLADESH


GDP Growth: 5.6%



Sovereign Rating: NR


NORTH KOREA


GDP Growth: 3.7%

GDP/Capita (PPP) ($): 1,900




BURUNDI


GDP Growth: 3.5%




CENTRAL AFRICA REPUBLIC


GDP Growth: 1.7%

Pop. Under 15 years3: 41%



NAMIBIA


GDP Growth: -0.8%


Sovereign Rating: BBB


ALGERIA


GDP Growth: 2.6%





CANADA


GDP Growth:-2.5%



Sovereign Rating: AAA


ZIMBABWE


GDP Growth: -1.3%

Pop. Under 15 years3: 44%





Operational Overview

Djezzy – Algeria

Financial Data Operational Data

During the third quarter of 2010, OTA continued to face

the challenge of the inability to process any transfer

abroad in foreign currency for suppliers. This factor,

among other factors, introduced significant pressure in

technical areas as well as in terms of SIM availability. As

a result, OTA lost its leading position in gross additions in

the Algerian market.

It is worth noting that the OTA Mega promo was abruptly

cut in Q1 2010 by the ARPT just 2 weeks after launch.

During the end of Q3 2010, retention and loyalty actions

were reinforced, capitalizing on the best quality service

offered through the owned shops and distribution

channels. A number of actions were launched in the

context of the “Imtyaz” loyalty program and new

partners were added into the program allowing OTA

customers to exchange points against a wider portfolio

of products.

The VAS activity distinguished itself on the marketplace

through the re-launch of the “Annuaire djezzy” at the

end of the quarter.

From a communication standpoint, OTA faced ongoing

restrictions which have had a serious impact on the

media strategy; OTA has launched four campaigns

(Djezzy card, Allo OTA, one promo classic and one

control). OTA was prohibited to use ENTV, the national

public TV and tried to fill the gap by sponsoring TV shows

and advertising on Nessma TV and MBC. The directory

service campaign (718) has filled the national outdoor

media since its launch and still remains visible in early Q4

2010. Moreover, classical messages for Ramadan and

Independence Day were launched supported by the

CDS initiatives. OTA continues to open new CDS, one

being in Algiers‟ major commercial location (more than

40,000 visitors per day). Over 250,000 calendars for

Ramadan and 100,000 football marketing tools were

also given in addition of BTL campaigns (Liberty

Gratissimo, 3=3, Ramadan Layali). Efforts have been

deployed to support street marketing, such as the

revamp of more than 300 outside banners for our own

network while supporting POS.

The local governmental restrictions and actions, which

have resulted in a toughening operational environment,

led OTA to lose 5% market share compared to the same

period last year. Moreover, revenues and EBITDA for the

period ending 30 September 2010 decreased by 9% and

13% respectively over the same period last year. This

resulted in an EBITDA margin of 57.3%; a decrease of 3%

compared to 9M 2009.

September

2009

September

2010

Inc/

(dec)

September

2009

June

2010

September

2010

Inc/(dec)

Sept. 2010 vs.

Sept. 2009


Subscribers 14,726,081 15,142,460 14,919,031 1.3%

Revenues (US$ 000) 1,420,285 1,293,651 (8.9%)

Revenues (DZD bn) 103.2 96.4 (6.5%) Market Share 62.9% 59.1% 57.9% (5.0%)

EBITDA (US$ 000) 853,362 740,810 (13.2%)ARPU (US$)

(3 months)10.5 9.5 9.6 (8.9%)

EBITDA (DZD bn) 61.9 55.2 (10.8%)ARPU (DZD)

(3 months)765.9 711.3 724.5 (5.4%)

EBITDA Margin 60.1% 57.3% (2.8%) MOU (YTD) 242 273 278 14.7%

Capex (US$ m) 209 55 (74%) Churn (3 months) 7.4% 6.2% 7.3% (0.1%)



Mobilink – Pakistan


* Market share, as announced by the Pakistani Regulator is based on information disclosed by the other operators which use different subscriber recognition policies. Market share for

September 2010 was not released by the Pakistani Regulator prior to this release. Accordingly, the above stated figure conveys the trend as measured internally on Mobilink‟s traffic

patterns.

The third quarter of the year 2010 witnessed the most

devastating flood in the history of Pakistan which not only

affected lives in terms of displacing people but the economy

has also suffered due to the loss of infrastructure and

agricultural crops. It is estimated that more than 20 million

people became victims of this flood (more than 10% of the

total population). Mobilink infrastructure also suffered in flood

hit areas; out of the network‟s 8,070 sites, more than 400 sites

were affected. Emergency measures were taken to restore the

affected sites as well as to keep the network up and running in

such areas.

The Pakistani mobile market remained competitive where all

operators kept launching aggressive offers to increase market

share and to enhance customers‟ usage during the month of

Ramadan, which is traditionally a slow month. Mobilink kept a

strong and aggressive presence in the market in order to

maintain its leadership and to engage its customer base.

Mobilink posted revenues of US$ 826 million for the period

ending 30 September 2010. The revenue for the same period

last year was US$ 788 million, translating into YoY increase of

nearly 5%. 9M 2010 EBITDA reached US$ 327 million with an

increase of 17% over the same period last year on a

comparable basis reflecting an EBITDA margin of 39.6%.

Moreover, the closing subscriber base of Q3 2010 showed 4.7%

growth as compared to the closing base of Q3 2009.

In July, Mobilink ran Bonus on Recharge and Bonus on Usage

promotions in order to enhance usage during the typically slow

summer months. During Ramadan, Mobilink rolled out its

discounted tariff promotion for calls to all other Mobilink

numbers. Another aggressive offer was launched towards the

end of August with the objective of improving customer

engagement and satisfaction as well as to counter the

aggressive competition. The campaign resulted in heavy

subscriptions and very good customer recall from the market.

Keeping the momentum, two aggressive promotions were

launched after Eid namely “Non Stop Call Masti” and “Na

Qabil-e-Yaqeen Offer” which gave the customers the

opportunity to make unlimited calls to 3 Friends and Family

numbers. Innovative reactivation promotions were also

launched during the quarter in order to reduce churn and

improve customer engagement. During Q3 there was a

cleanup for some subscribers that were mistakenly considered

active by the systems which contributed to the high

disconnections of the quarter. A revalidation to the reporting

systems has taken place to avoid such incidents in the future

For Post-paid customers, a discount offer was launched during

Ramadan for all Mobilink calls. In addition, an IDD promotion

was launched in September for post-paid customers offering

discounted calls to USA, Canada, UK and many European

destinations.

On the VAS front, a portfolio of services was launched during

Ramadan including Quran recitation, Tafseer & Duas as well as

various Ramadan alerts. Moreover, a special SMS bundle offer

and a special roaming offer to Saudi Arabia were launched

during Ramadan. Mobilink also launched the third phase of

SMS Khazana during August which generated healthy

revenues.

On the brand building front, Jazz acknowledged nation‟s

heroes and rising stars with the “Kal Kay Liyay Aaj Badlo”

campaign on Independence Day. The campaign highlighted

their achievements inspiring others to do the same with their

patriotic spirit guiding their way. Mobilink also launched a Flood

Relief campaign with contributions put in by the Holding

company and Mobilink employees. The campaign led Mobilink

to commit more than 1,000 volunteer hours and reach out to

more than 112,000 flood victims.

September

2009

September

2010

Inc/

(dec)

September

2009

June

2010

September

2010

Inc/(dec)

Sept. 2010 vs.

Sept. 2009


Subscribers 30,046,050 32,202,547 31,444,099 4.7%

Revenues (US$ 000) 787,992 826,198 4.8%

Revenues (PKR bn) 64.3 70.4 9.6% Market Share 30.9% 32.6% 32.6% 1.7%

EBITDA (US$ 000) 279,565 326,848 16.9%ARPU (US$)

(3 months)2.8 2.9 2.7 (4.7%)

EBITDA (PKR bn) 22.8 27.9 22.3%ARPU (PKR)

(3 months)234.2 246.9 231.0 (1.4%)

EBITDA Margin 35.5% 39.6% 4.1% MOU (YTD) 198 207 202 1.9%

Capex (US$ m) 123 95 (23%) Churn (3 months) 5.3% 5.9% 9.3% 4.0%

*



Mobinil – Egypt

Operational Data

* ARPU, MOU & Churn expressed under OTH‟s definition may differ from Mobinil‟s disclosed figures.

Mobinil reached over 28 million subscribers with 2 million

net additions, representing a YoY growth in subscribers

of 15%.

In this quarter Mobinil closed the acquisition of

LINKdotNET on September 2nd and one month of its

results has been consolidated.

The third quarter saw improvement in Mobinil as a result

of its efforts to mitigate the continuing competitive and

regulatory pressures. Mobinil was able to make the best

use of the limited number of dials received and increase

the dial efficiency rate leading to 2 million net adds in

the quarter. The regulator also made an additional one

million dials available which went into service during

October.

Mobinil launched MobiChat for new customers who

bought Huawei Smartphone bundles, where customers

got a monthly bonus of 1500 SMS and 900 minutes

divided over 30 days. Also, a new El Masry acquisition

promotion was launched where new customers enjoyed

10 free on-net minutes every time they made a charged

on-net minute from 12:00 am to 06:00 pm. El Me3alem

recharge promotion was relaunched in August shortly

before Ramadan where customers who subscribed to

that offer got double their recharge as credit. Mobinil

launched a new Friends and Family “Ahsan Nas” tariff

plan where all new and current pre-paid customers can

call up to four Mobinil numbers of their choice for free

from 12:00 am to 06:00 pm and for only EGP 0.05 per

minute for the rest of the day. Furthermore, a Free

daytime talk promotion was launched during Ramadan

for all pre-paid customers limited to any Mobinil number

during fasting hours in addition to an off-net rate of EGP

0.19 per minute to any mobile or landline in Egypt.

“MyShop” was launched as one of the value added

services offered through Mobinil‟s web portal MyMobinil,

where visitors have the opportunity to browse and buy

any of Mobinil‟s products.

September

2009

June

2010

September

2010

Inc/(dec)

Sept. 2010 vs.

Sept. 2009

Operational Data

Subscribers 24,624,733 26,147,615 28,401,312 15.3%

ARPU (US$)

(3 months)6.7 5.4 5.4 (19.4%)

ARPU (EGP)

(3 months)37.1 30.1 30.5 (17.8%)

MOU (YTD) 176 171 171 (3.1%)

Churn (3 months) 8.4% 8.4% 7.2% (1.2%)

*

*

*



Tunisiana – Tunisia


* Proportionate consolidated figures

Tunisiana closed the third quarter of 2010 with an overall

market share of 53.3% and 5.8 Million subscribers compared

to 52.9% overall market share and 5.6 Million subscribers at

the end of Q2 2010. The reported 9M 2010 revenues

reached US$ 276 million representing a growth of almost 5%

over the same period last year. 9M 2010 EBITDA reached

US$ 146 million with an increase of 1% over the same period

last year on a comparable basis reflecting an EBITDA

margin of 52.9%.

During the last quarter, Tunisiana adapted its offers to best

mitigate Orange‟s new products, summer seasonality

effects, and Ramadan.

Starting with the summer season (July & August), Tunisiana

targeted its youth segment by introducing a promotion

composed of a fourth Friends & Family option allowing users

to call 1, 2 or 3 on net numbers from 1 am till 8 am for only 1

TND.

As for the Amigos youth community, Tunisiana reduced the

price of unlimited calls and SMS within the community from

3 TND to 2 TND per day. This promotion became a

permanent offer in September. Furthermore, each

subscription to Amigos unlimited call formulas allows

customers to have one free hour of communication within

the community on the Sunday after.

Furthermore, Tunisiana extended the Familia community

option for pre-paid; an offer that targets family and friends

groups. In fact, this offer gives subscribers the opportunity to

share 2 hours with 4 other Tunisiana subscribers for a given

subscription fee. Moreover, as a promotion, a 100% Bonus

was granted on the first recharge purchased by the group‟s

master.

During the summer, Tunisiana launched the Random Bonus

concept where each recharge can provide up to 1,000

TND of bonus to use on net for the coming 30 days.

Tunisiana also maintained a regular but not predictable

flash promotion of 100% Bonus on recharge in order to

enhance low end usage particularly during the second half

of the month.

As for the holy month of Ramadan, which is a special

season that generally marks a slight decrease in usage,

Tunisiana extended its summer promotions to satisfy its

subscribers‟ needs.

In addition to those extensions, Tunisiana considered the

religious proportion of the sacred month and defined a

special promotion for Omra visitors; during their trip, they

can be called from Tunisiana with a 20% discount granted

to their relatives and 40% discount given to them when

receiving those calls.

Tunisiana has customized its WAP portal and added a few

services to better serve the holy month; the portal included

fasting time, Tunisian cooking recipes, and a special 3D

game.

In order to satisfy its post-paid segment and high-tech users,

Tunisiana launched a promotional 100% Bonus on locked

bundles per month. Also, an additional mid-value bundle

was defined (29 TND). As for high-tech subscribers, Tunisiana

launched the well known Galaxy S smartphone as an

alternative to the Iphone 4G which was recently launched

by Orange Tunisie.

To satisfy its international callers, Tunisiana launched a new

promotion allowing its pre-paid subscribers to call up to 3

international destinations with 30% discount priced at 1 TND

per week per number instead of 2.5 TND (pre-paid Happy

Zone offer becoming permanent since H1-2010).

Last but not least, Tunisiana introduced the unlimited on net

calls concept starting with the business segment where a

subscribing company can have up to 5 favourite numbers

to call with 20 TND per month.

September

2009

September

2010

Inc/

(dec)

September

2009

June

2010

September

2010

Inc/(dec)

Sept. 2010 vs.

Sept. 2009


Subscribers 4,807,677 5,562,269 5,797,291 20.6%

Revenues (US$ 000) 263,548 275,826 4.7%

Revenues (TND m) 361.8 398.1 10.0% Market Share 53.0% 52.9% 53.3% 0.3%

EBITDA (US$ 000) 144,492 145,943 1.0%ARPU (US$)

(3 months)13.1 10.1 10.2 (22.3%)

EBITDA (TND m) 198.0 210.5 6.3%ARPU (TND)

(3 months)17.4 15.0 14.9 (14.4%)

EBITDA Margin 54.8% 52.9% (1.9%) MOU (YTD) 172 182 185 7.5%

Capex (US$ m) 56 56 0% Churn (3 months) 5.5% 7.7% 7.0% 1.5%

*

*



banglalink – Bangladesh


* Market share, as announced by the Regulator in Bangladesh is based on information disclosed by the other operators which use different subscriber recognition policies.

banglalink continued its solid growth in the Bangladeshi

market in the first nine months of 2010 ending with 18.1

million subscribers, consolidating further its number 2

position in the market with 27.8% market share. banglalink

achieved 49% subscriber growth in the last 12 months

compared to September 30th , 2009.

Revenue performance has been impressive throughout first

nine months of 2010, reaching US$ 335 million, a 29%

increase over the same period last year. This revenue

growth was mainly driven by subscriber growth and partially

off-set by lower ARPU. In these first nine months, banglalink

achieved an EBITDA of US$ 97 million, only 1.6% higher than

the EBITDA of the same period last year as a result of giving

large subsidy for SIM tax of new connections.

These positive results were achieved by a number of highly

effective marketing actions undertaken in this period in

continuation to Q1 and Q2 of 2010. Targeting Ramadan

and Eid-ul-Fitr, banglalink launched „bonus on recharge‟

and „bonus on usage‟ campaigns along with a reactivation

offer. To further address the need of the growing customer

base and to match the competition, banglalink launched

another new package, desh FnF, for the FnF-lovers with a 7

FnF numbers facility. In the last part of Q3 2010, banglalink

launched another aggressive recharge based tariff

promotion to remain competitive as well as to reduce the

risk of churn and dormant subscribers. Also, banglalink

revised start up offer time to keep the acquisition

momentum.

As a continuation to cater to the needs of the post-paid

segment, banglalink also launched the post-paid bundle

packages of Tk 500 and Tk 1000 in July 2010, monthly

bundle packages which included minutes, SMS and data to

provide the best value to the specific needs of the post-

paid customers. To further enhance revenue and minimize

the dormant and churn base, a reactivation offer was

launched for the PCO and post-paid customers in August

2010 as a limited time promo. To increase penetration in the

SME segment and gain a competitive edge in the SME

market, banglalink launched the new SME tariff option in

August 2010 with an attractive flat tariff and more FnF at a

lower rate. Potential and existing banglalink SME customers

can now choose the package that best suits their specific

needs.

Being the leader in innovative VAS, banglalink has

launched 4 new services in Q3 that are introduced for the

first time in the Bangladeshi market. With banglalink

Emergency service, subscribers can seek help in case of an

emergency in a much faster and efficient way just by

dialing *321*5#, an SMS will be sent to pre-defined numbers

containing sender‟s current approximate location with a

pre-defined text. To cater to the entertainment needs of

mass segment, banglalink introduced CRBT Tune & Service

Gifting. During the holy month of Ramadan, banglalink

introduced first IVR based Salat Timing Service in

Bangladesh. banglalink also strengthened its position as a

leader in innovations by launching a service called

FacebookText where customer can update their Facebook

account by SMS notifications.

In the third quarter of 2010, banglalink has launched m-

ticketing service for purchasing railway tickets through

mobile phones and has already surpassed the market

leader in the number of tickets sold during the Eid vacation.

banglalink has also rolled-out its landmark domestic

remittance service to 1,000 service points in collaboration

with Bangladesh Post Office, establishing banglalink as the

most comprehensive Mobile Financial Services (MFS)

provider.

September

2009

September

2010

Inc/

(dec)

September

2009

June

2010

September

2010

Inc/(dec)

Sept. 2010 vs.

Sept. 2009


Subscribers 12,135,528 16,096,598 18,107,163 49.2%

Revenues (US$ 000) 259,435 334,700 29.0%

EBITDA (US$ 000) 95,408 96,914 1.6% Market Share 24.2% 26.9% 27.8% 3.6%

EBITDA Margin 36.8% 29.0% (7.8%)

Capex (US$ m) 74 153 107%ARPU (US$)

(3 months)2.5 2.5 2.3 (9.2%)

ARPU (BDT)

(3 months)174.5 171.9 160.2 (8.2%)

MOU (YTD) 259 235 232 (10.4%)

Churn (3 months) (5.5%) 2.1% 5.2% 10.7%

*



koryolink – Democratic People's Republic of Korea


* Based on the official exchange rate between the US$ and the North Korean Won (KPW) of KPW 135 as sourced by Bloomberg.

koryolink closed the third quarter of 2010 with revenues

reaching US$ 42 million representing a growth of 126%

over the same period last year. 9M EBITDA reached US$

26 million with an increase of 162% over the same period

last year on a comparable basis reflecting an EBITDA

margin of 62.8%.

Throughout 2010, koryolink has managed to increase the

demand on its services quarter over quarter through

offering a wide array of products and a high level of

customer experience both of which were unique to the

DPRK. This resulted in increasing customer attachment

and customer satisfaction across the different subscriber

segments that koryolink has successfully penetrated, not

only in Pyongyang, but across various regions of the

country. And this is reflected in the steady increase in

voice and SMS usage that took place over the last three

quarters.

koryolink increased its subscriber base by 63% quarter

over quarter to reach 301,199 subscribers by the end of

September 2010. Combined with the high level of voice

and VAS usage, koryolink has been able to continue its

solid performance throughout the quarter.

By the end of Q3 2010, the number of Gross Adds

coming from outside Pyongyang has reached

approximately 50% of the total Gross Adds for the

period. This was achieved through introducing new

tariffs and products that were specifically designed to

cater for the needs of lower end subscriber segments.

Additionally, koryolink continued the utilization of its 3G

network and successfully launched the Video Calling

service to the market which resulted in a high level of

demand, especially from the youth segment.

In its continuous efforts to maximize its reach to both

existing as well as potential subscribers, koryolink

enriched its distribution network during Q3 2010 by

adding two new shops inside Pyongyang and one more

shop outside Pyongyang to reach a total of 13 shops

and 13 indirect sales outlets covering 8 main cities in

addition to the capital itself.

By end of September 2010, koryolink covered 75% of

DPRK population through more than 276 Node B sites.

During the last quarter, network coverage was

extended to cover one additional main city and 42

smaller cities to reach a total of 12 main cities – in

addition to Pyongyang, 42 small cities, as well as 22

highways & railways. koryolink plans to pursue its

aggressive network expansion plan through covering 59

smaller cities by the end of this year which would raise

the percentage of the population covered to

approximately 91%.

September

2009

September

2010

Inc/

(dec)

September

2009

June

2010

September

2010

Inc/(dec)

Sept. 2010 vs.

Sept. 2009


Subscribers 69,261 184,531 301,199 n.m.

Revenues (US$ 000) 18,456 41,645 125.6% Market Share 100.0% 100.0% 100.0% 0%

EBITDA (US$ 000) 9,990 26,154 n.m.ARPU (US$)

(3 months)21.6 21.5 15.2 (29.7%)

EBITDA Margin 54.1% 62.8% 8.7%

Capex (US$ m) 25 30 20% MOU (YTD) 215 328 320 48.9%

Churn (3 months) 0.0% 0.0% 0.0% 0.0%

*

* *

*



WIND Mobile– Canada

Globalive Wireless Management Corp. (“GWMC”),

operating its wireless business under the brand name

WIND Mobile, closed the third quarter of the year with

approximately 140,000 subscribers. WIND Mobile

operates its network in five of the top six population

centers in Canada, with coverage supplemented by a

national roaming arrangement, and is the first real,

country-wide alternative in a Canadian market that was

marked by an oligopoly of three players.

WIND Mobile offers simple, feature-rich service plans that

start as low as the $15 Chat plan, unlimited province-

wide calling with its $35 Always Talk plan and unlimited

nation-wide calling on the $45 Always Shout plan. WIND

Mobile brings global standards and plans that offer true

value for Canadians, with features such as no charges

for incoming text or incoming long distance, no system

access fees and no contracts, along with the capability

of choosing to pay via post-paid or pre-paid for the

same plan features.

WIND Mobile distribution consisted of over 70 branded

locations in the quarter. WIND Mobile‟s distribution is

supplemented through agreements with third party

retailer locations. In total, WIND‟s distribution network

includes more than 300 points of presence.

WIND continued to offer innovative promotions to help

Canadians make the switch to a new alternative. Such

limited time promotions have included porting credits for

customers that bring their phone numbers to WIND and

fixed term discounts on plan fees for students during the

Back-to-School shopping period in Canada. WIND

continued to expand the breadth of handsets offered to

customers in Q3 2010, including the launch of its first two

Android devices.



Table 17: Ownership Structure & Consolidation Methods

1. On July 13, 2010, the amended and restated shareholders‟ and settlement agreements concluded with France Telecom entered into force. Consequently, starting Q3

2010, Mobinil is reflected through the equity method. Mobinil‟s financial figures for 9M 2009 and H1 2010 are represented as a discontinued operation under IFRS.

2. Mobinil is a holding company which controls 51% of ECMS, the mobile operator. Mobinil is also the brand name used by ECMS.

3. Direct and Indirect stake through Moga Holding Ltd. and Oratel.

4. Orascom Telecom Tunisia is proportionately consolidated through Orascom Tunisia Holding and Carthage Consortium.

5. OT Ventures owns 100% of Sheba Telecom which operates under the trade name banglalink.

6. Direct and Indirect stake through International Telecommunications Consortium Limited (ITCL).

7. OIH owns 100% of Orascom Telecom Iraq which sold Iraqna in December 2007.

8. Holding company for OTH‟s Share in Globalive which has been accounted for under the equity method.

2009 2010 2009 2010

GSM Operations

Mobinil (Egypt) 28.75% 28.75% Proportionate Consolidation Equity Consolidation

Egyptian Co. for Mobile Services 20.00% 20.00% Proportionate Consolidation Equity Consolidation

IWCPL (Pakistan) 100.00% 100.00% Full Consolidation Full Consolidation

Orascom Telecom Algeria 96.81% 96.81% Full Consolidation Full Consolidation

Telecel (Africa) 100.00% 100.00% Full Consolidation Full Consolidation

Orascom Telecom Tunisia 50.00% 50.00% Proportionate Consolidation Proportionate Consolidation

Telecel Globe 100.00% 100.00% Full Consolidation Full Consolidation

OT Ventures 100.00% 100.00% Full Consolidation Full Consolidation

CHEO 75.00% 75.00% Full Consolidation Full Consolidation

Internet Service

Intouch 100.00% 100.00% Full Consolidation Full Consolidation

Non GSM Operations

Ring 99.00% 99.00% Full Consolidation Full Consolidation

OTCS 100.00% 100.00% Full Consolidation Full Consolidation

OT ESOP 100.00% 100.00% Full Consolidation Full Consolidation

M-Link 100.00% 100.00% Full Consolidation Full Consolidation

OT Services Europe 100.00% 100.00% Full Consolidation -

MedCable 100.00% 100.00% Full Consolidation Full Consolidation

Mena Cable 99.97% 100.00% Full Consolidation Full Consolidation

Moga Holding 100.00% 100.00% Full Consolidation Full Consolidation

Oratel 100.00% 100.00% Full Consolidation Full Consolidation

C.A.T. 50.00% 50.00% Proportionate Consolidation Proportionate Consolidation

OT Wireless Europe 100.00% 100.00% Full Consolidation Full Consolidation

OT WIMAX 100.00% 100.00% Full Consolidation Full Consolidation

TWA 51.00% 51.00% Full Consolidation Full Consolidation

OIIH 100.00% 100.00% Full Consolidation Full Consolidation

OT Holding 100.00% 100.00% Full Consolidation Full Consolidation

FPPL 100.00% 100.00% Full Consolidation Full Consolidation

MinMax Ventures 100.00% 100.00% Full Consolidation Full Consolidation

OIH 100.00% 100.00% Full Consolidation Full Consolidation

OTFCSA 100.00% 100.00% Full Consolidation Full Consolidation

OT Holding Canada 100.00% 100.00% Full Consolidation Full Consolidation

ITCL 50.00% 50.00% Proportionate Consolidation Proportionate Consolidation

SAWLTD 100.00% 100.00% Full Consolidation Full Consolidation

Subsidiary

Ownership

September 30

Consolidation Method

September 30

2

4

5

7

6

8

3

1

1



Appendix I

Glossary

ARPU (Average Revenue per User): Average monthly recurrent revenue per customer (excluding visitors roaming revenue and connection

fee). This includes airtime revenue (national and international), as well as, monthly subscription fee, SMS, GPRS & data revenue. Quarterly

ARPU is calculated as an average of the last three months.

Capex: Tangible & Intangible fixed assets additions during the reporting period, includes work in progress, network, IT, and other tangible

and intangible fixed assets additions but excludes license fees.

Churn: Disconnection rate. This is calculated as the number of disconnections during a month divided by the average customer base for

that month.

Churn Rule: A subscriber is considered churned (removed from the subscriber base) if he exceeds the 90 days from the end of the validity

period without recharging. It is worth noting that the validity period is a function of the scratch denomination. In cases where scratch cards

have open validity, the subscriber is considered churned in case he has not made a single billable event in the last 90 days (i.e. outgoing or

incoming call or sms, wap session…). Open cards validity is applied for OTA, Mobilink, Mobinil and banglalink so far. OTT customers are

considered churn if they do not recharge within 90 days after the validity of the scratch card; while a koryolink customer is considered

churn if he/she does not recharge within four months after the validity of the scratch card.

MOU (Minutes of Usage): Average airtime minutes per customer per month. This includes billable national & international outgoing traffic

originated by subscribers (on-net, to land line & to other operators). Also, this includes incoming traffic to subscribers from land line or other

operators.

OTH’s Market Share Calculation Method: The market share is calculated through the data warehouse of OTH‟s subsidiaries. The number of

SIM cards of competitors that appeared in the call detail record of each of OTH‟s subsidiaries is collected. This reflects the number of

subscribers of the competition. However, OTH deducts the number of SIM cards that did not appear in the call detail records for the last 90

days to account for churn. The same is applied to OTH subsidiaries. This method is used to calculate the market shares of Djezzy, Mobinil, and

Tunisiana only. In Pakistan and Bangladesh, Market share as announced by the Regulators is based on disclosed information by the other

operators which may use different subscriber recognition policy.

For more information: Investor Relations

Orascom Telecom Holding S.A.E.

Nile City Towers – South Tower - 26th Floor – Ramlet Beaulac

Tel: +202 2461 5050 / 51 Fax: +202 2461 5055 / 54

Email: [email protected] Website: www.orascomtelecom.com

This presentation contains statements that could be construed as forward looking. These statements appear in a number of places in this presentation and include statements regarding

the intent, belief or current expectations of the subscriber base, estimates regarding future growth in the different business lines and the global business, market share, financial results

and other aspects of the activity and situation relating to the company.

Such forward looking statements are no guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward looking

statements as a result of various factors.

You are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date of this presentation, which is not intended to reflect Orascom

Telecom‟s business or acquisition strategy or the occurrence of unanticipated events.

mailto:[email protected]

http://www.orascomtelecom.com/

orascom telecom holding giving the … the world a voice orascom telecom holding ye – 2009 p a g e...

Documents