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GIVING THE WORLD A VOICE
Orascom Telecom Holding YE – 2009 P a g e | 1
ORASCOM TELECOM HOLDING
First Quarter 2011
GIVING THE WORLD A VOICE
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 12
Financial Statements 18
Operational Overview 23
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Orascom Telecom Holding Q1 – 2011 P a g e | 3
Orascom Telecom Holding First Quarter 2011 Results
Cairo, May18th, 2011: Orascom Telecom Holding (OTH) (Ticker: ORTE.CA, ORTEq.L, ORAT EY,
OTLD LI), announces its first quarter 2011 consolidated results.
Highlights
Total subscribers exceeded 104 million, an increase of 16% over the same period last year.
On 4 January 2011, OTH sold its entire shareholding in Orascom Tunisia Holding and
Carthage Consortium through which OTH owned 50% of Orascom Telecom Tunisia (“OTT”)
for a total cash consideration of US$ 1.2 billion. The financial figures for Q1 2010 have been
restated accordingly. Taking into consideration the 20% tax on capital gains in Tunisia and
its associated investment cost, OTH recognized a gain of US$ 754 million on the
transaction. As a result Net Income before minority interest for the first quarter of 2011
stood at US$ 822 million; displaying a sharp increase compared to the same period of the
previous year. Net income attributable to equity holders for the first quarter of 2011 was US$
813 million.
Revenues reached US$ 949 million1, increasing by 5% over the same period last year as a
result of strong growth in all GSM operations.
EBITDA reached US$ 437 million1, an increase of 11% compared to the same period last
year, demonstrating a solid performance across all the GSM subsidiaries.
Group EBITDA margin stood at 46%, an increase of 2% compared to Q1 2010. EBITDA
margins for the major subsidiaries were: Djezzy 59.4%, Mobilink 40.3% banglalink 35.7%, and
koryolink 87.6%.
Earnings per GDR reached US$ 0.78/GDR (based on a weighted average for the
outstanding GDRs of 1,046 million over 3M 2011)2.
Net Debt as of March 31, 2011 stood at US$ 3,078 million, a decrease of 23% compared to 31
December 2010; with a Net Debt/EBITDA of 1.9x.
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, 045,864,753 as of March 31st, 2011.
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Orascom Telecom Holding Q1 – 2011 P a g e | 4
“OTH still upholds its aim to develop further
growth through the opportunities offered by
the combination of its parent company,
WIND TELECOM, and VimpelCom Ltd.”
Khaled Bichara, Executive Chairman, commented on the results:
“The eventful year of 2010 has been
exceeded by a solid first quarter for
2011, meeting our expectations for
excellent performance despite the
difficulties we encountered in some
of our operating countries.
The political circumstances in Egypt
had a noticeable impact on the performance for
Mobinil, where the forced shut-down of voice and
data services for several days
led to declining ARPU and
usage. In addition, Orascom
Telecom Holding, which is
based in Cairo witnessed
business interruptions during
the period of unrest, and continues to remain
resilient and optimistic in light of the resulting
country-wide economic and political pressures.
The extreme situation in Algeria continues to
hinder the growth for Djezzy; restrictions on foreign
currency transfers, import bans and advertising
bans on government-owned television have been
countered to the extent possible by effective cost
management in the Algerian business unit.
Nevertheless, subscribers still witnessed an increase
capturing over 58% of the market in Algeria.
Revenues showed a 6% growth compared to the
first quarter of 2010, while EBITDA grew by 14%. Still,
the rising hostility within OTA‟s operating
environment maintains its grip on business growth
and development, as well as poses a threat to
operations, which OTA has made all best efforts to
curtail by the launch of 2 (albeit highly restricted)
promotions.
On a more positive note, the remaining operations
have displayed impressive growth for the quarter.
Our business in North Korea has surpassed the half
a million subscriber mark after 2 years of its launch.
The massive increase in koryolink‟s customer base
has translated into an equally tremendous growth
in revenues.
In keeping with the high subscriber growth trend,
our Bangladeshi operation not only increased its
customers by 42%
compared to the previous
year, but also showed
revenue growth of 27%
YoY.
Mobilink remains as the
market leader in Pakistan introducing new
innovative offers attracting customers and growing
its base by 4% compared to Q1 2010.
In Canada, WIND Mobile subscribers have
exceeded a quarter of a million by the end of the
first quarter of 2011, proving a testament to the
uptake of the operation‟s innovative plans and
offers by the Canadian customers.
The company focuses its efforts on developing its
operations to the fullest in order to fulfil its promise
to maximize shareholder value. With EPS now
reaching $0.78/GDR, a remarkable increase
compared to Q1 2010, OTH still upholds its aim to
develop further growth through the opportunities
offered by the combination of its parent
company, WIND TELECOM, and VimpelCom Ltd.”
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Orascom Telecom Holding Q1 – 2011 P a g e | 5
Operational Performance
Subscribers
The first quarter of 2011 displayed steady growth of
Orascom Telecom‟s customer base reaching over
104 million subscribers amounting to a 16% increase
compared to Q1 2010. For comparative purposes,
subscriber base for Q1 2010 and YE 2010 have been
adjusted to reflect the sale of Tunisiana.
In Algeria, Djezzy customers increased 5% YoY
despite the overwhelming obstacles that Djezzy has
been encountering over the course of the past
year, including restrictions on SIM imports, foreign
currency transfer and advertising on government TV
channels. Djezzy managed to acquire new pre-paid
and post-paid customers despite these imposed
operational limitations, as well as new restrictions set
by the regulator concerning all operators, and
limiting their promotional activities.
Mobilink maintained its growth in customer base,
increasing by almost 4% compared to the previous
year, targeting new subscribers, with a focus on the
youth segment and mobile number portability
(MNP).
In keeping with the strong subscriber growth trend,
banglalink increased its subscribers by almost 42%
compared to Q1 2010, as a result of aggressive
acquisition policies coupled with customer retention
efforts.
Telecel Globe subscribers increased by 49%
compared to the same period last year, despite
increasing competition and price wars in its markets.
The subscribers of koryolink have surpassed half a
million, showing a tremendous increase compared
to Q1 2010.
Under the management contract of Alfa, customer
base has witnessed a 27% increase over the
previous year, maintaining steady growth well
above the 1 million subscriber mark.
Table 1: Total Subscribers
1. Including Zimbabwe.
2. After excluding Tunisiana subscribers in March 2010 and December 2010.
Subsidiary31 Mar.
2010
31 Dec.
2010
31 Mar.
2011
Inc/(dec)
Mar. 2010 vs.
Mar. 2011
Djezzy (Algeria) 14,790,372 15,087,393 15,509,202 4.9%
Mobilink (Pakistan) 31,572,181 31,794,292 32,706,945 3.6%
banglalink (Bangladesh) 14,219,447 19,327,005 20,126,537 41.5%
Telecel Globe 2,280,369 3,242,000 3,385,968 48.5%
koryolink (DPRK) 125,661 431,919 535,133 n.m.
Alfa (Lebanon) 1,088,626 1,342,385 1,379,034 26.7%
Total 64,076,656 71,224,994 73,642,819 14.9%
Operations accounted for under
the equity method
31 Mar.
2010
31 Dec.
2010
31 Mar.
2011
Inc/(dec)
Mar. 2010 vs.
Mar. 2011
Mobinil (Egypt) 26,121,394 30,224,888 30,358,000 16.2%
Wind Canada (Canada) 232,641 271,659 n.a.
Total 26,121,394 30,457,529 30,629,659 17.3%
Grand Total 90,198,050 101,682,523 104,272,478 15.6%2
1
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ARPU
In Algeria, ARPU increased almost 2% due to the
voluntary disconnection of inactive customers from
the post-paid base as a backlog from 2010.
In Pakistan, in early March, a fire outbreak caused a
12-18 hour outage on Mobilink‟s network in
Islamabad. Despite the network outage, and in
addition to tariff cuts, Mobilink managed to mitigate
the situation with ARPU remaining stable compared
to Q1 2010 in US$ terms, while declining by only 2%
in local currency terms.
In Bangladesh, the aggressive subscriber acquisition
and penetration of lower segment customers
caused a dilution of 14% in ARPU.
The strong subscriber growth trend in North Korea
led to ARPU dilution of 40%.
Mobinil experienced an ARPU dilution over Q1 2010
due to a highly competitive environment which put
significant pressure on tariffs. In addition, Q1 2011
was heavily impacted by the prevalent political and
economic uncertainty following nation-wide
uprisings in January and February.
WIND Canada responded to competitive pressures
leading to a drop in tariffs, and consequently
decreasing ARPU compared to the previous
quarter.
The increase in Alfa‟s subscriber base had a dilutive
impact on ARPU in comparison to the same period
last year.
Table 2: Blended Average Revenue Per User (ARPU)1
Table 3: Blended Average Revenue Per User (ARPU) (Local Currency)
1. After excluding Tunisiana subscribers in March 2010 and December 2010.
2. ARPU expressed under OTH‟s definition may differ from Mobinil‟s disclosed ARPU. Please see Appendix for definition.
3. Global ARPU is calculated on a year to date basis, taking into account the weighted average subscribers for calculation.
Subsidiary
31 Mar. 2010
US$
(3 months)
31 Dec.
2010
US$
(3 months)
31 Mar.
2011
US$
(3 months)
Inc/(dec)
Mar. 2011 vs.
Mar. 2010
Djezzy (Algeria) 9.2 9.7 9.4 1.8%
Mobilink (Pakistan) 2.8 2.9 2.8 (0.0%)
Mobinil (Egypt) 5.6 4.9 4.5 (19.6%)
banglalink (Bangladesh) 2.3 2.1 2.0 (14.3%)
koryolink (DPRK) 21.3 14.6 12.7 (40.5%)
Wind Canada (Canada) 30.0 27.4 n.a.
Alfa (Lebanon) 37.5 38.3 35.3 (5.9%)
Global ARPU (YTD) 4.7 4.5 4.3 (8.2%)
Global ARPU (3 months) 4.7 4.5 4.3 (8.2%)
Subsidiary
31 Mar.
2010
(3 months)
31 Dec.
2010
(3 months)
31 Mar.
2011
(3 months)
Inc/(dec)
Mar. 2011 vs.
Mar. 2010
Djezzy (Algeria) (DZD) 679.1 724.1 683.1 0.6%
Mobilink (Pakistan) (PKR) 239.6 244.6 234.9 (2.0%)
2
3
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Orascom Telecom Holding Q1 – 2011 P a g e | 7
Market Share & Competition
Most of Orascom Telecom‟s operators are market
leaders, and maintain their secured positions in their
markets. banglalink remains at a favoured second
position in the Bangladeshi market.
Despite extreme conditions in Algeria, Djezzy
succeeded in regaining its share of the Algerian
telecommunications market, showing a slight
increase over the previous quarter thanks to active
churn management. Efforts remain obstructed by a
variety of severe challenges posed to Djezzy,
including restrictions on SIM imports, foreign currency
transfer and advertising on government TV channels.
Mobilink‟s market leadership was maintained. The
market share of active subscribers as measured
internally on traffic patterns stood at 39% as of
March 31, 2011.
banglalink still remains in second position in the
market in Bangladesh, however the operator
witnessed a slight decrease in market share as a
result of the halting of SIM Tax subsidies for Q1 2011,
causing an increase in SIM card prices.
4: Market Share & Competition Table
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 March 2011 had not been disclosed by the Pakistani Regulator prior to this release.
31 Dec
2010
31 Mar.
2011
Algeria Djezzy 57.6% 58.1% 1 AMN, Qtel
Pakistan Mobilink 31.4% n.a. 1 U-Fone, Paktel, Telenor,
Al Warid
Bangladesh banglalink 28.5% 27.6% 2 Grameen, Aktel, Citycell,
BTTB, Airtel
Country Brand nameMarket
Position
Names of additional
network operations
Market Share (%)
1 2
1
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CAPEX
Total consolidated capital expenditures for the
three months to March 31st, 2011 declined by 47%
compared to the previous year.
Djezzy‟s CAPEX has declined 92% in comparison to
the same period last year, mostly due to the
wrongful ban on overseas foreign currency
transfers by OTA, which is preventing the payment
of essential suppliers and creditors, the import of
essential equipment, and the undertaking of
critical network maintenance.
In Pakistan, CAPEX was increased by 88% in order
to focus on network and IT development for
Mobilink in 2011.
banglalink‟s CAPEX decreased by 78% in
comparison to the company‟s aggressive rollout
plan for the same period last year.
The 31% decline in “Other” CAPEX compared to
the three months of 2010 is related to investments
in Telecel Globe, koryolink and our submarine
cables.
Table 5: Capital Expenditure of OTH Subsidiaries for the three months to March 31st
1. “Other” companies include CHEO, Intouch, Mena-Cable, OT Holding, Ring and Telecel Globe.
Country Service name
Total
US$ million
2010
Total
US$ million
2011
Inc/(dec)
Algeria Djezzy 48 4 (92%)
Pakistan Mobilink 24 45 88%
Bangladesh banglalink 59 13 (78%)
Other 42 29 (31%)
Total Consolidated 173 91 (47%)
Consolidated Capex/Sales 19.2% 9.6% (10%)
1
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Orascom Telecom Holding Q1 – 2011 P a g e | 9
Main Financial Events
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.
In September 2010, OTH announced that OTA received a preliminary tax notification from 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). In December, OTA received the Final Tax Reassessment for
the aforementioned amount. In February, OTA paid the equivalent of USD 230 million to the Algerian tax authority under
protest, representing the settlement in full of the 2008-2009 Tax Reassessment.
OTH and OTA consider that the 2008-2009 Tax Reassessment is baseless, relying on the same arbitrary measures as the tax
claims made in relation to preceding years. Accordingly, OTA challenged the 2008-2009 Tax Reassessment with the tax
administration and the Algiers administrative court, however its challenge was rejected by the tax authority in May 2011.
This appeal should have entitled OTA to defer payment of 80% of the claim, subject only to the provision of financial
guarantees. However the Algerian tax authorities refused to consider any of the guarantees offered by OTA (including ful l
cash collateral) and OTA had no choice but to pay in full in order to avoid coercive enforcement action and/or risk
incurring additional penalties.
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.
* Based on an exchange rate of: USD 1 = DZD 73.6.
Orascom Telecom Holding Sells its 50% Shareholding in Tunisiana to Qatar Telecom
In November 2010, Orascom Telecom Holding S.A.E. (“OTH”) announced that it has entered into a share purchase
agreement with Qatar Telecom Q.S.C. (“Qtel”) by which OTH would sell its entire shareholding in Orascom Tunisia Holdings
(“OTuH”) and Carthage Consortium (“Carthage”), two companies through which OTH owns 50% of Orascom Telecom
Tunisie (“Tunisiana”).
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In January 2011, OTH announced that it had completed the sale of its entire shareholding in OTuH and Carthage for a total
cash consideration of US$ 1.2 billion, corresponding to an enterprise value equal to 6.7 times Tunisiana‟s 2009 EBITDA and
generating over 40% annual return on OTH‟s investment in the business since 2003.
Proceeds will be used to strengthen OTH‟s liquidity position and support the development of higher-growth businesses.
OTH Lenders Support Further Financial Flexibility
In January 2011, Orascom Telecom Holding S.A.E. (“OTH”) announced that it has successfully obtained the support of its
Senior Secured Lenders for relief from representations, warranties, and covenants in the credit agreements as they relate to
Orascom Telecom Algeria (“OTA”), in order to provide the Group with greater flexibility while it assesses its alternative
options relating to OTA and enabling OTH to be in a position to negotiate effectively with the Algerian government to
procure the most favourable outcome relating to Algeria in order to protect its interest and that of its stakeholders.
Furthermore, part of the Orascom Telecom Tunisie (“Tunisiana”) disposal proceeds would be applied to prepay principal
maturities, eliminating debt repayment obligations until the second half of 2012. Consequently, the Group significantly
strengthened its liquidity position and financial flexibility.
OTH Extends its Management Contract of Alfa in Lebanon for Another Year
In March 2011, Orascom Telecom Holding S.A.E. (“OTH”) announced that it signed an extension to the management
contract of the Lebanese mobile telecommunications operator “Alfa” with the Republic of Lebanon for one year
commencing on February 1st, 2011.
The terms of the new contract remain the same as the previous one, whereby OTH receives a monthly sum of USD 2.5
Million in addition to 8.5% of total revenues. Out of these amounts OTH is liable to cover all the operational expenses (OPEX)
of the network and is entitled to keep the remainder as management fees. The Republic of Lebanon is fully responsible for
the CAPEX during the contract period.
The renewal of the contract will allow OTH to complete its plans for the future development of mobile phone services in
Lebanon, the most important of which is the deployment of the third generation "3G" services, the expansion of Alfa‟s
network coverage to new areas, and the promotion of spreading telecommunication services all over the country
VimpelCom combines with WIND TELECOM to create new global telecom group
In October 2010, WIND TELECOM S.p.A (WIND TELECOM), 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 sixth largest mobile telecommunications carrier by subscribers. In March 2011, WIND TELECOM announced that the
shareholders of VimpelCom Ltd. voted in their Special General Meeting in favor of the combination with WIND TELECOM.
On April 15th, 2011, VimpelCom and WIND TELECOM announced the closing of the transaction that combines the two
entities to create a new global telecom group.
Over 97% of The Voting Shares that Participated in OTH’s OGM/EGM Approve Demerger and
Refinancing Plan
On April 14th, 2011, Orascom Telecom Holding S.A.E. (“OTH” or the “Company”) announced that the Company‟s
shareholders overwhelmingly approved all of the items on the agenda of the Ordinary and Extraordinary General
Assembly Meetings, paving the way to implement the Company‟s refinancing plan and the demerger of the Company
into two separate entities, Orascom Telecom Holding S.A.E. and Orascom Telecom Media and Technology Holding S.A.E.,
in connection with the “VimpelCom-WIND TELECOM” transaction.
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Shareholders approved the following significant resolutions, among others:
1. the approval of a refinancing plan to refinance the Company‟s outstanding secured and high yield debt together with
certain derivative transactions in an amount of approximately US$2.7BN.
2. an increase in OTH‟s authorized share capital to EGP 14BN (with the issued and paid-in capital remaining unchanged).
3. the approval of the planned demerger from OTH of Orascom Telecom Media and Technology Holding S.A.E. (“OTMT”),
a company to be formed at the time of the demerger. OTMT will hold certain assets of OTH that are not intended to form
part of the VimpelCom-WIND TELECOM group going forward, including OTH‟s interests in Egyptian Company for Mobile
Services (“ECMS”), CHEO Technology Joint Venture company (“koryolink”) in North Korea, Orascom Telecom Ventures
S.A.E. (formerly Intouch Communication Services S.A.E.), as well as other investments in the media and technology sectors,
including undersea cable assets.
Shareholders representing 63.44% of the Company‟s voting shares participated in the Ordinary General Assembly Meeting
and 63.44% at the Extraordinary General Assembly Meeting. The resolutions were approved by 99.99% of the voting shares
that participated in the Ordinary General Assembly Meeting and approximately 97% at the Extraordinary Assembly
Meeting.
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Financial Review
Revenues
Total Consolidated Revenues increased 5% in
comparison to Q1 2010, driven by a solid
performance in GSM revenues, which were up by
9% YoY.
Djezzy‟s revenues saw an increase of 6% compared
to Q1 2010. The increase does not signify an
alleviation of the operational and financial burdens
currently facing the Algerian unit, but is mostly
attributed to the increase in subscribers over the
last year; in addition to a weak performance in Q1
2010 as a result of the riot events that occurred
following the football match in November 2009.
The revenues of Mobilink for the first quarter of 2011
showed a 1% increase compared to the same
period last year. Due to the devaluation of the
local currency against the US$, Mobilink‟s revenues
grew by 4% in local currency terms. The healthy
growth in revenues comes as a result of a growing
subscriber base, as well as successful uptake of VAS
bundles.
In Bangladesh, revenues of banglalink increased by
27% YoY thanks to strong subscriber growth and
acquisition promotions.
Telecel Globe saw a 2% increase in its revenues
compared to the same period last year. The
growth in revenues was slowed by competitive
pressures in Burundi.
koryolink's growing customer base resulted in
tremendous revenue growth in comparison to Q1
2010.
The 7% YoY increase in “Other” Telecom Services is
attributed to growth in subscribers of OT Lebanon
(Alfa Management Contract).
Table 6: Consolidated Revenues1
1. On 4 January 2011, OTH sold its entire shareholding in Orascom Tunisia Holding and Carthage Consortium through which OTH owned 50% of Orascom Telecom Tunisia
(“OTT”). Q1 2010 figures are represented accordingly.
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 Q1 2010 are represented accordingly.
3. Other Telecom Services Companies include OT Lebanon and TWA in Q1 2010 and OT Lebanon, Mena Cable and TWA in Q1 2011.
4. As per IFRS rules, Internet Services‟ figures have not been represented in Q1 2010 and Q4 2010 to reflect the disposal of LINKdotNET and LINK Egypt in Q3 2010.
Subsidiary
Represented
31 March.
2010
US$ (000)
31 March
2011
US$ (000)
Inc/
(dec)
Q4 - 2010
(3 months)
US$ (000)
Q1 - 2011
(3 months)
US$ (000)
Inc/
(dec)
GSM
Djezzy (Algeria) 412,524 438,585 6.3% 452,915 438,585 (3.2%)
Mobilink (Pakistan) 272,262 275,383 1.1% 280,869 275,383 (2.0%)
banglalink (Bangladesh) 99,653 126,210 26.6% 122,284 126,210 3.2%
Telecel Globe (Africa) 24,172 24,646 2.0% 25,007 24,646 (1.4%)
koryolink (North Korea) 9,029 25,761 185.3% 24,757 25,761 4.1%
Total GSM 817,640 890,585 8.9% 905,833 890,585 (1.7%)
Telecom Services
Ring 35,054 23,040 (34.3%) 37,506 23,040 (38.6%)
Other 25,113 26,875 7.0% 27,912 26,875 (3.7%)
Total Telecom Services 60,167 49,915 (17.0%) 65,419 49,915 (23.7%)
Internet Services 23,767 8,748 (63.2%) 8,780 8,748 (0.4%)
Total Consolidated 901,574 949,249 5.3% 980,031 949,249 (3.1%)
3
2
4 4
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Total GSM Revenues
Consolidated revenues for the first quarter of 2011
showed a 3% decline compared to Q4 2010, mostly
impacted by a 2% drop in GSM revenues QoQ.
It is worth noting that the decline in revenues from
Q4 2010 to Q1 2011 is mainly due to seasonal
factors as Q1 is traditionally the weaker quarter.
Consequently, operations in Algeria and Pakistan
witnessed seasonal declines in their revenues,
dropping 3% and 2% respectively. With regards to
Mobilink, revenues in local currency terms
remained stable as a result of the devaluation of
the PKR against the US$.
A 3% increase in banglalink‟s revenues for Q1 2011
compared to the previous quarter was achieved in
light of higher pre-paid revenues.
Despite aggressive competitive pressures in Burundi
leading to tariff reductions, in addition to QoQ
seasonal effects, Telecel Globe‟s revenues
decreased by only 1% compared to Q4 2010.
Revenues for koryolink increased 4% in comparison
to Q4 2010 as a result of subscriber growth. The
increase in revenues was slightly curtailed by lower
ARPU and usage.
Table 7: Proforma Consolidated Revenues (Local Currency)1
1. Un-audited Figures.
Represented 31 March.2010
US$ (000)
31 March2011
US$ (000)
413 439
272275
100126
2425
926
koryolink (North Korea)
Telecel Globe (Africa)
banglalink (Bangladesh)
Mobilink (Pakistan)
Djezzy (Algeria)
818891
31 Mar.
2010
31 Mar.
2011
Inc/
(dec)Q4 - 2010 Q1 - 2011
Inc/
(dec)
(3 months) (3 months)
GSM
Djezzy (Algeria) (DZD bn) 30.4 32.0 5.3% 32.8 32.0 (2.6%)
Mobilink (Pakistan) (PKR bn) 23.1 24.0 3.9% 23.9 24.0 0.2%
Subsidiary
9%
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EBITDA
Consolidated EBITDA increased by 11% compared to
the same period last year, positively impacted by
strong GSM EBITDA growth of 14.5% YoY.
The Algerian unit witnessed a 14% increase in EBITDA
in comparison to Q1 2010, mostly resulting from
higher revenues and reversal of bad debt provisions.
Mobilink‟s EBITDA showed an increase of 5% in US$
terms, corresponding to 11% in local currency terms,
as a result of higher revenues in addition to lower
interconnect costs.
In Bangladesh, the EBITDA of banglalink increased
6% YoY, attributed to increased revenues even
though marketing expenses increased due to high
subscribers‟ growth and SIM tax costs.
Telecel Globe‟s EBITDA increased 19% compared to
the same period last year as a result of subscriber
growth and OPEX savings. Following the same
pattern of increased subscribers and lower OPEX, the
EBITDA of koryolink showed significant growth in
comparison to Q1 2010.
Table 8: Consolidated EBITDA1, 2
1. EBITDA excludes management fees which were previously treated as a cost in each subsidiary and as a revenue for the Holding.
2. On 4 January 2011, OTH sold its entire shareholding in Orascom Tunisia Holding and Carthage Consortium through which OTH owned 50% of Orascom Telecom Tunisia
(“OTT”). Q1 2010 figures are represented accordingly.
3. 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 Q1 2010 are represented accordingly.
4. Other Telecom Services Companies include: C.A.T., MedCable, Mena Cable, OT Lebanon, TWA, and OTWIMAX.
5. As per IFRS rules, Internet Services‟ figures have not been represented in Q1 2010 and Q4 2010 to reflect the disposal of LINKdotNET and LINK Egypt in Q3 2010.
6. Other non operating companies include: OTH, OTV, OIIH, OTI Malta, Cortex, Eurasia, FPPL, IWCPL, Moga, Oratel, OT Finance, Swyer, OT Holding Canada, OT Asia, Oscar, OT
ESOP, OT Services Europe, TMGL, Pioneers, OT Wireless Europe, TIL and TILSA.
Subsidiary
Represented
31 March.
2010
US$ (000)
31 March
2011
US$ (000)
Inc/
(dec)
Q4 - 2010
(3 months)
US$ (000)
Q1 - 2011
(3 months)
US$ (000)
Inc/
(dec)
GSM
Djezzy (Algeria) 229,415 260,639 13.6% 241,357 260,639 8.0%
Mobilink (Pakistan) 105,772 111,009 5.0% 111,223 111,009 (0.2%)
banglalink (Bangladesh) 42,592 45,048 5.8% 30,772 45,048 46.4%
Telecel Globe (Africa) 3,612 4,285 18.6% 6,643 4,285 (35.5%)
koryolink (North Korea) 5,849 22,562 n.m. 31,611 22,562 (28.6%)
Total GSM 387,239 443,542 14.5% 421,605 443,542 5.2%
Telecom Services
Ring 6,298 (3,937) n.m. (6,383) (3,937) 38.3%
Other 5,484 4,480 (18.3%) 4,246 4,480 5.5%
Total Telecom Services 11,781 543 (95.4%) (2,137) 543 n.m.
Internet Services 4,243 808 (81.0%) 2,293 808 (64.8%)
OT Holding & Other (10,389) (8,292) 20.2% (19,518) (8,292) 57.5%
Total Consolidated 392,875 436,600 11.1% 402,243 436,600 8.5%
4
6
3
3
5
5
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Orascom Telecom Holding Q1 – 2011 P a g e | 15
Total GSM EBITDA
Consolidated EBITDA increased by almost 9%
compared to the previous quarter, with GSM EBITDA
illustrating a 5% increase QoQ.
In Algeria, EBITDA increased by 8% QoQ, mainly as a
result of a VAT provision related to the 2008-09 tax
claim booked in Q4 2010 amounting to
approximately US$ 34 million.
In Pakistan, the EBITDA of Mobilink remained stable
QoQ in US$ terms, while EBITDA in local currency
terms showed an increase of 6% compared to the
previous quarter. The increase is a result of lower
OPEX.
The EBITDA of banglalink showed an increase of 46%
compared to the previous quarter which is
attributable to the removal of SIM Tax subsidies for
Q1 2011 and dealer commission savings.
Telecel Globe‟s EBITDA declined by almost 36% as a
result of both strong competitive pressure in Burundi
and heightened socio-political tension arising from
elections in the Central Republic of Africa (CAR),
causing a country-wide economic slowdown.
Moreover, increased international incoming traffic in
CAR led to higher taxes.
koryolink's EBITDA showed a 29% drop QoQ due to a
reversal of several provisions that were undertaken in
Q4 2010.
Table 9: Proforma Consolidated EBITDA (Local Currency)1
1. Un-audited Figures.
Represented 31 March.2010
US$ (000)
31 March2011
US$ (000)
229261
106
111
43
454
4
6
23
koryolink (North Korea)
Telecel Globe (Africa)
banglalink (Bangladesh)
Mobilink (Pakistan)
Djezzy (Algeria)
387443
31 Mar.
2010
31 Mar.
2011
Inc/
(dec)Q4 - 2010 Q1 - 2011
Inc/
(dec)
(3 months) (3 months)
GSM
Djezzy (Algeria) (DZD bn) 17.0 19.0 11.8% 17.3 19.0 9.8%
Mobilink (Pakistan) (PKR bn) 9.0 10.0 11.1% 9.4 10.0 6.0%
Subsidiary
14.5
%
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Orascom Telecom Holding Q1 – 2011 P a g e | 16
EBITDA MARGIN
The EBITDA margin for the group stood at 46%
representing a 2% increase over the same period
last year.
Djezzy‟s margin increased by 4% compared to Q1
2010 as a result of efficient cost management in
order to counter the adverse effect of the
continued hurdles and restrictions which the
operation is facing.
The EBITDA margin of Mobilink displayed a 1.5%
increase in comparison to the same period last year
mainly attributed to cost control efforts.
The increase in banglalink‟s subscriber base resulted
in higher marketing and SIM tax costs, leading to a
decrease of 7% in the EBITDA margin YoY.
Telecel Globe witnessed a 2% increase in its margin
for Q1 2011 in comparison to Q1 2010 due to cost
management.
The EBITDA margin of koryolink grew 23% mainly as a
result of higher subscriber figures and revenues.
Table 10: Consolidated EBITDA Margin
1. As per IFRS rules, Internet Services‟ figures have not been represented in Q1 2010 and Q4 2010 to reflect the disposal of LINKdotNET and LINK Egypt in Q3 2010.
Subsidiary
Represented
31 March.
2010
US$ (000)
31 March
2011
US$ (000)
Change
Q4 - 2010
(3 months)
US$ (000)
Q1 - 2011
(3 months)
US$ (000)
Change
GSM
Djezzy (Algeria) 55.6% 59.4% 3.8% 53.3% 59.4% 6.1%
Mobilink (Pakistan) 38.8% 40.3% 1.5% 39.6% 40.3% 0.7%
banglalink (Bangladesh) 42.7% 35.7% (7.0%) 25.2% 35.7% 10.5%
Telecel Globe (Africa) 14.9% 17.4% 2.4% 26.6% 17.4% (9.2%)
koryolink (North Korea) 64.8% 87.6% 22.8% 127.7% 87.6% (40.1%)
Total GSM 47.4% 49.8% 2.4% 46.5% 49.8% 3.3%
Total Telecom Services 19.6% 1.1% (18.5%) (3.3%) 1.1% 4.4%
Internet Services 17.9% 9.2% (8.6%) 26.1% 9.2% (16.9%)
EBITDA Margin 43.6% 46.0% 2.4% 41.0% 46.0% 5.0%
1
1
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Orascom Telecom Holding Q1 – 2011 P a g e | 17
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
Net Income before minority interest for the first quarter of
2011 stood at US$ 822 million. Net income attributable to
equity holders for the first quarter of 2011 was US$ 813
million.
On 4 January 2011, OTH sold its entire shareholding in
Orascom Tunisia Holding and Carthage Consortium
through which OTH owned 50% of Orascom Telecom
Tunisia (“OTT”) for a total cash consideration of US$ 1.2
billion. The financial figures for Q1 2010 have been
restated accordingly. Taking into consideration the 20%
tax on capital gains in Tunisia and its associated investment
cost, OTH recognized a gain of US$ 754 million on the
transaction.
The proceeds of the sale were used to strengthen OTH‟s
liquidity position, consequently leading to a Net Debt of US$
3,078 million, a decrease of 23% compared to 31
December 2010.
EPS in the 3 months ended March 31, 2011 stood at US$
0.78/GDR.
% Chg 3
% Chg 3
Currency Mar. 10 Dec. 10 Mar. 11 Mar. 11 vs Mar. 11 vs
Mar. 10 Dec. 10
Egyptian Pound/USD
Income Statement 5.5043 5.6359 5.8763 6.3 4.1
Balance Sheet 5.5260 5.8057 5.9625 7.3 2.6
Algerian Dinar/USD
Income Statement 73.5749 73.9910 73.0075 (0.8) (1.3)
Balance Sheet 73.7159 74.2862 72.0652 (2.3) (3.1)
Pakistan Rupee/USD
Income Statement 84.7466 85.1836 85.4958 0.9 0.4
Balance Sheet 84.2733 85.6721 85.2594 1.2 (0.5)
Bangladeshi Taka/USD
Income Statement 69.6100 69.6256 71.3934 2.5 2.5
Balance Sheet 69.6800 70.5983 72.6649 4.1 2.8
Canadian Dollar/USD
Income Statement 0.9734 1.0297 0.9857 1.2 (4.5)
Balance Sheet 0.9954 0.9970 0.9703 (2.6) (2.8)
1
2
1
2
1
2
1
2
1
2
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Orascom Telecom Holding Q1– 2011 P a g e | 18
Table 12: Income Statement in IFRS/US$
1- Management Presentation developed from IFRS financials.
2- Mainly due to the impairment of Telecel Globe‟s investment in Namibia.
3- 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 Q4
2010.
4- Due to the impairment of Orabank, a financial receivable related to North Korea.
5- Due to the impairment of deferred taxes associated with the impairment of Telecel Globe‟s investment in Namibia
6- Q1 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.
7- On 4 January 2011, OTH sold its entire shareholding in Orascom Tunisia Holding and Carthage Consortium through which OTH owned 50% of Orascom Telecom Tunisia (“OTT”).
8- Equates to Net Income after Minority Interest.
9- Based on a weighted average for the outstanding number of GDRs of 1, 045,864,753 GDRs as of 31 March 2011. The weighted average for the outstanding number of GDRs for Q1 2010
and Q4 2010 is 920,681,875 GDRs and1,015,240,054 GDRs respectively.
Represented
31 March.
2010
31 March
2011
Inc/
(dec)Q4 - 2010 Q1 - 2011
Inc/
(dec)
US$ (000) US$ (000)(3 months)
US$ (000)
(3 months)
US$ (000)
Revenues 901,574 949,249 5% 980,031 949,249 (3%)
Other Income 9,220 9,058 6,722 9,058
Total Expense (517,919) (521,706) (584,510) (521,706)
EBITDA 392,875 436,600 11% 402,243 436,600 9%
Depreciation & Amortization (185,388) (194,802) (236,226) (194,802)
Impairment of Non Current Assets (3,747) (1,009) (79,936) (1,009)
Gain (Loss) on Disposal of Non Current
Assets(190) (1,268) 1,475 (1,268)
Operating Income 203,551 239,522 18% 87,557 239,522 174%
Financial Expense (133,536) (113,937) (101,186) (113,937)
Financial Income 16,514 21,008 (1,845) 21,008
Foreign Exchange Gain (Loss) 6,940 32,928 8,913 32,928
Net Financing Cost (110,082) (60,001) (94,118) (60,001)
Share of Profit (Loss) of Associates (33,692) (41,167) (36,071) (41,167)
Impairment of Financial Assets - (9,448) (48,129) (9,448)
Profit Before Tax 59,777 128,906 116% (90,761) 128,906 n.m.
Income Tax (44,755) (61,564) (84,617) (61,564)
Profit from Continuing Operations 15,022 67,342 n.m. (175,378) 67,342 n.m.
Gains or losses from discontinued
operations43,137 754,419 5,845 754,419
Profit for the Period 58,158 821,761 n.m. (169,533) 821,761 n.m.
Attributable to:
Equity Holders of the Parent 48,806 812,755 n.m. (178,834) 812,755 n.m.
Earnings Per Share (US$/GDR) 0.05 0.78 n.m. (0.17) 0.78 n.m.
Minority Interest 9,352 9,006 9,301 9,006
Net Income 58,158 821,761 n.m. (169,533) 821,761 n.m.
2
1
5
7 6
3
8
4
9
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Orascom Telecom Holding Q1– 2011 P a g e | 19
Table 13: Balance Sheet in IFRS/US$
1- On 4 January 2011, OTH sold its entire shareholding in Orascom Tunisia Holding and Carthage Consortium through which OTH owned 50% of
Orascom Telecom Tunisia (“OTT”). Q1 2010 figures are represented accordingly.
2- 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
2010
31 March
2011
US$ (000) US$ (000)
Assets
Property and Equipment (net) 3,763,337 3,675,560
Intangible Assets 1,486,654 1,469,014
Investment in Associates 1,029,288 935,586
Other Non-Current Assets 1,104,785 1,304,427
Total Non-Current Assets 7,384,063 7,384,587
Cash and Cash Equivalents 824,080 773,962
Trade Receivables 258,819 269,082
Assets Held for Sale 422,601
Other Current Assets 1,090,906 1,401,407
Total Current Assets 2,596,406 2,444,451
Total Assets 9,980,469 9,829,037
Equity Attributable to Equity Holders of the Company 2,724,843 3,575,775
Minority Share 76,354 90,146
Total Equity 2,801,198 3,665,921
Liabilities
Long Term Debt 3,859,425 3,181,218
Other Non-Current Liabilities 354,223 377,226
Total Non-Current Liabilities 4,213,648 3,558,444
Short Term Debt 973,449 670,351
Trade Payables 811,438 777,132
Other Current Liabilities 1,180,737 1,157,189
Total Current Liabilities 2,965,624 2,604,672
Total Liabilities 7,179,271 6,163,116
Total Liabilities & Shareholder’s Equity 9,980,469 9,829,037
Net Debt 4,008,793 3,077,607
2
1
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Table 14: Cash Flow Statement in IFRS/US$
1- a) On 4 January 2011, OTH sold its entire shareholding in Orascom Tunisia Holding and Carthage Consortium through which OTH owned 50% of
Orascom Telecom Tunisia (“OTT”). Q1 2010 figures are represented accordingly.
b) Q1 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.
IFRS/US$ IFRS/US$
Represented
31 March
2010
31 March
2011
US$ (000) US$ (000)
Cash Flows from Operating Activities
Profit for the Period 15,022 67,342
Depreciation, Amortization & Impairment of Non-Current Assets 189,134 195,811
Income Tax Expense 44,755 61,564
Net Financial Charges 110,082 60,001
Share of Loss (Profit) of Associates Accounted for Using the Equity
Method33,692 41,167
Impairment of Financial Assets - 9,448
Other 9,224 2,663
Changes in Assets Carried as Working Capital (107,383) (312,702)
Changes in Other Liabilities Carried as Working Capital (26,803) (755)
Income Tax Paid (92,365) (62,172)
Interest Expense Paid (152,023) (58,071)
Net Cash Generated by Operating Activities 23,335 4,296
Cash Flows from Investing Activities
Cash Outflow for Investments in Property & Equipment, Intangible
Assets, and Financial Assets & Consolidated Subsidiaries(218,334) (245,136)
Proceeds from Disposal of Property & Equipment, Subsidiaries and
Financial Assets15,277 27,815
Advances & Loans made to Associates & other parties (109,992) (84,234)
Dividends & Interest Received 4,801 59,607
Net Cash Used in Investing Activities (308,248) (241,948)
Cash Flows from Financing Activities
Proceeds from loans, banks' facilities and bonds 80,979 86,305
Payments for loans, banks' facilities and bonds (587,479) (1,068,704)
Net Payments from financial liabilities - (20,638)
Net Change in Cash Collateral (2,780) 19
Dividend Payments - -
Payments for Treasury Shares (653) -
Capital injection 790,802 -
Change in non-controlling interest - -
Net Cash generated by Financing Activities 280,869 (1,003,018)
Discontinued operations
Net cash generated by operating activities 35,422 -
Net cash (used in) generated by investing activities (97,849) 1,176,058
Net cash (used in) generated by f inancing activities 34,723 -
Net cash generated from discontinued operations (27,704) 1,176,058
Net Increase in Cash & Cash Equivalents (31,748) (64,612)
Cash included in Assets Held for Sale (5,867) -
Effect of Exchange Rate Changes on Cash & Cash Equivalents (9,357) 14,494
Cash & Cash Equivalents at the Beginning of the Period 759,546 824,080
Cash & Cash Equivalents at the End of the Period 712,574 773,962
1
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Table 15: Income Statement in EAS/Egyptian Pounds
1- Management Presentation developed from EAS financials.
2- Based on a weighted average for the outstanding number of ordinary shares of 5,229,323,765 as of 31 March 2011. The weighted average for
the outstanding number of ordinary shares for Q1 2010 and Q4 2010 is 4,603,409,374 and 5,229,323,765 respectively.
Represented
31 March.
2010
31 March
2011
Inc/
(dec)Q4 - 2010 Q1 - 2011
Inc/
(dec)
LE (000) LE (000)(3 months)
LE (000)
(3 months)
LE (000)
Revenues 4,962,562 5,578,047 12% 5,562,524 5,578,047 0%
Other Income 50,749 52,946 38,238 52,946
Total Expense (2,871,390) (3,071,546) (3,308,495) (3,071,546)
EBITDA 2,141,921 2,559,447 19% 2,292,267 2,559,447 12%
Depreciation & Amortization (1,018,931) (1,143,435) (1,337,730) (1,143,435)
Other (21,625) (13,335) (442,377) (13,335)
Operating Income 1,101,366 1,402,677 27% 512,160 1,402,677 174%
Financial Expense (731,259) (665,936) (572,345) (665,936)
Financial Income 90,897 123,445 (10,562) 123,445
Foreign Exchange Gain (Loss) 38,199 193,495 49,030 193,495
Net Financing Cost (602,163) (348,996) (533,877) (348,996)
Share of Profit (Loss) of Associates (185,451) (158,040) (105,469) (158,040)
Impairment of Financial Assets (55,519) (55,519)
Profit Before Tax 313,752 840,122 168% (398,438) 840,122 n.m.
Income Tax (246,348) (365,790) (486,313) (365,790)
Profit from Continuing Operations 67,404 474,332 n.m. (884,751) 474,332 n.m.
Gains or losses from discontinued
operations319,903 4,450,587 15,494 4,450,587
Profit for the Period 387,307 4,924,919 n.m. (869,257) 4,924,919 n.m.
Attributable to:
Equity Holders of the Parent 316,149 4,871,995 n.m. (922,404) 4,871,995 n.m.
Earnings Per Share (EGP/Share) 0.07 0.93 n.m. (0.18) 0.93 n.m.
Minority Interest 71,158 52,924 53,147 52,924
Net Income 387,307 4,924,919 n.m. (869,257) 4,924,919 n.m.
1
2
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Orascom Telecom Holding Q1– 2011 P a g e | 22
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
2010
31 March
2011
LE (000) LE (000)
Assets
Property and Equipment (net) 21,710,070 21,778,049
Intangible Assets 8,584,912 8,711,685
Other Non-Current Assets 8,558,597 9,603,559
Total Non-Current Assets 38,853,579 40,093,293
Cash and Cash Equivalents 4,784,360 4,614,750
Trade Receivables 1,502,624 1,604,404
Assets Held for Sale 2,430,567 -
Other Current Assets 6,332,816 8,359,667
Total Current Assets 15,050,367 14,578,821
Total Assets 53,903,946 54,672,114
Equity Attributable to Equity Holders of the Company 12,246,749 17,844,032
Minority Share 458,581 552,772
Total Equity 12,705,330 18,396,804
Liabilities
Long Term Debt 22,314,854 18,877,084
Other Non-Current Liabilities 1,735,569 1,932,254
Total Non-Current Liabilities 24,050,423 20,809,338
Short Term Debt 5,639,775 3,985,475
Trade Payables 4,710,968 4,633,651
Other Current Liabilities 6,797,450 6,846,846
Total Current Liabilities 17,148,193 15,465,973
Total Liabilities 41,198,616 36,275,310
Total Liabilities & Shareholder’s Equity 53,903,946 54,672,114
Net Debt 23,170,269 18,247,809 2
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Orascom Telecom Holding Q1– 2011 P a g e | 23
Presence in Countries with Favourable Dynamics:
OTH serves a population of 517 million* with an average penetration of 51%
Note: Sovereign Ratings shown are Moody‟s/S&P.
Population Figures from CIA Factbook (est. March 2011).
Mobile Penetration is based on March 31, 2011 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)
PAKISTAN
Population: 184 million
GDP Growth: 4.2%
GDP/Capita PPP ($): 2,500
Pop. Under 15 years: 37%
Sovereign Rating: CCC
Mobile Penetration: 56%
EGYPT
Population: 80.5 million
GDP Growth: 4.7%
GDP/Capita PPP ($): 6,000
Pop. Under 15 years: 33%
Sovereign Rating: BB
Mobile Penetration: 97%
BANGLADESH
Population: 156 million
GDP Growth: 6%
GDP/Capita PPP ($): 1,700
Pop. Under 15 years: 35%
Sovereign Rating: NR
Mobile Penetration: 46%
NORTH KOREA
Population: 22.8 million
GDP Growth: 3.7%
GDP/Capita (PPP) ($): 1,900
Pop. Under 15 years: 21%
Sovereign Rating: NR
Mobile Penetration: 2% BURUNDI
Population: 9.9 million
GDP Growth: 3.5%
Pop. Under 15 years: 46%
Sovereign Rating: NR
Mobile Penetration: 20%
CENTRAL AFRICA REPUBLIC
Population: 4.8 million
GDP Growth: 1.7%
Pop. Under 15 years3: 41%
Sovereign Rating: NR
Mobile Penetration: 18%
NAMIBIA
Population: 2.1 million
GDP Growth: -0.8%
Pop. Under 15 years: 36%
Sovereign Rating: BBB
Mobile Penetration: 88%
ALGERIA
Population: 35 million
GDP Growth: 4.1%
GDP/Capita PPP ($): 7,400
Pop. Under 15 years: 25%
Sovereign Rating: NR
Mobile Penetration: 77%
CANADA
Population: 34 million
GDP Growth:-2.5%
GDP/Capita PPP ($): 38,200
Pop. Under 15 years: 16%
Sovereign Rating: AAA
Mobile Penetration: 70%
ZIMBABWE
Population: 11.7 million
GDP Growth: -1.3%
Pop. Under 15 years3: 44%
Sovereign Rating: NR
Mobile Penetration: 51%
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Orascom Telecom Holding Q1– 2011 P a g e | 24
Operational Overview
Djezzy – Algeria
Financial Data Operational Data
During the first quarter of 2011, Orascom Telecom
Algerie (OTA) continued to face various challenges due
to unfair and arbitrary actions from a number of
government authorities. The Bank of Algeria‟s
detrimental and unfounded decision issued in Q2 2010,
instructing the banks not to process any overseas foreign
currency transfer by OTA, is having devastating effects
on OTA‟s network and reputation. For example, it is
preventing the importation of goods which are
necessary for maintenance purposes and for network
capacity expansion. This factor continues to exert
significant pressure on the network especially in terms of
quality, capacity and expansion. This factor is also
prejudicing international roaming agreements and
jeopardizing the possibility of launching any new
products which would ultimately require new
technological platforms. Despite these major obstacles
OTA is seeking to serve its customers with the best
possible network quality.
Despite the challenges described above which are
having an increasingly harmful effect as time goes by,
OTA succeeded in managing a very challenging first
quarter of 2011 in the face of extreme adverse
conditions, closing with 15.5m subscribers, maintaining its
leadership position with 58% market share, controlling
the largest distribution across all 48 Wilayas and
operating the largest network with 7,527 BTS by the end
of the quarter.
From a regulatory perspective, during Q1 2011, new
promotional rules were introduced by the Algerian
telecommunications regulator (ARPT), concerning the
duration of pre-paid promotions, which has been
reduced from one month to fifteen days, and with
respect to the required time period between pre-paid
promotions within any given month.
In this new regulatory context, OTA launched two main
promotions during the first quarter of 2011. These
promotions were necessarily restricted by the network
limitations which have resulted from the Bank of
Algeria‟s injunction and its expected potential evolution.
Promotions included a recharge bonus for the “Allo”
pre-paid products and a 50% reduction on subscription
fees and first monthly fees for post-paid products. VAS
activity distinguished itself in the marketplace through
the launch of the Arabic version of “Scoop”, the OTA
information service. OTA continues to be subjected to
the arbitrary ban from advertising on the national public
TV and continues to seek to mitigate the effects of this
ban through advertising on other regional TV channels
like Nessma and MBC, as well as on the internet and
through continuously changing its media mix to ensure
awareness of new launches while maintaining the
emotional bond with its customer base.
On the sales side, OTA continued to sell its mobile
telecommunication services through indirect channels
(distributors) and through the 87 owned “Djezzy”
branded shops. The nine exclusive national distributors
cover all the 48 Wilayas and are distributing OTA‟s
products through 19,000 authorized points of sales
(“POS”). During Q1 2011 OTA focused on expanding the
network of POS selling post-paid from 87 (owned shops)
March
2010
March
2011
Inc/
(dec)
March
2010
December
2010
March
2011
Inc/(dec)
M ar. 2011 vs.
M ar. 2010
Financial Data Operational Data
Subscribers 14,790,372 15,087,393 15,509,202 4.9%
Revenues (US$ 000) 412,524 438,585 6.3%
Revenues (DZD bn) 30.4 32.0 5.3% Market Share 59.1% 57.6% 58.1% (1.0%)
EBITDA (US$ 000) 229,415 260,639 13.6%ARPU (US$)
(3 months)9.2 9.7 9.4 1.8%
EBITDA (DZD bn) 17.00 19.00 11.8%ARPU (DZD)
(3 months)679 724 683 0.6%
EBITDA Margin 55.6% 59.4% 3.8% MOU (YTD) 267 280 284 6.3%
Capex (US$ m) 48 4 (92%) Churn (3 months) 6.4% 5.7% 4.7% (1.7%)
GIVING THE WORLD A VOICE
Orascom Telecom Holding Q1– 2011 P a g e | 25
to 600 (through authorized POS) in order to increase
post-paid gross adds.
Despite the extremely challenging conditions described
above, the overall customer base increased by 5% to
reach 15.5m customers by the end of Q1 2011. OTA also
managed to control churn through the continued
enhancement of the “Imtyaz” loyalty program with a
special focus on high value customers. Churn rate for 3
months dropped from 6.4% in Q1 2010 to 4.7% in Q1
2011.
By carefully monitoring the value of customers being
acquired and not launching value destroying
promotions, OTA's ARPU saw a very slight increase in Q1
2011 compared to Q1 2010. OTA‟s revenue evolution
along Q1 2011 followed a parallel trend to the actions
undertaken by OTA to mitigate operational handicaps.
Revenues for Q1 2011 showed an increase of 6% over
the same period of 2010, in line with the recovery trend
seen in previous quarters. EBITDA increased by 14% and
EBITDA margin by 4% compared to 2010. Capex
dropped by 92% YoY, mostly due to the wrongful ban on
overseas foreign currency transfers by OTA, which is
preventing the payment of essential suppliers and
creditors, the import of essential equipment, and the
undertaking of critical network maintenance. The
inability to carry out the aforementioned maintenance
and expansion works and to secure essential goods and
services for the network represent a key source of high
operational uncertainty for the months to come.
GIVING THE WORLD A VOICE
Orascom Telecom Holding Q1 – 2011 P a g e | 26
Mobilink – Pakistan
Financial Data Operational Data
* Market share, as announced by the Pakistani Regulator is based on information disclosed by the other operators which use different subscriber recognition policies.
Mobilink closed the first quarter of 2011 with revenues of
US$ 275 million. Revenue increased by 4% in local
currency terms when compared to same period in 2010.
The subscriber base also exhibited a 4% increase
compared to Q1 2010 closing at 32.7 million. EBITDA
improved by 5% in US$ terms, and by 11% in PKR
compared to last year.
The cellular industry remained very active throughout Q1
2011 with a lot of focus on regional offers by all
operators. Mobile Number Portability (MNP) also
remained as a major area of focus by the industry.
Moreover, the key highlight of the first quarter was the
ICC Cricket World Cup and all operators rolled out offers
to attract customers‟ attention during the world-cup
matches.
Mobilink continued rolling out new offers targeting
various subscriber segments as well as different usage
needs. Location based offers were launched in several
cities during the quarter in order to specifically target
areas with lower market shares through offering free
calling at night and discounted rates during daytime. A
variety of voice and VAS products were also launched
to increase customer engagement and attachment. In
addition to the new product launches, Mobilink
maintained focus on new subscriber acquisition through
both sales and MNP with the objective of increasing the
subscriber base and maintaining its health.
Understanding the importance of the youth segment in
Pakistan, Jazba, the youth package launched by
Mobilink in December 2010, remained in focus
throughout the quarter in order to increase its level of
attachment. Jazba theme song centered on Cricket
World Cup and starring members of the Pakistani Cricket
team was launched during the time of the World Cup
and has succeeded in gaining popularity as the
Pakistani team progressed and reached the semi-final.
Valentine offer was also launched in order to associate
this Youth centric occasion with Jazba. At the end of
March, a stop-the-clock offer was launched for Jazba
customers as well.
On the Jazz front, several promotions were launched in
Q1 in order to improve the brand‟s appeal and increase
subscriber engagement. Super Sunday promotion was
launched offering subscribers 150 On-Net minutes to be
used on Sundays in return of PKR 20. The Gold Coin offer
was launched to boost the existing daily Hybrid Bundle
(offering minutes and SMS). The offer made it possible for
daily Hybrid Bundle subscribers to win a gold coin
everyday through a lucky draw which resulted in an
increase in bundle subscriptions while generating
incremental revenue and attachment from the
subscriber base.
Mobilink also focused on International Direct Dialing
(IDD) through back to back offers in Q1 starting with the
launch of an offer targeting the destinations of USA,
Canada and UK (Landline) and then with a World Cup
offer targeting the World Cup host nations of India,
Bangladesh and Sri Lanka. The offers helped engaging
IDD customers and offered them attractive call rates to
these destinations. Mobilink‟s International Roaming
footprint was also increased through offering discounted
rates to subscribers while roaming in Sri Lanka during the
World Cup.
March
2010
March
2011
Inc/
(dec)
March
2010
December
2010
March
2011
Inc/(dec)
M ar. 2011 vs.
M ar. 2010
Financial Data Operational Data
Subscribers 31,572,181 31,794,292 32,706,945 3.6%
Revenues (US$ 000) 272,262 275,383 1.1%
Revenues (PKR bn) 23.1 24.0 3.9% Market Share 31.6% 31.4% n.a. n.a.
EBITDA (US$ 000) 105,772 111,009 5.0%ARPU (US$)
(3 months)2.8 2.9 2.8 (0.0%)
EBITDA (PKR bn) 9.00 10.00 11.1%ARPU (PKR)
(3 months)240 245 235 (2.0%)
EBITDA Margin 38.8% 40.3% 1.5% MOU (YTD) 203 206 206 1.7%
Capex (US$ m) 24 45 88% Churn (3 months) 5.2% 8.2% 6.4% 1.2%
*
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Orascom Telecom Holding Q1 – 2011 P a g e | 27
Mobilink entered into the Mobile Financial Services
arena with the launch of its utility bill payment service.
The service brings convenience and ease, not only to
Mobilink‟s customers, but also to non-Mobilink and non-
mobile customers who can avail this service through
Mobilink Customer Care centers, Mobilink Franchises
and selected retailers.
Promotions of varying facet were rolled out on the VAS
front. The success story of SMS Khazana (SMS quiz)
continued with the launch of the fifth version in Q1 2011.
A number of World Cup related services such as Live
Commentary and Fantasy League were launched to
captivate customers during the time of the World Cup.
Mobilink also introduced new versions of Blackberry
handsets along with the Motorola Flip out in Q1. Other
innovative services like Mobilink Stockpro, Jazz Apni Call
and Jazz Football Club were introduced to engage
customers as well.
During March, Mobilink faced an unfortunate fire
eruption in its Islamabad MSC on March 6th, 2011 which
caused network outage of 12-18 hours in the areas
being fed by the MSC.
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Orascom Telecom Holding Q1 – 2011 P a g e | 28
banglalink – Bangladesh
Financial Data Operational Data
* Market share, as announced by the Regulator in Bangladesh is based on information disclosed by the other operators which use different subscriber recognition policies.
In Q1 2011, banglalink touched another important
milestone by reaching a subscriber base of 20 million. At
the end of Q1 2011, subscriber base stood at 20.1 million,
a 42% increase compared to the same quarter last year.
This achievement was made possible through
aggressive acquisition and strong customer retention
policies. Market share at the end of Q1 2011 was 27.6%
solidifying its position in the industry.
banglalink‟s revenue performance has been impressive
with US$126 million revenue in Q1 2011 which is an
increase of 27% compared to Q1 2010.
banglalink achieved an EBITDA of US$ 45 million in Q1
representing a 6% increase compared to the previous
year. EBITDA margin decreased to 36% in Q1 2011
compared to a margin of 43% in last year. On a
quarterly basis, EBITDA margin increased due to higher
revenue and lower subsidy in subscriber acquisition cost
in the form of SIM tax. Capital expenditure in Q1 2011
was US$ 13 million.
In Q1 2011, banglalink continued to launch attractive
services and offers to the market, such as a daily
subscription-based tariff offer where customers can
enjoy a discounted flat tariff offer throughout the day for
minimal subscription fee. banglalink has launched
several mobile internet data plan & branded data
modem offers in order to consolidate its position in the
mobile internet space. banglalink continues to pioneer
the launching of innovative services to digitize the
agriculture sector which is the biggest community in the
country. banglalink has recently launched Krishi (agri)
Bazaar which is an IVR based service through which
sellers and buyers will be able to upload or search the
details of their desired Agro products, prices, and sellers‟
or buyers‟ locations.
March
2010
March
2011
Inc/
(dec)
March
2010
December
2010
March
2011
Inc/(dec)
M ar. 2011 vs.
M ar. 2010
Financial Data Operational Data
Subscribers 14,219,447 19,327,005 20,126,537 41.5%
Revenues (US$ 000) 99,653 126,210 26.6%
EBITDA (US$ 000) 42,592 45,048 5.8% Market Share 25.9% 28.5% 27.6% 1.7%
EBITDA Margin 42.7% 35.7% (7.0%)
Capex (US$ m) 59 13 (78%)ARPU (US$)
(3 months)2.3 2.1 2.0 (14.3%)
ARPU (BDT)
(3 months)161 149 148 (8.3%)
MOU (YTD) 233 230 205 (12.0%)
Churn (3 months) 2.3% 4.6% 3.8% 1.5%
*
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Orascom Telecom Holding Q1 – 2011 P a g e | 29
koryolink – Democratic People's Republic of Korea
Financial Data Operational Data
* Based on the official exchange rate between the US$ and the North Korean Won (KPW) of KPW 135 as sourced by Bloomberg.
Since its launch back in December 2008, koryolink has
been focusing on maximizing the size of its subscriber
base. In Q1 2011, koryolink has successfully reached and
crossed the half million subscriber mark closing the
quarter with an ending base of over 535 thousand
subscribers. Such growth represents an over 420%
increase compared to the ending base of Q1 2010.
Throughout the first quarter, koryolink continued to focus
its efforts on two main areas; boosting subscriber growth
and maximizing foreign currency revenues. This was
done using a three-pronged approach which involved
offering innovative products and services to the market,
maintaining a strong sales presence across major cities
and expanding network coverage to cover a larger
percentage of the Korean population.
In February 2011, koryolink introduced an innovative
offering targeting all Korean customers called the “Euro
Packs”. The “Euro Packs” are basically recharge cards
that subscribers can buy in Euros and in return, such
scratch cards offer them free voice & VAS in the off-
peak period. The main objective behind launching such
an offering was to boost koryolink‟s Euro revenue. The
“Euro Packs” sales trend has seen a steady increase
since launch which proves the right compatibility and
wide acceptance of the offering in the Korean market.
In January 2011, and for the first time in the DPRK,
koryolink offered the Multimedia Messaging Service
(MMS) to its subscribers. This represented the latest
addition to koryolink‟s VAS portfolio. The service was
received positively from subscribers and continues to
exhibit a healthy growth rate to date.
In its efforts to better serve existing subscribers and reach
out to potential customers, koryolink has maintained a
wide distribution network consisting of 18 shops inside
the capital Pyongyang and 8 shops covering eight main
cities in the DPRK through an agreement with KPTC.
Through such distribution network koryolink provides a
variety of services such as selling new lines, selling
airtime, providing information to subscribers, etc.
koryolink‟s network currently consists of 341 on air base
stations covering the capital Pyongyang, 14 main cities
as well as 72 smaller cities. The network coverage also
extends over 22 highways. As of the end of Q1 2011,
koryolink‟s network covers 13.6% of the DPRK‟s territory
and 92% of its population. In addition to voice, the
network supports a variety of services such as video call,
SMS, MMS, voice mail, WAP and HSPA.
March
2010
March
2011
Inc/
(dec)
March
2010
December
2010
March
2011
Inc/(dec)
M ar. 2011 vs.
M ar. 2010
Financial Data Operational Data
Subscribers 125,661 431,919 535,133 n.m.
Revenues (US$ 000) 9,029 25,761 185.3% Market Share 100.0% 100.0% 100.0% 0%
EBITDA (US$ 000) 5,849 22,562 n.m.ARPU (US$)
(3 months)21.3 14.6 12.7 (40.5%)
EBITDA Margin 64.8% 87.6% 22.8%
Capex (US$ m) 27 47 74% MOU (YTD) 311 316 270 (13.0%)*
*
* *
GIVING THE WORLD A VOICE
Orascom Telecom Holding Q1 – 2011 P a g e | 30
Equity Method
Mobinil – Egypt
Operational Data
* ARPU expressed under OTH‟s definition may differ from Mobinil‟s disclosed figures.
The first quarter of 2011 performance was impacted by
the political events and ensuing economic uncertainty
which slowed subscriber growth, decreased revenues
and pressured margins.
The Q1 2011 closing base reached 30.4 million mobile
customers (year on year increase of 16%) and 227
thousand ADSL subscribers (year on year increase of
14%) Q1 2011 mobile customers‟ net additions reached
only 0.13 million due to a strong drop in sales activity
mainly in February: many shops were closed due to lack
of security and limited mobility of persons during the
weeks of the turmoil.
Due to the intensity of the political events in January
and February, Mobinil was constrained in terms of
commercial launches especially with the limited shop
activities, however some compensations were provided
to the customers to make up for the services
disconnections (50% on Fixed DSL, 30% on MBB and a 1
EGP daily emergency credit for pre-paid customers who
were not able to place calls). The only offers provided
were limiteded to some gifts, new handsets launches on
a limited scale and the launch of Happy Friday
promotions.
March
2010
December
2010
March
2011
Inc/(dec)
M ar. 2011 vs.
M ar. 2010
Operational Data
Subscribers 26,121,394 30,224,888 30,358,000 16.2%
ARPU (US$)
(3 months)5.6 4.9 4.5 (19.6%)
ARPU (EGP)
(3 months)31 28 25 (19.4%)
*
*
GIVING THE WORLD A VOICE
Orascom Telecom Holding Q1 – 2011 P a g e | 31
WIND Mobile– Canada
Globalive Wireless Management Corp. (“Company” or
“GWMC”), operating its wireless business under the
brand name WIND Mobile, entered its second year of
operations in the Canadian market in December,
2010. At the end of the first quarter of 2011 it had
271,659 active subscribers. WIND Mobile provides HSUPA
network coverage in five of the top six population
centers in Canada and their peripheries with slightly over
11M population covered. This coverage is
supplemented with National Roaming for its customers.
WIND Mobile has established the position as the first real,
country-wide alternative in the Canadian wireless
market, a market historically dominated by three
players.
WIND Mobile offers simple, feature-rich service plans and
seasonal promotions and is the pioneer for unlimited
tariffs in the Canadian market. It has a wide range of
voice and data services starting as low as CAD15 a
month which provide global standards and true value
for Canadians. It also features no charges for incoming
text or incoming long distance, no system access fees
and no contracts, along with a unique payment
agnostic concept where plan offerings are identical for
both post-paid and prepaid segments. WIND continued
its unlimited province-wide calling and unlimited nation-
wide calling plans. First quarter competitive indicators
show strong customer acceptance across different
market segments, increasing WIND‟s active subscriber
base by 17% in Q1 2011 and reinforcing its solid share of
net adds. This happened in spite of typical seasonal
decline in growth rates in the first quarter of the year.
WIND continued its „TAB‟ offering for qualified
customers, and has introduced a number of new rate
plans at different price points to better cater for our
customer needs, including a Family Plan. WIND Mobile
continued extending its handset lineup with 18 distinct
devices ranging from high-end Blackberries and Android
devices to entry-level phones.
WIND Mobile‟s distribution network continued its
expansion reaching a total of 475 points of sale by the
end of March including 124 WIND branded locations.
The diversity of WIND‟s distribution network serves
customers across all market segments. WIND‟s
distribution network comprises a mix of corporate stores,
strategic alliances (store within a store in Blockbuster),
exclusive dealers, and third party retailers.
In January 2010, the Company was named as a
respondent in an application by Public Mobile Inc. to
the Federal Court of Canada for an order overturning
the December 2009 Cabinet order which permitted
GWMC to launch its wireless operations. In that
December 2009 order, the Cabinet determined that the
Company met the requirements of Canada's
telecommunications ownership and control rules and
was, therefore, eligible to commence operations. On
February 4, 2011, the Federal Court issued its decision.
The court ruled that the Cabinet order contained two
errors and should be quashed. The decision has been
stayed pending the Company‟s appeal of this ruling,
which will be heard on May 18, 2011.
March
2010
December
2010
March
2011
Inc/(dec)
M ar. 2011 vs.
M ar. 2010
Operational Data
Subscribers - 232,641 271,659 n.a.
ARPU (US$)(3 months) - 30.0 27.4 n.a.
ARPU (CAD)(3 months) - 28.9 26.7 n.a.
GIVING THE WORLD A VOICE
Orascom Telecom Holding Q1 – 2011 P a g e | 32
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 Q1 2010 are represented accordingly.
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. OT Ventures owns 100% of Sheba Telecom which operates under the trade name banglalink.
5. Direct and Indirect stake through International Telecommunications Consortium Limited (ITCL).
6. OIH owns 100% of Orascom Telecom Iraq which sold Iraqna in December 2007.
7. Holding company for OTH‟s Share in Globalive which has been accounted for under the equity method.
2010 2011 2010 2011
GSM Operations
Mobinil (Egypt) 28.75% 28.75% Equity consolidation Equity consolidation
Egyptian Co. for Mobile Services 20.00% 20.00% Equity 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% Divested Proportionate Consolidation Divested
Telecel Globe 94.00% 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
OT Services Europe 100.00% 100.00% Full Consolidation Full Consolidation
MedCable 100.00% 100.00% Full Consolidation Full Consolidation
Mena Cable 100.00% 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
OT_OSCAR 100.00% 100.00% Full Consolidation Full Consolidation
OTLB 100.00% 100.00% Full Consolidation Full Consolidation
TMGL 100.00% 100.00% Full Consolidation Full Consolidation
OTO 100.00% 100.00% Full Consolidation Full Consolidation
C.C 100.00% 100.00% Full Consolidation Divested
OTUH 100.00% 0.00% Full Consolidation Divested
CORTEX 100.00% 100.00% Full Consolidation Full Consolidation
Subsidiary
Ownership
March 31
Consolidation Method
March 31
2 1
1
4
5
6
7
3
GIVING THE WORLD A VOICE
Orascom Telecom Holding Q1 – 2011 P a g e | 33
Appendix
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. 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 and Mobinil
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.