3Q10 Egypt Mobile Operator Forecast, 2010 - 2014

Mobile Operator Forecast on Egypt provides over 50 operational and financial metrics for Egypt’s wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2014. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 1Q2012. Operators covered for Egypt include: Mobinil (The Egyptian Company for Mobile Services), Vodafone Group Plc, and Etisalat (Emirates Telecommunications Corporation). Our Mobile Operator Forecasts are updated quarterly and are available for one-time delivery or through regular updates.

Global Mobile Operator Forecast covers 50 operational metrics of 200+ mobile operators in 50+ countries, making up 80% of the world’s population. Our forecasts are based on our proprietary, country-specific forecasting models. These models deploy multiple regression analysis and cross-impact matrices that estimate relationships between subscriber data, technology use and deployment data, overall economic and demographic changes expected in a particular country; and relate these to company operational and financial metrics.

Companies Covered in this Country Mobile Operator Forecast
Mobinil (ECMS - The Egyptian Company for Mobile Services)
Vodafone Group Plc

Etisalat (Emirates Telecommunications Corporation) (For Etisalat, only the subscriber data and the revenue data are available.)

Annual Results & Forecasts for each of the above operators is covered in this report for: CY 2001-CY 2014. Quarterly Results & Forecasts are covered for: March 2003 - March 2012

PREPAID AND POSTPAID SUBSCRIBERS
SUBSCRIBER GROWTH (YoY)
SUBSCRIBERS BY OPERATOR
SUBSCRIBER GROWTH BY OPERATOR (YoY)
NET SUBSCRIBER ADDS BY OPERATOR
NET SUBSCRIBER ADDS GROWTH BY OPERATOR
MONTHLY CHURN BY OPERATOR
POST-PAID SUBSCRIBERS BY OPERATOR
POST-PAID SUBSCRIBER GROWTH BY OPERATOR (YoY)
PREPAID/WHOLESALE SUBSCRIBERS BY OPERATOR
PREPAID/WHOLESALE SUBSCRIBER GROWTH BY OPERATOR
POST-PAID % OF TOTAL SUBSCRIBERS BY OPERATOR
PREPAID/WHOLESALE % OF TOTAL SUBSCRIBERS BY OPERATOR
POST-PAID NET ADDS BY OPERATOR
POST-PAID ADDS GROWTH BY OPERATOR (YoY)
PREPAID/WHOLESALE NET ADDS BY OPERATOR
PREPAID/WHOLESALE ADDS GROWTH BY OPERATOR
MONTHLY ARPU BY OPERATOR
MONTHLY ARPU GROWTH BY OPERATOR (YoY %)
DATA % OF SERVICE REVENUES BY OPERATOR
MONTHLY DATA ARPU BY OPERATOR
DATA ARPU GROWTH BY OPERATOR (YoY)
MONTHLY VOICE ARPU BY OPERATOR
VOICE ARPU GROWTH BY OPERATOR (YoY)
VOICE REVENUE PER MINUTE BY OPERATOR
VOICE REVENUE PER MINUTE GROWTH BY OPERATOR (YoY)
MOU PER SUBSCRIBER BY OPERATOR (MINUTES/MONTH)
MOU/SUBSCRIBER GROWTH BY OPERATOR (YoY %)
SHARE OF TOTAL SUBSCRIBERS BY OPERATOR
HHI INDEX BY SUBSCRIBER SHARE
SHARE OF NET ADDS BY OPERATOR
SHARE OF POST-PAID NET ADDS BY OPERATOR
SHARE OF PREPAID/WHOLESALE NET ADDS BY OPERATOR
SHARE OF SERVICE REVENUE BY OPERATOR
HHI INDEX BY SERVICE REVENUE SHARE
YoY CHANGE IN REVENUE SHARE BY OPERATOR
REPORTED REVENUE BY OPERATOR (REPORTING CURRENCY)
SERVICE REVENUE BY OPERATOR (REPORTING CURRENCY)
EBITDA BY OPERATOR (REPORTING CURRENCY)
CAPEX BY OPERATOR (REPORTING CURRENCY)
SERVICE REVENUE GROWTH BY OPERATOR (YoY)
EBITDA GROWTH BY OPERATOR (YoY)
EBITDA/REPORTED REVENUE BY OPERATOR
EBITDA/SERVICE REVENUE BY OPERATOR
EBITDA/INCREMENTAL SERVICE REVENUE BY OPERATOR
CAPEX/REPORTED REVENUE BY OPERATOR
CAPEX/SERVICE REVENUE BY OPERATOR
(EBITDA-CAPEX)/REPORTED REVENUE BY OPERATOR
EBITDA MARGIN EXPANSION/CONTRACTION BY OPERATOR
REPORTED REVENUE BY OPERATOR (USD)
ARPU BY OPERATOR (USD)
DATA ARPU BY OPERATOR (USD)
VOICE REV/MINUTE BY OPERATOR (USD)
SERVICE REVENUE BY OPERATOR (USD)
EBITDA BY OPERATOR (USD)
CAPEX BY OPERATOR (USD)

Executive Summary

Strong subscriber growth in Egypt's wireless market continues
+29.8% industry average subscriber growth in 1Q.2010

• The operator-wide average subscriber growth (YoY) was 29.8% in 1Q.2010, down from 38.6% in 1Q.2009.
• Etisalat is the leader in subscriber growth in Egypt with a 59.5% growth rate (YoY) in 1Q.2010.
• Subscriber growth rates at Mobinil (ECMS) and Vodafone were also strong in the latest quarter at 23.3% and 29.9% respectively in 1Q.2010.

ARPUs continue declining in Egypt's mobile operator space
-20.8% industry average ARPU growth in 1Q.2010

• Negative ARPU growth continues in Egypt's mobile operator space. The industry average ARPU growth rate was -20.8% in 1Q.2010, down from -19.8% in 1Q.2009.
• Mobinil (ECMS)'s ARPU growth rate (YoY) in 1Q.2010 was -17.9%, slightly down from -17.0% in 1Q.2009.
• Vodafone's ARPU growth fell to -23.7% in 1Q.2010, down from -22.3% in 1Q.2009.

Minutes of Use per Subscriber are stabilizing
The industry average MOU/Sub growth of +2.7% in 1Q.2010

• The operator-wide average Minute of Use (MOU) per subscriber reached 150 minutes per month in 1Q.2010 (up -2.7% from 146 minutes in 1Q.2009).
• Mobinil (ECMS)'s MOU/Sub was 141 minutes per month and Vodafone's MOU/Sub was 159 minutes per month in 1Q.2010.

Negative EBITDA growth at both Mobinil and Vodafone in the latest quarter
-8.5% industry-average EBITDA growth in 1Q.2010

• The industry average EBITDA growth rate (YoY) was -8.5% in 1Q.2010, down from 7.1% in 1Q.2009.
• Vodafone's EBITDA growth rate (YoY) was -1.2% and Mobinil (ECMS)'s EBITDA growth (YoY) was -16.0% in 1Q.2010.

So what is IEMR’s Forecast?

Total wireless subscriber connections in Egypt to reach 93.7 million in 2014

• The wireless penetration rate in Egypt is still relatively low at 75.2% in 1Q.2010, and we expect that Egypt's mobile market will continue to grow. We forecast that the number of total wireless subscriber connections in Egypt will increase from about 55.3 million in 2009 to 93.7 million in 2014.
• Mobinil will continue to be the largest mobile operator in Egypt. Our model predicts that Mobinil's number of subscriber connections will increase from 25.3 million in 2009 to approximately 38.5 million in 2014.
• We also expect that, by the end of 2014, Vodafone will have 35.8 million subscriber connections and Etisalat will have 19.3 million subscriber connections.

Vodafone and Mobinil will be losing market shares to Etisalat over the next five years

• Our model predicts that Etisalat's subscriber market share will increase from 12.1% in 2009 to 20.7% in 2014.
• On the other hand, the largest two operators will be losing subscriber market shares over the next several years. We expect that Mobinil's share will decrease to approximately 41% by the end of 2014.

ARPUs in Egypt will be declining from 2010 to 2014

• Our forecasting model predicts that the industry average monthly ARPU will decline from EGP 42 to EGP 35 over the forecast period, 2010 - 2014.
• We expect that Mobinil's monthly ARPU will be approximately EGP 32 and Vodafone's monthly ARPU will be EGP 37 in 2014.

EBITDA margins at Mobinil and Vodafone to be about 44% - 45% over the next eight quarters

• We expect that Mobinil and Vodafone will have similar levels of EBITDA margins over the forecast period, 2010 - 2014.
• Our model forecasts that EBITDA margins (calculated as EBITDA/service revenue) at Mobinil and Vodafone will be approximately 44% and 45% respectively over the next eight quarters.

Mobinil (ECMS - The Egyptian Company for Mobile Services)
Vodafone Group Plc
Etisalat (Emirates Telecommunications Corporation)