Former Telecom Egypt CEO Mohamed al-Nawawy has painted a grim picture of the company’s future following his removal from his post last week, warning that the company, under the new board, will sustain financial losses.
The government, which owns 80 percent of TE, announced Tuesday the removal of Nawawy and other government representatives in the company’s board. The new members elected Mohamed Salem, a former communication minister, to be the new CEO.
Telecom Egypt is the sole provider of the landline telephone service and is in total control of the Internet infrastructure used by other service providers: Mobinil, Vodafone and Etisalat.
Speaking to Al-Masry Al-Youm, Nawawy said TE’s future would be full of “vagueness” following his removal, adding that the government-decreed reshuffle in the company’s board will cause it to lose the fourth cell phone network operation license under the pretext of its “unreadiness”. He warned that the new board intends to make “illegal” reductions in the value of contracts worth LE15 billion, which will favor cell phone companies.
The reshuffle also risks causing the company to lose its Internet infrastructure, Nawawy stressed.
Nawawy’s removal came after a dispute with cell phone companies over TE’s push to reduce Internet prices. As a condition for reducing their Internet rates, the companies had asked TE to slash the charge for the use of its Internet infrastructure, which was turned down by TE.
According to Nawawy, Communication and Information Technology Minister Khaled Negm had directed the new board to “reconcile with mobile phone companies by any means,” and to offer “clandestine reductions in (the price for) infrastructure”.
Nawawy said that while cell phone service providers pocket LE6 billion out of LE9 billion in annual internet service revenues, TE is unable to compete with those companies in providing mobile phone services.
The former board chairman described his removal as a “grave” development, claiming to have earned TE the highest revenues in its history as a board member for the last 16 years.
“Who benefits from what is going on in TE? It is foreign capital at the expense of the national company,” Nawawy stated.
Edited translation from Al-Masry Al-Youm