04 Oct Telecom Egypt formalises capacity lease agreement with Bharti Airtel for MENA Cable
Telecom Egypt has said that it has signed an agreement with Bharti Airtel to formalise its partnership announced on 06 August. The deal grants Airtel Indefeasible Right of Use (IRUs) of the Middle East North Africa Submarine Cable (MENA Cable) and TE North Cable Systems. Airtel will take large capacities on a long-term basis on two new cable systems, too (SMW5 & AAE1).
The agreement is expected to lead to an immediate recognition of revenue and cash flow of USD 90 million in addition to 4 percent of annual recurring revenue for Telecom Egypt over the lifetime of the cable systems. According to TE, the agreement is crucial as it allows it to recover cash flows spent on the acquisition of MENA Cable immediately, and fulfils the vision expressed in March of identifying an investment opportunity with short-term return prospects.
Egypt’s geographic location on the Red and Mediterranean Seas has enabled Telecom Egypt to play a prominent role as an international traffic corridor, connecting more than eleven cable systems from the East and thirteen from the West linked with the Red-Med Corridor, consisting of seven diversified routes across Egypt.