1. 204 0 128 204 255 234 0 128 102 153 255 1 ITU Strategic Management Workshop 20 December 2005 TE Marketing Strategy www.telecomegypt.com.eg Sanaa Soliman Marketing Director

2. 204 0 128 204 255 234 0 128 102 153 255 2 Agenda  Overview of Telecom Egypt  History and Strategy of Telecom Egypt  Marketing Strategy  Conclusion

3. 204 0 128 204 255 234 0 128 102 153 255 3 Selected Statistics (December 2004)  Population:70m  Nominal GDP:$77bn  GDP per Capita:$1,094  Fixed Line Penetration:13.6%  Fixed Line Subscribers:10.3m  Mobile Penetration:10.8%  Mobile Subscribers:7.6m Overview of Telecom Egypt Fast Growing Economy in the Middle East GDP Growth Fixed Line Penetration Source:Global Insight, Q2 2005. Source:Analysis, International Telecommunications Union. 2004-08 Real GDP CAGR Note: Data as of 2004 Year End. Source:Telecom Egypt, Global Insight, Mobinil, Vodafone Egypt.

4. 204 0 128 204 255 234 0 128 102 153 255 4 Players  Telecom Egypt is the sole operator in the voice segment  200+ ISPs in the internet segment  TE sole network operator  Liberalised, but no alternative network operators to date Recent Developments  Telecom Egypt sole provider international access  To be liberalised in January 2006  2 new international gateway licenses to be offered  Mobinil  Vodafone Egypt  Third mobile license to be issued in 2006 Domestic Fixed Line International Mobile Source: Telecom Egypt. Overview of Telecom Egypt Sole Fixed Line Operator in Egypt

5. 204 0 128 204 255 234 0 128 102 153 255 5 History and Strategy 150 Years of History 1854 1881 1957 1998 2003 2003- 05 2005  First telegraph line established between Cairo and Alexandria  First telephone line between Cairo and Alexandria  The Arab Republic of Egypt Telecommunications Organisation (ARETO) established as the exclusive provider of all telecommunications services in Egypt  Transformed into a joint stock company and renamed Telecom Egypt  Telecom Regulatory Agency (TRA) established, later renamed National Telecom Regulatory Agency (NTRA)  Law 10 mandated the liberalisation of international access by 1 January 2006  Acquired and increased minority stake (currently at 25.5%) in Vodafone Egypt  Telecom Egypt issued the largest corporate bond in Egypt to date, raising EGP 2 billion Source: Telecom Egypt.

6. 204 0 128 204 255 234 0 128 102 153 255 6 Marketing Strategy  Key strategic goal is to grow revenues and maintain or improve profitability  Telecom Egypt has segmented its customer base in order to align its sales and marketing efforts more closely to the products and services appropriate to each segment  Migrate customers from less profitable segments to more profitable ones through bundling strategy and other marketing incentives  Telecom Egypt aims to achieve its strategic goals by focusing on three main areas:  Pricing  New and improved & products & services (including bundled offerings)  Enhanced customer experience

7. 204 0 128 204 255 234 0 128 102 153 255 7 StrategyProgramme Marketing Strategy Pricing Strategy  Rebalanced tariffs to reflect cost of service  Maintain competitive long-distance and fixed to mobile tariffs relative to mobile tariffs  Evolve toward flatter pricing for volume customers  Win back traffic from mobile substitution  Managed IP-Voice flat tariff schemes  Volume tariffs  Post Liberalisation  Introduce bundled offerings of subscription and inclusive minutes  Contract commitments for volume & lines with reconciliation at period end New and Improved Products and Services  Align TDM and NGN IP services platform to ensure consistent product definition, price and profitability  Develop Value Added Service bundles to stimulate voice traffic  Develop a single branded portfolio of bundled voice and data services leveraging common distribution, customer care and billing Segment driven Ongoing  Large and medium enterprises – multi-site managed voice and data solutions with dedicated or shared business solutions  All subscribers – develop Value Added Services bundles which stimulate voice traffic  All subscribers – Development of a single branded portfolio of bundled voice and data services leveraging common POS, Customer Care and Billing

8. 204 0 128 204 255 234 0 128 102 153 255 8 StrategyProgramme Marketing Strategy Enhance Customer Experience  Build the technical capability, process and training to retain customers Segment driven Ongoing  Develop segment specific customer care  Enterprises – Appointment of skilled Key Account managers to deal with all requirements, including business sector specialisation  Individual subscribers - offer enhanced web- site segmented by subscriber type with improved facilities including ordering and activation of VAS  More Customer Service outlets in better locations  24 x 7 Customer Contact Centre offering service ordering, fault reporting, information services  Adopt Customer Service Assurance Programme for all customers with eventual shift to compensation backed Service Level Agreements for large customers

9. 204 0 128 204 255 234 0 128 102 153 255 9 TE Data Strategy Short term  Aggressively acquire ADSL customers and grow market share to capitalise on the current growth in the market  Provide service differentiation through cutting edge customer service, support and high speed connections Medium term  Retain Existing subscribers, reduce churn and increase ARPU by increasing customer stickiness through VAS (e.g., IPTV, VoIP, broadband gaming) Long term  Single billing  Postpaid / prepaid billing  Metered / limited bandwidth services Source: TE Data.

10. 204 0 128 204 255 234 0 128 102 153 255 10 CAT Strategy  Target high value residential and corporate customers  No teledensity obligations or targets  Focus on high value customer segments with higher ARPU rather than on market share  Compete on quality rather than price by offering superior customer care, innovative packaging and rapid response time  Begin by targeting business customers’ requests (new as well as from existing waiting list) and offer attractive packages for business customers  Serve corporate customers through a direct sales force. Serve residential customers through an indirect distribution network of 3,000 shops nationwide (distributors of prepaid cards, CPE’s, etc.) Source: Telecom Egypt.

11. 204 0 128 204 255 234 0 128 102 153 255 11 Conclusion  Key elements of value creation strategy  Increasing ARPL  Tariff rebalancing  Addressing competitive threats  New services (broadband and IP services)  Exploit TE’s position as only fixed line network operator in Egypt  Optimise asset base  Disciplined capex strategy  Targeting profitable new customers  Exploit growth opportunities in new geographic markets (Algeria) and new product offerings (triple-play)  Cultural shift from supply-based to demand-oriented organisation  Transitioning Telecom Egypt to face the challenges of a progressively more liberalised market Source: Telecom Egypt.