let ter of the chairmanar+06.pdf · mohamed hassan osman investment & business development...

Letter of the Chairman

Financial Highlights

OTH’s Organization

Milestones

History and Evolution of the Company

Disclosure & Shareholder Information

GSM Operations

GSM Operations Support

Board Members

2006 Financial Review

• Board Report

• Financial Statements (EAS)

• Financial Statements (IFRS)

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05

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11

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108

T a b l e o f C o n t e n t s

Naguib SawirisChairman & CEO

This year we continued our strategy of consolidation of ownership

in our operations by increasing our stake in our Algerian GSM

subsidiary to 96.8% versus 87.7%, and in our Egyptian GSM

subsidiary to 33% from 31.26%. Moreover, we have started a

buyback program for Orascom Telecom shares which would be

implemented at favorable relative market valuations.

We are heading in the right strategic direction by maintaining

our dominance in the markets we operate in, while at the same

time providing our customers with the exceptional products

and services. Employees and management in all of our companies

are united in our determination to achieve excellence and to be

the leading network company in our markets; this guides our

investments and our strategy for the future.

In 2007 we intend to continue to outperform our competition

in most of our main operations. We expect continued high double

digit subscriber growth, strong double digit revenue growth, and

even though ARPU should continue to decline, stable EBITDA

margins and positive cash flows.

We will also continue to pursue our current strategy to capture

the lion’s share of the high subscriber’s growth in our existing

markets by capitalizing on our leadership position in each of our

markets and by investing in network coverage and quality, as well

as innovative product and marketing strategies tailored to local

market conditions.

We will continue to strive for increased shareholder value by

centralized network infrastructure procurement through

framework agreements, financial discipline and reporting at our

subsidiaries, and group-wide strategic initiatives, best practices,

tariffs policy and management expertise.

We intend to take a disciplined approach to investment

opportunities such as consolidating our ownership by buying

out minorities in subsidiaries, entering new markets with large

population, low mobile penetration and adequate risk and return

profile, and repurchasing OTH shares in light of favorable relative

market valuations.

L E T T E R O F T H E C H A I R M A N

02ANNUAL REPORT 2006

Dear Shareholders,

The impressive progress made in 2006 provides the foundation

for Orascom Telecom to unleash its full potential in the coming

years. During 2006 Orascom Telecom has continued its strong

profitable growth, with an increase of over 70% in subscribers,

a 36% increase in revenues and a 43% increase in EBITDA over

2005. We maintained our leading market share in our largest

markets and we have also increased our EBITDA margin as we

continued to benefit from scale and improved efficiency to offset

the effects of competition. Our investment in Hutchison

Telecommunications has appreciated by more than 40% which

largely compensates both for our increased financial expenses

associated with the purchase of this stake and for our relative

lower growth at the net income level.

In 2006, we crossed the 50 million subscriber mark, our revenues

grew by 36% to reach US$4.4 billion, EBITDA grew by 43% to

reach US$1.95 billion and our EBITDA margins increased by

210 bps to reach 44.4%. The EBITDA margin of our core

operations, the GSM subsidiaries, stood at 50.5%, and our net

income exceeded US$700 million. Full credit for this outstanding

performance should go where it belongs: to Orascom Telecom’s

employees.

We are heading in the right strategicdirection by maintaining our dominancein the markets we operate in.

LETTER OF THE CHAIRMAN

FinancialHighlights

FINANCIAL HIGHLIGHTS

2005

2006

+8%NET INCOME

667 Million US$

2005in US$

(Million)667

2006in US$

(Million)719

2005

2006

+36%REVENUES

3,226 Million US$

2005in US$

(Million)3,226

2006in US$

(Million)4,401

2005

2006

(5%)CAPEX

1,871 Million US$

1,782 Million US$

2005in US$

(Million)1,871

2006in US$

(Million)1,782

719 Million US$

4,401 Million US$

F I N A N C I A L H I G H L I G H T S


2005

2006

+43%EBITDA

1,363 Million US$

1,954 Million US$

2005in US$

(Million)1,363

2006in US$

(Million)1,954

2005

2006

+210bpsEBITDA MARGIN

42.3%

44.4%

2005 42.3%

2006 44.4%

22.5

Mil

10.5Mil

9.3Mil

2.9Mil

3.3Mil 3.1Mil

2006

PAKISTAN

ALGERIA

EGYPT

IRAQ

BANGLADESH

TUNISIA

SUBSCRIBERS

OTH’sOrganization

M-Link

Maan El Amine

Budgeting, Planning &Control Officer

Ahmed Halawa

Group Chief Financial Officer

Aldo Mareuse

Corporate Treasury Officer

Amr Abaza

Corporate Finance Officer

Karim Nassr

Corporate Accounting Officer

Mohamed Naguib

Investor Relations Director

Hatim El Gammal

Revenue AssuranceSenior Manager

Mohamed Hassan Osman

Investment & BusinessDevelopment Officer

Mike O’Connor

Ibrahim Karam

Investment & BusinessDevelopment Director Internal Audit Director

Walid Bedair

VP HR & Administration

Wafaa Lotaief

PR & Communications Director

Sabrine El Hossamy

CEOs of Operations

ARPU+

Yassine El Oraby

LINKdotNET

Karim Bichara

OrasInvest

Emad Barsoum

Ring

Adel Khouzam

Chairman and CEO

Naguib Sawiris

O T H ’ s O R G A N I Z A T I O N


Lacom

Jean Pierre Roland

GSM Services Officer

Khaled Ismail

Chief Technology Officer

Tamer El Mahdi

VP Legal Affairs

Amr El Bayoumi

Legal Affairs Director

Ragy Soliman

Group Chief Operations Officer

Emad Farid

Chief Commercial Officer

Ossama Bessada

Djezzy

Hassan Kabbani

Mobilink

Zouhair A. Khaliq

Mobinil

Alex Shalaby

IraQna

Alain St. Marie

TelZim

J.D. Swaim

CEOs of Operations

banglalink

Rashid Khan

Tunisiana

Hesham SibliniScott Gegenheimer

OTH’s ORGANIZATION

Strategic Planning Officer

Khaled Saba

Regulatory Affairs Director

Hisham Moafi

IT Director

Moataz El Sayed

Technical Operations Director

Mohamed Mostafa Ghidan

Customer OperationsDevelopment Director

Yasser Maher

Commercial Planning& Intelligence Director

Ashraf Halim

M I L E S T O N E S 2 0 0 6


July 2006- Orascom Telecom Holding announced that

its Iraqi GSM operation (“IraQna”) has been granted a further three month extension to its current interim license.

November 2006- Orascom Telecom announced that its

Pakistani GSM operation, Pakistan MobileTelecommunications Limited (“Mobilink”),has successfully priced and placed US$250million of Senior Notes due 2013.

- Orascom Telecom Holding signed an agreement to purchase an additional 1.21%indirect stake in its Algerian GSM operation,(“OTA”). Orascom Telecom will directly and indirectly own 96.81% of OTA.

September 2006- Orascom Telecom Holding announced that

its Iraqi GSM operation (“IraQna”) has been granted a further three month extension to its current interim license.

October 2006- Orascom Telecom Holding signed an

agreement to purchase a 7.91% stake in itsAlgerian GSM operation, Orascom TelecomAlgeria (“OTA”), for cash consideration ofUS$399 million from Emirates InternationalInvestment Company (“EIIC”).

December 2006- Orascom Telecom Holding has been

notified by Mr. Naguib Sawiris that WeatherInvestments II S.a.r.l. (“Weather II”), fullyowned by the Sawiris Family and controlledby Mr. Naguib Sawiris, has increased its stake in Weather Investments S.P.A. (“Weather SPA”) to 97%.

- Orascom Telecom Holding surpassed the50 million subscriber base.

MILESTONES 2006

i wish

January 2006- Orascom Telecom Holding surpassed

the 30 million subscriber base.- Orascom Telecom Holding announced

that its Iraqi GSM operation (“IraQna”)has been granted a six month interim license extension.

i wish

February 2006- Orascom Telecom Holding secured a

five year senior secured debt facility totaling US$2 billion on a committed andunderwritten basis.

- Orascom Telecom Holding and Telecom Egypt launched the fixed line telecommunication services in Algeria.

March 2006- Orascom Telecom Holding completed

refinancing of US$1.2 billion vendor notein relation to the Hutchison Telecom acquisition.

- Orascom Telecom Holding announced that it will start buying treasury shares withthe potential of reaching two million shares.

April 2006- Orascom Telecom Holding purchased two

million shares, completing the targeted treasury shares position.

May 2006- Orascom Telecom Holding announced

that it has signed a joint venture with IntelCapital, the venture capital investment armof Intel Corporation, for a new WiMAX (Wireless Interoperability for Microwave Access) investment in Orascom Telecom WiMAX Limited.

June 2006- Orascom Telecom Holding announced the

dividend payment of LE 3.75 per share.- Orascom Telecom Holding announced that

Orascom Telecom Algeria (“OTA”) securedUS$307 million of additional long term financing on May 30th, 2006.

- Orascom Telecom Holding announced its interest in buying up to 3.5% of the sharesof the Egyptian Company for Mobile Services("ECMS").

History andEvolution ofthe Company

Orascom Telecom Holding S.A.E. (or OTH) is part of the Orascom

group of companies, which was established in 1976.

Orascom entered the field of Information Technology and

Telecommunications by trading and distributing IT and telecom

equipment in Egypt. It became the market leader representing

industry leaders such as Microsoft, Hewlett Packard, Compaq,

IBM, Lucent Technologies (AT&T), Oracle and Novell.

Orascom spent nearly ten years establishing a foundation in IT

and telecom hardware. In 1994, it acquired an interest in Egypt’s

first ISP, InTouch. This acquisition was its first step in offering

services in the communications marketplace. As the

communications sector in Egypt began to be privatized, Orascom

continued to add more service companies to its portfolio, and

was a participant in a joint venture that was awarded Egypt’s

first license for VSAT technologies, and a lead member of a

consortium formed to create Egypt’s first private payphone

network. By 1997, Orascom was in a position to participate in

the bidding for a GSM license in Egypt, having proven itself in

the marketplace as an IT and telecom hardware leader, in addition

to building up the know-how and skills in managing large scale

projects and understanding local market conditions.

On July 27, 1997, OTH was incorporated to consolidate the

telecommunications and technology interests of the Orascom

family of companies and the controlling shareholders, the Sawiris

family. By 1998, OTH was the only company in Egypt with licenses

in all three privatized sectors: wireless, fixed line payphones and

VSAT technologies.

OTH entered into the GSM business in 1998 through

a series of acquisitions:

• In early 1998

GSM operations were commenced by acquiring 51% of

ECMS (Mobinil) with France Telecom and Motorola.

• In September 1999

Purchase of a controlling stake in JMTS-Fastlink in Jordan.

• In March 2000

Greenfield license in Yemen was acquired.

• In April 2000

OTH purchased a 38.6% stake in PMCL- Mobilink in Pakistan

and an 80% stake in Telecel, including 11 licenses in Benin,

Burkina Faso, Burundi, CAR, Cote d’Ivoire, the Democratic

Republic of Congo, Gabon, Togo, Uganda, Zambia and

Zimbabwe. Moreover, in early 2000, Telecel acquired a new

GSM 900 license in Niger.

• In July 2000

OTH was floated on the Cairo & Alexandria Stock

Exchange & the London Stock Exchange.

• In February 2001

BOT contract was awarded in Syria.


OTH acquired Motorola’s stake in Fastlink in Jordan, ECMS

in Egypt and PMCL in Pakistan, and as a result, increased

its stake in Fastlink to 91.6%, in ECMS to 31.26% and in

PMCL to 68.69%.

• In July 2001

OTH acquired a Greenfield license in Algeria.

• In August 2001

OTH acquired a further 20% stake in PMCL and, as a result,

increased its ownership to 88.69%.

• In March 2002

OTH acquired a Greenfield license in Tunisia.

HISTORY AND EVOLUTION OF THE COMPANY

After operating 21 licenses in Africa and the Middle

East, OTH decided to divest smaller non-core assets

and focus on its core operations to build value:

• In January 2002

OTH started restructuring its 12 operations in sub-Saharan

Africa under Telecel.


SabaFon in Yemen was divested.

• In December 2002

OTH sold Fastlink in Jordan for US$423 million.

• In May 2003

OTH finalized the sale of seven GSM assets in sub-Saharan Africa.


OTH announced the sale of 51.7% equity stake of Telecel

Loteny in the Ivory Coast.


OTH closed the sale of Oasis Telecom in the Democratic

Republic of Congo.


OTH signed a definitive agreement to sell its GSM operation

in Congo Brazzaville, Libertis Telecom (“Liberits”).

• In October 2002

OTH entered into a joint venture with Wataniya Telecom

to operate its GSM license in Tunisia.

• In October 2003

OTH was awarded a Greenfield license in Iraq’s central

region as a result of a competitive bidding process.

• In July 2004

OTH agreed to renew the license of its Pakistani GSM

subsidiary, Mobilink, for another 15 years to begin after

the expiration of its current license in July 2007 and ending

in July 2022.


OTH purchased 100% of a GSM operation in Bangladesh

and re-branded it as “banglalink”.

• In May 2005

OTH acquired additional equity stakes in OTA in Algeria

and in Tunisiana in Tunisia to reach 87.66% and 50%,

respectively, through a series of transactions.

• In July 2005

OTH acquired all minorities in its GSM operations in Iraq.


OTH acquired a strategic stake of 19.3% in Hutchison

Telecommunications International Limited.

• In November 2006

OTH acquired additional equity stakes in OTA in Algeria

to reach 96.81%. In October OTH acquired 7.91% and

in November a further stake of 1.21% was added.

H I S T O R Y A N D E V O L U T I O N O F T H E C O M P A N Y


Disclosure &ShareholderInformation

Orascom Telecom Holding S.A.E. (“OTH”) maintains a high level

of disclosure and keeps its shareholders informed of any significant

event through press releases, quarterly earning releases, conference

calls and an updated website with all relevant operational and

financial information in addition to reporting its financials in

Egyptian Accounting Standards (LE) and International Financial

Reporting Standards (US$).

Ownership Structure

Weather Investments SPA owns 50% + 1 share of the shares of

OTH, and 50% -1 share is the public free float.

Treasury Shares

As part of its previously announced objective and its strong

belief in its own shares, OTH purchased two million shares,

completing the targeted treasury shares position.

Share Ownership Program for Employees

As part of its commitment to motivation and retention of OTH’s

employees, OTH offers an ESOP plan, having an ownership of

less than 1% of OTH shares.

Paid in Capital

As at December 31, 2006, OTH’s paid in capital was LE 1.1 billion,

divided into 220 million shares, each with a nominal value of LE 5.

Dividends

The Board of Directors of OTH agreed to distribute dividends

to its shareholders during 2006. The dividend was in June, 2006

when a dividend payment of LE 3.75 per share was distributed.

Dividend Policy

OTH’s primary goal is to maintain sufficient reserves and liquidity

to ensure operational and financial needs and maintain high

business growth and potential acquisitions. OTH intends to

operate a progressive distribution policy based on what are

believed to be sustainable levels of dividend payments

supplemented by variable distribution to shareholders of any

excess cash resources. Consequently, dividends will vary from

year to year.

Share Price Performance

At the beginning of 2006, OTH shares were quoted at LE 317.5

on the Cairo and Alexandria Stock Exchange (“CASE”). The

highest quotation during the year was LE 403.9, and the lowest

was LE 234.2. At year end, the quotation price was

LE 377.4; this amounted to a 19% increase in value. The market

value as of December 31, 2006 was LE 83.02 billion, which makes

OTH the largest capitalized company on the CASE.

OTH’s shares on the London Stock Exchange (“LSE”) at the

beginning of 2006 were quoted at US$55. The highest quotation

during the year was US$67.2, and the lowest was US$39.3. At

year end, the quotation price was US$66; this amounted to a

20% increase in value. The market value as of December 31,

2006 was US$14.5 billion.

Trade

OTH is traded on both the Cairo & Alexandria Stock Exchange

and on the London Stock Exchange under the symbols (ORTE.CA,

ORAT EY) and (ORTEq.L, OTLD LI), respectively.

Disclosure

To ensure full disclosure and transparency, OTH reports its

holding and consolidated financials on a quarterly basis using the

Egyptian Accounting Standards (EAS) simultaneously using US$

consolidated financial statements in accordance with the

International Financial Reporting Standards (IFRS).

D I S C L O S U R E & S H A R E H O L D E R I N F O R M A T I O N


DISCLOSURE & SHAREHOLDER INFORMATION

OTH’s GDR Performance 2001-2006

Jan-01 Jun-01 Nov-01 Apr-02 Sep-02 Feb-03 Jul-03 Dec-03 May-04 Oct-04 Mar-05 Aug-05 Jan-06 Jun-06 Nov-06

1200

1100

1000

900

800

700

600

500

400

300

200

100

0

93%

969%

MSCIOT GDR

MSCIOT GDR

OTH’s GDR Performance 2006

20%

33%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

140

120

100

80

60

40

20

0

GSMOperations• Djezzy• Mobilink• Mobinil• IraQna• Tunisiana• banglalink• Telecel Zimbabwe

Note: Mobile Penetration is based on December 31, 2006 subscribers number & market share.

OTH serves a population of 460 million with an average penetration of 26%


Djezzy-ALGERIA Population: 33 million - Mobile Penetration: 50%

Tunisiana-TUNISIA Population: 10 million - Mobile Penetration: 66%

Mobinil-EGYPT Population: 74 million - Mobile Penetration: 24%

IraQna-IRAQ Population: 29 million - Mobile Penetration : 31%

Mobilink-PAKISTAN Population: 160 million - Mobile Penetration: 30%

banglalink-BANGLADESH Population: 140 million - Mobile Penetration: 15%

Telecel-ZIMBABWE

Network

As of December 31, 2006, OTA’s network covered approximately

93% of Algeria’s population, spreading its coverage over the 48

wilayas (provinces) in the country and providing on-road coverage

along major highways. During the last quarter of 2006, OTA

introduced New Generation Network (“NGN”) equipment

from Huawei, which allows OTA to further reduce the capital

expenditure and operating expense per subscriber. This technology

will be further expanded in 2007.

G S M O P E R A T I O N S

CEO: Hassan KabbaniCFO: Amr El Adawy


(“AMN” conducting business under the “Mobilis” name), the

mobile subsidiary of the incumbent telecommunications operator

Algérie Télécom, OTA was able to become Algeria’s leading

telecommunications operator.

While OTA has already invested considerably in its network, it

plans to make further investments to further increase the capacity

and maintain and improve the quality of its network to meet

market demand. Finally, as demand is growing and local content

is beginning to develop, OTA has started to rollout a range of

value-added multimedia services based on GPRS and enhanced

data rates for GSM evolution (“EDGE”) technologies, which are

designed to increase customer usage and boost loyalty.

Algerian Telecommunications Market

Telecommunications services in Algeria are provided principally

by Algérie Télécom, the incumbent state-owned

telecommunications operator, with respect to fixed-line services,

and by three GSM mobile operators, OTA, AMN and Wataniya

Telecom Algeria. Algérie Télécom held a monopoly position with

respect to basic fixed-line services until 2005, when OTH

announced the acquisition, jointly with Telecom Egypt, of a second

fixed-line license in Algeria.

License

OTA was granted a license in July 2001 to operate a nationwide

GSM telecommunications network, to provide a range of

telecommunications services in Algeria, to operate its own

backbone and to share or lease network infrastructure with or

to its operators. The license is a 15-year dual band license expiring

2016 with automatic renewal for two subsequent five-year terms

so long as OTA complies with the terms of the license. Renewal

is at no additional cost.

Djezzy the market leaderwith a 63.8% market share.

DjezzyALGERIA

Orascom Telecom Algeria SPA (“OTA”) operates a GSM network

in Algeria and provides a range of prepaid and postpaid products

encompassing voice, data and multimedia, using the corporate

brand “Orascom Telecom Algérie” and the dual commercial

brands of “Djezzy” and “Allo.” OTA was awarded the second

GSM license in Algeria in 2001 and launched its operations in

February 2002. OTA started with the brand “Djezzy” and

introduced the prepaid brand “Allo” in September 2004.

As of December 31, 2006, OTA’s network covered 93% of the

total population of Algeria and OTA served approximately

10.5 million subscribers, which represents a market share of

approximately 63.8% of total mobile subscribers. OTA accounted

for 35% of OTH’s consolidated net revenues 51% of OTH’s

consolidated EBITDA for the year ended December 31, 2006.

Despite launching its GSM operation approximately three years

after the launch of operations by Algerian Mobile Network


Subsidiary Highlights

Financial Data

Revenues (US$ 000)

EBITDA (US$ 000)

EBITDA Margin

Capex (US$ m)

Subscribers

Prepaid

Postpaid

Market Share

ARPU (US$) (3 months)

MOU (YTD)

Churn (YTD)

December 2005 December 2006 %

Operational Data

1,073,960

576,392

53.7%

457

7,109,009

6,866,200

242,809

66.7%

12.8

153

51.2%

1,531,242

991,478

64.7%

392

10,530,826

10,191,909

338,917

63.8%

13.0

147

63.5%

42.6%

72.0%

11.0%

(14.2%)

48.1%

48.4%

39.6%

(2.9%)

1.6%

(3.9%)

12.3%


of OTA’s total subscribers. OTA markets its prepaid services

using the “Djezzy Carte” and “Allo” commercial brands for

various customer offers to attract different market segments.

Ownership and Governance

Upon completion of an agreement to purchase an additional

1.21% stake in Oratel in November 2006, OTH directly and

indirectly owns 96.81% of OTA.

DjezzyALGERIA

GPRS data services as demand for these services develop, and

it launched its BlackBerry service in November 2006.

OTA offers both prepaid and postpaid services under its “Djezzy”

and “Allo” brands and has established itself as the market leader

in Algeria and has achieved high brand recognition. As of December

31, 2006, prepaid subscribers represented approximately 96.8%

We cover the fourcorners of Algeria

Services and Marketing

OTA provides both basic voice and value-added services to its

corporate and retail subscribers. In addition to basic voice

services, OTA provides its subscribers with value-added services

such as voicemail, calling line identification presentation or

restriction, missed call alert, call waiting/holding, call forwarding,

international roaming, detailed monthly billing and data services

such as SMS and MMS. OTA expects to provide more EDGE and

services in Pakistan. In July 2004, the PTA indicated that Mobilink’s

license will be renewed on July 5, 2007 for a further period of

15 years. The PTA confirmed the following payment schedule

for the license renewal: US$14.55 million to be payable in each

of July 2007, January 2008, July 2008 and January 2009;

US$29.1 million to be payable in each of July 2009, January 2010

and July 2010; and the balance of the fee to be paid in ten equal

installments of US$14.55 million with first installment payable

in July 2011.

share of approximately 46.3% of total mobile subscribers in

Pakistan. Mobilink accounted for 23% of OTH’s consolidated net

revenues and 21% of OTH’s consolidated EBITDA for the year

ended December 31, 2006.

In 2005, the entry by two new operators into the mobile

telecommunications market in Pakistan led to an increase in

market size and competition. Nevertheless, Mobilink’s recognition

within the market, its history of cash generation and profitability,

the support of its majority shareholder, and the existing coverage

and quality of its network provide Mobilink with a strong

foundation on which to consolidate its market leadership and

increase the competitive pressure it can impose on existing and

prospective operators.

Pakistani Telecommunications Market

Telecommunications services in Pakistan are provided by Pakistan

Telecommunications Limited (“PTCL”), the incumbent fixed-line

operator, of which 74% is state-owned and the remaining 26%

is held by Etisalat, with respect to fixed-line services, and by six

mobile operators.

Mobilink was awarded a license for mobile telecommunications

system and services in July 1992 and commenced GSM operations

in 1994, becoming the first company in Pakistan to set up and

operate a digital mobile network based on GSM 900 technology.

Telenor commenced operations in March 2005 and Al-Warid

Telecom launched operations in May 2005.

License

Mobilink was awarded a 15-year license in July 1992 to establish

and operate a digital cellular telecommunications system using

the GSM 900 standard and to offer telecommunications


CEO: Zouhair A. KhaliqCFO: Ehab Rochdy


The Mobilink network is the most extensive in Pakistan, reaching

over 56% of the total population of Pakistan and 95% of the

urban population as of December 31, 2006. As of December 31,

2006, Mobilink had invested more than US$2.0 billion in its

mobile communications network and had approximately 5,250

cell sites and 50 switches, Mobilink served over 22 million

subscribers as of December 31, 2006, representing a market

Serving over 22 millionsubscribers.

Pakistan Mobile Communications Limited (“Mobilink” or “PMCL”)

operates the leading GSM network in Pakistan and provides a

range of prepaid and postpaid voice and data telecommunications

services to both retail and corporate subscribers, using the brand

name “Mobilink.” Mobilink launched its operations in August

1994 after it was founded in 1990 as a joint venture between

Motorola and the Saif Group.

MobilinkPAKISTAN

MobilinkPAKISTAN


Mobilink markets its prepaid services using the “Jazz” trade name

and its postpaid services using the brand name “Indigo”. In addition

to basic voice services, Mobilink provides its subscribers with

value-added services such as voicemail, closed user group, SMS,

call waiting/holding, call forwarding, call line identification

presentation, free minutes and services such as MMS through its

GPRS platform. Mobilink is the first operator to start rolling out

Enhanced Data Rates for Global Evolution (EDGE) in Pakistan.

Network

As of December 31, 2006, Mobilink’s GSM network covered

more than 3,500 cities, towns and villages-approximately 95% of

the urban Pakistani population and over 56% of the total Pakistani

population and provided on-road coverage along all of the nation’s

major highways. In addition to 2G, 2.5G and EDGE compatibility,

Mobilink’s network offers technology such as GPRS and BlackBerry

services.


Financial Data

Revenues (US$ 000)

EBITDA (US$ 000)

EBITDA Margin

Capex (US$ m)

Subscribers

Prepaid

Postpaid

Market Share*


MOU (YTD)

Churn (YTD)


Operational Data

732,594

292,928

40.0%

615

11,119,196

10,831,067

288,129

51.4%

6.7

156

17.3%

1,017,239

406,537

40.0%

693

22,491,900

22,058,805

433,095

46.3%

4.1

130

8.0%

38.9%

38.8%

0.0%

12.7%

102.3%

103.7%

50.3%

(5.1%)

(38.8%)

(16.7%)

9.3%


As of December 31, 2006, Orascom Telecom had a 100% economic

interest in IWCPL, which in turn has an 88.69% economic interest

in Mobilink. The remaining equity is owned by a strategic investor.



Mobilink also launched its BlackBerry service in December 2005

through its GPRS platform, and which is the first and only

BlackBerry service provider in Pakistan.

* Market Share, as announced by the Pakistani Regulator is based on disclosed information by the other operators which use different subscriber recognition policies.


CEO: Alex ShalabyCFO: Khalid Ellaicy


Egyptian Telecommunications Market

Telecommunications services in Egypt are provided principally

by Telecom Egypt, the incumbent government-owned fixed-line

operator, with respect to fixed-line services, and by two GSM

mobile operators, Mobinil and Vodafone Egypt. In July 2006,

Etisalat, of the United Arab Emirates, won the auction to

operate Egypt’s third GSM mobile license which incorporates

an entitlement to use frequencies enabling 2G and 3G services

for US$2.9 billion. Telecom Egypt’s monopoly on fixed-line services

expired at the end of 2005 and the sector is currently in the

process of progressive liberalization.

License

Mobinil was granted a license in 1998 to operate a GSM mobile

telecommunications network and to provide a range of

telecommunications services in Egypt. The license, which was

amended in January 2005 by NTRA, is a 15-year dual band license

with automatic renewal for successive five-year periods if ECMS

complies with the requirements of the license. It is due to expire

in May 2013.

Network

As of December 31, 2006, Mobinil’s network covered

December 31, 2006, representing a market share of approximately

52.1% of total mobile subscribers.

Mobinil was the first telecommunications company to acquire

ISO 14001 certificate in Egypt and the Middle East. It has also

obtained official renewal of the ISO 14001 for the fourth

consecutive year.

The Egyptian Company for Mobile Services (“Mobinil” or “ECMS”)

operates the leading GSM network in Egypt and provides a range

of prepaid and postpaid voice and data telecommunications

services, using the brand name ‘‘Mobinil.’’ Mobinil launched its

operations in May 1998. As of December 31, 2006, Mobinil’s

network covered approximately 99% of the total population of

Egypt. Mobinil served over 9 million subscribers as of

MobinilEGYPT

The leading mobileoperator in Egypt.

its prepaid services using the ‘‘Mobinil ALO’’ trade name.

In anticipation of increased competition from Etisalat, and in

order to address continued rapid growth for mobile services in

Egypt, Mobinil is developing a strategy to address lower income

customers in Egypt. Such lower spending customers are expected

to represent an important component of increased mobile

market penetration in the future.


Financial Data

Revenues (US$ 000)

EBITDA (US$ 000)

EBITDA Margin

Capex (US$ m)

Subscribers

Prepaid

Postpaid

Market Share


MOU (YTD)

Churn (YTD)


Operational Data

923,752

474,360

51.4%

427

6,695,993

5,770,380

925,613

52.2%

11.1

161

11.4%

1,105,741

558,877

50.5%

358

9,266,815

8,359,760

907,055

52.1%

10.1

148

32.9%

19.7%

17.8%

(0.9%)

(16.2%)

38.4%

44.9%

(2.0%)

(0.1%)

(9.0%)

(8.1%)

21.5%


Mobinil is owned by OTH, FT Group and public market equity

investors. Orascom Telecom has a 33.03% economic interest,

and FT Group has a 36.34% economic interest, in ECMS. The

remaining shares of ECMS are publicly traded on the Cairo and

Alexandria Stock Exchange.



added services such as voicemail, caller identification, call

waiting/holding, call forwarding and data services such as SMS,

Information Services, MMS and WAP based on GPRS technologies.

Mobinil offers both prepaid and postpaid telephony services.

As of December 31, 2006, prepaid subscribers represented

approximately 90% of Mobinil’s total subscribers. Mobinil markets

approximately 16.9% of Egypt’s territory, enabling coverage of

approximately 99% of the population.

Mobinil provides both basic voice and value-added services to

its corporate and retail subscribers, although Mobinil’s revenues

are overwhelmingly driven by voice services. In addition to basic

voice services, Mobinil provides its mobile subscribers with value-

MobinilEGYPT

IraQnaIRAQ

Operating in adverseconditions.

Orascom Telecom Iraq Corp. (“IraQna” or “OTI”) and its wholly-

owned subsidiary, IraQna Company for Mobile Phone Services

Limited, operates a GSM network in Iraq, and provides a range

of prepaid and postpaid voice and data telecommunications

services using the brand name “IraQna.” IraQna launched its

operations in December 2003.

As of December 31, 2006, IraQna’s network covered

approximately 100% of Iraq’s total population in the central

region of Iraq and 82% of the southern region and is expanding

in the northern region. Of the three regions for which individual

licenses have been granted, the central region contains over 34%

of Iraq’s population, or approximately 9.3 million inhabitants. The

central region also contains some of Iraq’s wealthiest, most

urbanized and most industrial areas, including Baghdad and the

governorates of Anbar and Diyala.


CEO: Alain Sainte-MarieCFO: Leonidas Skarlatos


IraQna served approximately 3 million subscribers as of December

31, 2006, representing a market share of approximately 32.8% of

total mobile subscribers in Iraq.

In particular, IraQna faces operational difficulties ranging from

security risks affecting its employees and assets, lack of consistent

electricity, shortage of gasoline for generators, lack of experienced

personnel, an unstable financial system, an unwillingness of

insurance companies to provide coverage and logistical issues

relating to the delivery and storage of network equipment. As a

result of these difficulties, IraQna has experienced delays in the

supply of telecommunications equipment and SIM cards and has

not been able to deploy the network at a pace that it otherwise

would have been able to do and as a result incurs significant

expenses in connection with the security of its personnel and

property.

Iraqi Telecommunications Market

Fixed-line Telecommunications services in Iraq are provided

principally by the Iraq Telephone and Post Company (the “ITPC”),

with respect to fixed-line services. There are five GSM mobile

operators, IraQna, Asia-Cell, MTC Atheer, Korek Telecom and


Financial Data

Revenues (US$ 000)

EBITDA (US$ 000)

EBITDA Margin

Capex (US$ m)

Subscribers

Prepaid

Postpaid

Market Share*


MOU (YTD)

Churn (YTD)


Operational Data

333,267

232,736

69.8%

125

1,849,602

1,780,438

69,164

40.5%

20.8

344

20.3%

520,432

239,266

46.0%

90

2,904,166

2,852,075

52,091

32.8%

15.3

255

27.1%

56.2%

2.8%

(23.8%)

(28.0%)

57.0%

60.2%

(24.7%)

(7.7%)

(26.4%)

(25.9%)

6.8%

* Market share disclosed is based on disclosed information by Wataniya and MTC in which their definition of an active subscriber differs from OTH’s 3-month rule.




IraQna offers both basic voice and value-added services to its

corporate and retail subscribers. IraQna provides its subscribers

with value-added services such as voicemail, detailed monthly

billing, call line identification presentation, call waiting/holding,

call forwarding and international roaming and data services such

as SMS. IraQna offers both prepaid and postpaid telephony

services. As of December 31, 2006, prepaid subscribers

represented approximately 98% of IraQna’s total subscribers.


Orascom Telecom has a 100% economic interest in IraQna, since

it acquired the remaining shares which were owned by financial

investors and repaid all the shareholder loans for approximately

US$60 million, back in July 2005.

IraQnaIRAQ

Sanatel (the latter two are regional Kurdish operators operating

in Kurdistan).

License

Orascom Telecom led a consortium that the Iraqi Ministry of

Telecommunications designated in October 2003 as the winner

of a two-year license to provide mobile telephony services in

Iraq. In December 2005, a new interim license was granted for

a period of six months, however, this license expired on June 30,

2006 and IraQna has since been granted three further three-

month extensions on July 2006,September 2006 and January

2007 by way of interim licenses.

The latest interim license retained a revenue sharing obligation

which IraQna has been required to pay as of December 22, 2005.

Under this revenue sharing obligation, IraQna must pay 13% of

its revenues to the CMC in lieu of significant upfront license fees.

Network

As of December 31, 2006, IraQna’s network covered approximately

100% of the population in the central region of Iraq. Since

November 2004, IraQna’s network coverage has included Basra,

Najaf and Karbala in the southern region of Iraq and has been

extended to offer coverage to the Northern region of the country.


CEOs: Hesham SibliniScott Gegenheimer


License

OTT was granted a license in May 2002 to operate a national

GSM telecommunications network and to provide a range of

telecommunications services in Tunisia. The license was granted

for a fee of US$454 million, payable in two equal installments,

which were paid in May 2002 and September 2004.

OTT’s license has a duration of 15 years and is renewable for

consecutive five-year periods, provided that OTT has met its

obligations under the license in the prior period.

Network

As of December 31, 2006, Tunisiana’s network provided coverage over

Tunisian Telecommunications Market

Telecommunications services in Tunisia are provided principally

by Tunisie Télécom, the incumbent state-owned fixed-line operator,

with respect to fixed-line services, and by two GSM mobile

operators, Tunisiana and Tunisie Télécom. The duopoly in the GSM

mobile market shared by Tunisiana and Tunisie Télécom expired

on November 30, 2004. The Tunisian government has since part-

privatized Tunisie Télécom by selling a 35% stake of the company

to Dubai Group TeCom-DIG in March 2006.

Orascom Telecom Tunisie (“Tunisiana” or “OTT”) operates a

GSM network in Tunisia and provides a range of prepaid and

postpaid voice and data telecommunications services, using the

brand name “Tunisiana.” Tunisiana launched its operations in

December 2002. As of December 31, 2006, Tunisiana’s network

covered approximately 99% of the total population of Tunisia.

Tunisiana served over 3 million subscribers as of December 31,

2006, representing a market share of approximately 46.5% of

total mobile subscribers in Tunisia.

TunisianaTUNISIA

Tunisiana’s network coveredapproximately 99% of thetotal population of Tunisia.



Financial Data

Revenues (US$ 000)

EBITDA (US$ 000)

EBITDA Margin

Capex (US$ m)

Subscribers

Prepaid

Postpaid

Market Share


MOU (YTD)

Churn (YTD)


Operational Data

320,990

121,506

37.9%

106

2,257,662

2,228,638

29,024

42.8%

12.5

129

23.7%

456,071

224,515

49.2%

93

3,069,314

3,027,761

41,553

46.5%

13.3

132

40.7%

42.1%

84.8%

11.3%

(12.3%)

36.0%

35.9%

43.2%

3.7%

6.4%

2.3%

17.0%


2005, OTH increased its economic interest in OTT from 20.27%

to 50%. The remaining 50% interest is held by National Mobile

Telecommunications Company KSC (Wataniya Telecom), a Kuwaiti

telecommunications company.


Orascom Telecom has a 50% economic interest in OTT through

two wholly-owned subsidiaries which own 35% and 15% of the

shares in OTT, respectively. In a series of transactions during

forwarding, international roaming and data services such as SMS.

Tunisiana’s network deploys GPRS technology, which it launched

in February 2006, as well as EDGE technology. Tunisiana is

providing a range of value-added services based on these

technologies including MMS, internet, Data GPRS and EDGE.

Tunisiana offers both prepaid and postpaid telephony services.

As of December 31, 2006, prepaid subscribers represented

approximately 99% of Tunisiana’s total subscribers.

an area encompassing 99% of Tunisia’s population. Tunisiana’s network

consists of 1,366 cell sites, 10 switches. International traffic is serviced

through four international gateways.


Tunisiana provides both basic voice and value-added services to

its corporate and retail subscribers. In addition to basic voice

services, Tunisiana provides its subscribers with value-added

services such as voicemail, detailed monthly billing, call line

identification presentation or restriction, call waiting/holding, call

TunisianaTUNISIA

renewed on a yearly basis with the mutual consent of the parties.

Network

banglalink relaunched its GSM operations in February 2005 in

9 cities and by year end 2006 covered 61 districts with 1,351

cell sites on air, as compared to 67 sites on air when it was

acquired. As of December 31, 2006, banglalink’s network covered

approximately 53% of the territory and over 90% of the total

population of Bangladesh.


Sheba rebranded its operation under the trade name “banglalink”

shortly after it was acquired by Orascom Telecom. banglalink

provides its subscribers with basic voice services, messaging

services including SMS, SMS e-mail and SMS chat, and value-added

services such as voicemail, detailed monthly billing, call line

identification presentation or restriction, call waiting/ holding,

call forwarding and international roaming. banglalink offers a

prepaid and postpaid telephony service. As of December 31,

2006, prepaid subscribers represented approximately 96% of

banglalink’s total subscribers. It is currently rolling-out GPRS and

BlackBerry services.


Orascom Telecom owns 100% of the shares of banglalink.


CEO: Rashid KhanCFO: Ezz Heikel



Financial Data

Revenues (US$ 000)

EBITDA (US$ 000)

EBITDA Margin

Capex (US$ m)

Subscribers

Prepaid

Postpaid

Market Share


MOU (YTD)

Churn (YTD)


Operational Data

39,036

(38,842)

(99.5%)

113

1,221,761

1,176,704

45,057

12.0%

4.9

167

0.2%

93,520

(29,386)

(31.4%)

126

3,276,313

3,134,297

142,016

15.6%

3.1

143

13.6%

139.6%

24.3%

68.1%

11.5.%

168.2%

166.4%

215.2%

3.6%

(36.7%)

(14.4%)

13.4%

banglalinkBANGLADESH

by the Bangladeshi Telegraph and Telephone Board (the “BTTB”),

the incumbent state-owned fixed-line operator, with respect to

fixed-line services, and by six GSM mobile operators, Sheba

(banglalink), GrameenPhone, TM International (Bangladesh) Ltd.

(“TMIB”), Pacific Bangladesh Telecom Ltd, (“PBTL”), Teletalk Bangladesh

Ltd (“Teletalk”), a subsidiary of BTTB, and Al Warid Telecom (to

launch operations in 2007).

License

banglalink was issued a nationwide 15-year GSM license in November

1996 that will expire on November 11, 2011. The license may be

Sheba Telecom (Pvt.) Limited (“banglalink” or “Sheba”) operates

a GSM telecommunications business in Bangladesh and provides

a range of prepaid and postpaid voice and data telecommunications

services, using the brand name “banglalink.” As of December 31,

2006, banglalink’s network covers over 90% of the total population

of Bangladesh. banglalink estimates that it had a 15.6% market

share of total mobile subscribers and over 3.2 million subscribers

in Bangladesh as of December 31, 2006.

Bangladeshi Telecommunications Market

Telecommunications services in Bangladesh are provided principally

banglalink’s network coversover 90% of the totalpopulation of Bangladesh.

The license was reissued in June 2002.

Telecel Zimbabwe produces operational cash flow but Orascom

Telecom has experienced difficulties serving hard currency debt

and paying management fees due to a combination of Zimbabwean

exchange control regulations, tariff regulations, foreign currency

shortage, a hyperinflationary economic climate and the collapse

of the Zimbabwean currency.

Telecel Zimbabwe (Private) Limited (“Telecel Zimbabwe”) was

established in 1995 and began operating a GSM mobile network

in 1998. As of December 31, 2006, Telecel Zimbabwe served

approximately 0.15 million subscribers through its GSM network

which covers approximately 40% of the total population of

Zimbabwe. Telecel Zimbabwe estimates that it had a 16% market

share of total mobile subscribers in Zimbabwe as of December

31, 2006. Telecel Zimbabwe was deconsolidated from OTH’s

consolidated financial statements in December 31, 2003 as a

result of provisions under IAS relating to hyperinflationary

accounting.

Telecel Zimbabwe was awarded a 15-year non-exclusive license

in June 1998 to operate, develop and use leased lines to provide

GSM services throughout the country.


CEO: J.D. Swaim

TelecelZIMBABWE

GSMOperations Support• Internet

LINKdotNET• International Gateway / Cables

M-LinkMedcable - TWA

• Value Added ServicesArpu+

• Handsets and DistributionRing

• Infrastructure and ServicesOraslnvest

I N T E R N E T


• Launched Hosted CRM; the first in the region to offer

the sophisticated customer acquisition and retention tools.

• Connecting Enterprises, SMEs and companies through VPN

Solutions.

• Offering LINKDSL Max service, allowing the LINKDSL

subscribers to upgrade their speeds to whatever speed they

like, whenever it is suitable for them.

• Offering wireless local loops to serve clients in remote areas

and serve areas with weak infrastructures (physical local loops);

as well as to serve as back up to physical local loops.

• Introducing WiMAX for hi speed connections.

• Launched the E-mails control panel, where customers can

control their own E-mails.

• Offering Wifi Public Services capitalizing on the potential of

new wireless technologies as well as on the forecasted rise

in notebooks and mobile equipment use in Egypt. LINK Zone

offers state-of-the-art wireless broadband solutions for public

areas; coffee-shops, hotels amusement parks libraries galleries

and any other public serving project/s.

Corporate Business

• Enterprise sales have witnessed solid growth, especially in the

Government, General Business & Telecom Sectors. Our SME

sales have also witnessed highest year-on-year growth.

• LINKdotNET has achieved a great year in the GCC region

with key wins across sectors on the Enterprise sales front

adding more government entities to its client list pushing the

latest technologies LINKdotNET always pioneers to adopt

and push to clients. LINKdotNET was chosen in numerous

accounts across the GCC as a strategic partner in key projects

with the Government for its vast experience in delivering

state-of-the-art solutions to the Government sector through

G2E and G2C oriented projects.

• On the Online Advertising front, LINKdotNET succeeded to

continue its quest to increase the awareness of online

advertisement to corporate entities across sectors of the

GCC market while attaining a year-on-year increase in

sales and revenue targets.

The Infrastructure

• Upgraded the international bandwidth, due to the continuing

growth and demand of both the internet and data connectivity

solutions.

• Prepared the highly reliable network infrastructure to

support new protocols and technologies to enable triple play

services in the future.

• Upgraded the mail system to hosted messaging and collaboration

environment, offering messaging and collaboration features to

the mailboxes, making them also accessible through different

devices including mobile devices.

• LINKdotNET data center has grown to hold the largest data

traffic in Egypt around 140 Mbps.

• Enlarged the DSL coverage by opening new DSL pops in

several new areas.

• Introduced WiMAX technology to reach higher coverage

and remote areas.

Projects Highlighted in 2006

• Egypt Air portal: won a very strategic account which is

the development of the Egypt Air portal and hosted it in the

data centre.

• Avit WiMAX Contract: provides broadband data connectivity

for Egypt’s eight airports, through the WiMAX point to point

wireless solution; the solution includes integration of the

WiMAX network with current airports infrastructure.

• Mobinil wireless mailboxes: partnered with Mobinil to provide them

with mailboxes containing the wireless feature, so that Mobinil can

provide it to its customer as a way to promote the GPRS service.

LINKdotNET also provided Mobinil with a web interface to be

able to upgrade/downgrade users’ mailboxes to/from wireless

feature, create users and check username availability and have

detailed reports related to billing and actions.

LINKdotNETEGYPT

A well established name in the Internet solutions industry,

LINKdotNET enriched the use of the Internet by individuals and

companies. It delivers leading-edge technology solutions on both

the professional and entertainment levels. LINKdotNET’s line of

services extends from data communication, hosting and

consultancy, all the way to content provision, e-solutions and

online advertising.

LINKdotNET is a merger between two companies – Link Egypt

and In Touch Communications – owned by Orascom Telecom

Holding. Since then, the growth and expansion throughout the

region has positioned LINKdotNET as the region’s powerhouse

providing, maintaining, developing and promoting Internet solutions

and services. LINKdotNET is the leading regional provider of

value added services to clients who regard the Internet as an

integral part of their business plans. The strategic partners play

a central role in the development of LINKdotNET’s products

and service delivery. LINKdotNET has several such alliances with

both technology and industry leaders, specializing in everything

from equipment and communications, to applications and

platforms. Embracing the best expertise in the fields of technology

and innovation, LINKdotNET collaborates with leading companies

worldwide in the field of network communication. LINKdotNET

is also the partner of Microsoft, the global software giant, in

applications and platforms. This partnership is a cast-iron guarantee

that all of its customers will benefit from leading-edge solutions.

LINKdotNET is a Microsoft Gold Certified Partner in five

competency areas, and has achieved ISO 9001:2000 and CMMI

Level 3 Certifications.

In fulfilling its commitment of providing its clients with the most

recent and innovative solutions, LINKdotNET has launched the

following during 2006:

• Multiple Voice over IP Solutions over VPN Network, which

offer a range of new features and advantages over the traditional

phone lines.

• Various mail packages of the new Hosted Exchange Services

for clients with different mailbox needs.

I N T E R N E T

LINKdotNETEGYPT

• CRM web interface: Mobinil launched the BlackBerry

Enterprise email solution. Mobinil partnered with LINKdotNET

to provide support services and match all the specific

requirements requested by Mobinil.

Consumer Business

In terms of the dial-up service 07770777, LINKdotNET was able

to maintain its position as the number one free Internet number

in Egypt with the highest market share. LINKdotNET launched

many new services on link0777 website among them was Hello,

which is the first social network in the Middle East that contains

interactive services like blogs, forums, communities, and chat.

Games, a games sector that allows multiplayer online gaming

available on the website. Antivirus, it is considered the first online

scan engine in the Middle East. Also Negoom FM online streaming

was launched on link0777 allowing people from all over Egypt

to listen to this channel. Regarding LINKDSL, LINKdotNET

sustained its market leadership of ADSL service in Egypt. The

government’s new initiative was implemented in July lowering

the DSL monthly subscription to a minimum of L.E. 95 per

month. Therefore to be differentiated from competition and to

serve the clients better, LINKdotNET launched a group of new

services among them was LINKDSL Gaming, which is a gaming

service that allows multiplayer interaction online using LINKDSL

service. LINKDSL Guard, which is an antivirus service that allows

customers to scan their PCs online and learn how to protect

it from spam and credit card fraud. Multiple new payment options

such as online payment through the website, payment at EZEE

machines and at all Citibank EDM machines. LINKdotNET owns

and partners in several online properties, in which it is responsible

for web infrastructure and content development.

LINKdotNET’s Top Achievements for 2006

• LINKdotNET bagged the Gold Award in web development

for Banking & Financial Institutions at UAE Web Awards

ceremony in December 2006.

• Microsoft Egypt selected LINK Development for its Early

Adopters Award during their launch of Window Vista, Office

and Exchange in December 2006.

• Microsoft Egypt selected LINKdotNET for the second year in

a row as Telecom Partner of the Year for its efforts in implementing

Microsoft based solutions in the telecommunications sector at

the awards ceremony held in Greece in December 2006.

• LINKdotNET has been awarded "ISP of the Year" at the

CommsMEA awards 2006, held at Fairmont Dubai, UAE, in

September 2006.

• LINKdotNET successfully completed its appraisal for Capability

Maturity Model integration (CMMI level 3) certification.

• In 2006, LINKdotNET earned “Microsoft Gold Certified

Partner” in three new competencies: Custom Development

Solutions, Information Worker Solutions and Advanced

Infrastructure Solutions.

Social Responsibility

Stemming from its belief of its role in the society, Masrawy.com

proudly declares its sole and exclusive online responsibility

towards the Children@Risk Program initiated by Cilantro/

Nahdet El Mahrousa. Masrawy.com is taking the responsibility

of spreading online awareness of the program through covering

all issues of concern related to the problem of homeless children.


I N T E R N A T I O N A L G A T E W A Y / C A B L E S

Orascom Telecom owns 100% and 51% of MedCable and TWA,

respectively. The two fully-funded subsidiaries build and operate

undersea fiber optic cables to carry international voice and data

traffic between two of Orascom Telecom’s most significant

markets and international telecommunications hubs in Europe

and the Middle East.

The undersea cables will connect Algeria with France and Pakistan

with the United Arab Emirates and Oman. Alcatel Submarine

Networks is MedCable’s supplier, while Tyco Telecommunications

has supplied TWA. Both operations commenced in the second

half of 2006 and are currently operational.

MedcableTWA

in Europe act as the control center for all satellite operations

and interaction with all of the various international carrier

networks.

M-Link also offers private satellite circuits for corporate and

government customers that need dedicated circuits between

two points, typically between Africa and a location in Europe.

These customers lease the circuits from M-Link and employ

them for a variety of applications.

M-Link Teleport S.A. (“M-Link”), a 100% owned Belgian subsidiary,

is based in Europe and provides gateway services for Orascom

Telecom’s operations in Algeria, Tunisia, Pakistan, Iraq, Zimbabwe

and several other sub-Saharan operations that OTH disposed

of in the past two years, each of which routes telephone traffic

out of its respective country. M-Link interconnects this traffic

with international carriers, based on price and delivery capabilities,

for final delivery around the world. M-Link also provides in-

country transit services on a limited basis. M-Link’s headquarters

M-LinkBELGIUM


also exclusive deals were conducted with Free Music, High

Quality & Mirage to offer RBT content.

Another exclusive deal was also conducted with the “Egyptian

Football Federation” to have full digital rights for all the

Egyptian League & Egyptian Cup matches as well as the national

team matches under the umbrella of the “EFF”, this deal is

exclusive for 5 seasons.

Arpu+ is offering its partners with up to date technology in

WAP portals, VAS solutions & services:

- Arpu+ was given the full Management & Content aggregation

of the music section on WIND WAP Portal, this assignment

was given to Arpu+ as a result to its efforts in offering its

users with the latest music library, the portal was launched

in December 2006.

- Arpu+ managed to launch TV streaming on Mobinil Life, with

three main channels as a pilot phase: MBC, Mehwar & Al

Jazeera news channel.

- Arpu+ managed to launch its killer application the “Ring Back

Tone” successfully with three new Operators:

• Mobilink: launched in June 2006

• Djezzy: launched in June 2006

• banglalink: Launched in October 2006

- Arpu+ has succeeded to obtain licenses for its value added

services presented to both Tunisiana & Tunisie Telecom users.

In 2006 Arpu+ launched its new offices in Bangladesh & Tunisia

in addition to its main offices in Algeria, Iraq, Italy & Pakistan with

headquarters in Egypt.

V A L U E A D D E D S E R V I C E S

• Algeria: Djezzy

• Jordan: Fastlink, Mobilcom, Umniah, Express

• Iraq: IraQna

• Italy: WIND & Vodafone

• Pakistan: Mobilink

• Bangladesh: banglalink

• Tunisia: Tunisiana & Tunisie Telecom

• In addition to other operators in the Middle East

In 2006 Arpu+ managed to conduct successful deals with leading

companies to offer its users with the latest applications & contents:

- Application Providers: Game Loft, Airgames, Telecom Arabia,

Soft House, Linkage.

- Content Providers: Universal, SONY BMG, Warner, EMI, and

Arpu+, launched in 2003 with its head office in Egypt, has expanded

rapidly during 2005 & 2006 to become the leader in offering

Value Added Telecom Services in the Middle East & North Africa.

In addition, Arpu+ is planning to position itself as a key market

player in Europe.

Due to the efforts conducted to achieve its targets Arpu+

managed to enlarge its business in the different territories by

offering the latest telecom solutions & services.

2006 Achievements

The number of operators reached 30 operators in more than

16 countries such as:

• Egypt: Mobinil & Vodafone

Arpu+EGYPT

Logistics ServicesRing carries inventories, manages it and handles its related

automated distribution logistics on behalf of its customers.

State-of-the-art inventory management and distribution systems

are applied to handle and report business to their customers.

In Country DistributionRing provides its customers with outsourced distribution logistics

to their authorized dealers channels and retail outlets. Second

to none logistics and automated services are implemented to

assure their customers being fast to market and to maximize

their market coverage.

Prepaid total solutionsRing provides their customers with a full-prepaid product package

and its related distribution logistics.

Data management and activation services are also integrated

with the network operator systems.

Business 2 BusinessE-commerce and B2B applications are offered to further ease

the business with the dealer's channel of the network operator.

These applications are co-developed with local ISPs.

Data EntrySubscriber's information concerning pre-paid cellular services

is entered.

Ring 2006 Performance Indicators• Ring Algeria was selected as the Official L3 Authorized Service

Center in Algeria.

• Increased sales penetration and GSMA II deal (ULH)

• Now RING is the largest handset player in North Africa.

• Setup of a separate service organization (CaRing).

• Setup of RING Italy.

• Improved customer service resources and call center.

Commercial background2006 was a year of enhancement of Ring Group image through

the active marketing activities that impacted positively on sales

& trading by taking the leadership position amongst competitors.

H A N D S E T S A N D D I S T R I B U T I O N


confidence which places Ring as a number one in quality service

and customer satisfaction.

RING concept shops are not merely a place to sell or repair

mobile phones. Rather, they are modern lifestyle outlets providing

customers with delights of today’s hi-tech world.

Services Ring Provides• Supply Chain Management

• Logistics Services

• In-Country Distribution

• Wireless Products Procurement

• Product Customization

• Prepaid Total Solutions

• Business2Business

• Customer Care and Service Centers

• Retail Franchise

Supply Chain ManagementManaging the supply chain for Ring’s customers is one of their

key roles, they manage products forecast, and ordering & delivering

logistics from factories until products/services are carried in

retail and wholesale channels.

Historical backgroundRing was established in 2001 as a fully owned Orascom Telecom

Holding affiliate that focuses on GSM, distribution and related

services. Today Ring has grown to be the leading Nokia wholesaler

in Egypt and North Africa. Since 2003,Ring has established three

more centers, and now operates eight major logistics centers

in Algeria, Bangladesh, Dubai, Egypt, Iraq, Jordan, Tunisia and

Pakistan in order to provide network operators with in-country

logistics services, local distribution and prepaid solutions. Ring

is also developing franchise retail business with OTH operators

to increase its market penetration across the region.

Ring OfficesRing’s headquarters are located in Egypt. The company also

covers North African and Middle Eastern markets through its

subsidiaries in Algeria, Bangladesh, Dubai, Jordan, Iraq, Pakistan

Tunisia, with plans to setup in Italy.

Operational backgroundRing distribution focuses on GSM products distribution and

related services. The company provides its customers with

outsourced distribution logistics through its authorized dealer

channels and retail outlets. Ring’s logistics center also undertakes

several services on behalf of network operators or handset

manufacturers such as SIM locking, handset software upgrades,

custom branding and special bundle packaging. E-commerce and

B2B applications developed in cooperation with ISPs are also

offered to further ease the business with the dealer’s channel

of the network operator.

Quality is ImportantRING has built state-of-the-art service centers for NOKIA

mobile phone sets. Supported by top technology equipment and

software from Nokia and a highly trained team, Ring Service

Centers are categorized as the most advanced in the Middle

East. Introducing the concept of visible service centers for the

first time in Egypt, Ring provides its clients with the comfort and

RingEGYPT

added convenience of dealing with just one company to handle

different functions. First Service has managed over this period

of time to earn a reputation throughout the region for its

expertise as well as for being the first company to provide fully

integrated business services in the areas of:

Printing: bills, bank statements, promotional mailings, invitations,

greeting cards, and more, Enveloping, Delivery, Cash Collection, Customer

Call Centers: Inbound and Outbound, CD burning, Packaging:

SIM Cards, Scratch Cards, and Handsets, Inventory Management,

GIS mapping and Bad Debt collection.

With the increasing number of clients in different sectors, First

Service established a dedicated CRM department whose purpose

is to tailor and oversee execution of clients’ processes, interact

on daily basis with them to solve their problems and meet their

needs and to ensure that the clients’ internal processes are

followed to desired standards.

First Service Egypt added the services of Bad Debt collection

and customer credit worthiness investigation to its portfolio of

services by merging operationally with sister company “Collect”.

During 2006, new clients from the banking sector were CIB,

Housing and Development bank, El Watany Bank, Piraeus, Egyptian

Gulf Bank, AIB, Alex Bank, and BNP (Algeria) and from the

telecommunications sector: Lacom Algeria, from the insurance

companies: Alico and finally from ISPs:TE Data, Menatel and

Egynet.

MobiServe

MobiServe is recognized along the region, as the leading company

for providing specialized contracting activities in the field of

telecommunications infrastructure. MobiServe’s success is founded

on its reputation for consistently supplying high quality comprehensive

services to its clients backed by know how in this field.

OrasInvest was established in 1999 as a holding company to a

group of subsidiaries in the fields of services and telecommunications

technical contracting fields.

OrasInvest currently operates through two main subsidiaries:

MobiServe and First Service, while creating operational synergies

through its management team by offering support in HR, IT, legal,

purchasing and financial services. The group currently has existence

and is providing services in Egypt, Algeria, Tunisia, Pakistan,

Bangladesh, Iraq and UAE.

OrasInvest is aggressively pursuing opportunities locally and

globally in various domains such as telecommunication, banking,

utilities and others.

First Service

First Service provides a complete array of automated services

that enables a company to maximize efficiency and to gain the

OrasInvestEGYPT

I N F R A S T R U C T U R E A N D S E R V I C E S


MobiFactory was founded in 2005 to provide tubular and angular

masts and short towers of various heights up to 75 meters,

Satellite Communication: licensed VSAT (Very Small Aperture

Terminal) operator covering Africa and the Middle East. Mobiserve

is also involved in the construction of mobile switching centers

and full turnkey solutions for major construction projects.

MobiServe was the first company in the region to introduce

towers resembling palm trees that would blend neatly in the

environment.

Major Services

Telecommunication Infrastructure: which includes Site Acquisition,

Civil Contracting, Site Construction, Base Transceiver Site (BTS)

and Base Station Controller (BSC) Construction, Mobile Switching

Center (MSC) construction, Transmission site construction.

MobiServe was instrumental in the fast deployment of the

networks of Mobinil in Egypt, OTA in Algeria, Mobilink in Pakistan,

IraQna in Iraq, banglalink in Bangladesh and Du in the UAE.

Moreover, other major activities are operation and maintenance

activities, telecommunication engineering such as installation,

commissioning, testing and support of radio, micro-wave and

transmission equipment, manufacturing infrastructure components:

BoardMembers

B O A R D M E M B E R S


Family owning 98% of Weather.

These latest acquisitions mark a new milestone in Mr. Sawiris’s

long and successful career journey in leading the international

growth of both Orascom Telecom and Weather Investments.

Earlier on, in January 2003, Orascom Telecom represented by

Mr. Sawiris, was appointed as Board Member in the GSM

Association. The appointment came as a well earned recognition

for the regional role Orascom Telecom plays in the

telecommunication industry and an acknowledgement of the

efforts exerted by its founder, Mr. Sawiris, who has been the

driving force behind the company’s strategic success and visionary

regional expansion.

In addition, Mr. Sawiris is Chairman of the Board of Weather

Investments, Wind Telecommunication and the Egyptian Company

for Mobile Services (ECMS), commonly known as Mobinil.

Mr. Sawiris is a member of both the Board of Trustees and the

Board of Directors of the Arab Thought Foundation, a Board of

Trustees member and Head of the Financial Committee of the

French University in Cairo, a board member of the Egyptian

Counsel for Foreign Affairs and the Consumer Rights Protection

Association of Egypt. In addition , and as of January 2006,

Mr. Sawiris chairs the Egyptian side of the Egyptian Italian Business

Council. He holds a diploma of Mechanical Engineering with a

Masters in Technical Administration from the Swiss Institute of

Technology, ETH Switzerland and a Diploma from the German

Evangelical School, Cairo, Egypt. Mr. Sawiris is married, with four

children and lives in Cairo, Egypt. He speaks Arabic, English,

German and French.

Ahmed Maher El SayedBoard Member

Born September 14, 1935, graduated from the Faculty of Law,

Cairo University in 1956. He joined the Foreign Ministry in 1957

and served in Zurich, Kinshasa and Paris. Moreover, he served

in the departments of Arab Affairs, Consular Affairs and European

Department. From 1972-1974, he served in the Office of the

President’s National Security Advisor, Chief of Cabinet of Minister

of Foreign Affairs from 1974-1980 and as a member of the

Egyptian delegation at the Camp David negotiations in 1978 and

member of the Taba arbitration team.

Mr. El Sayed held the following positions:

Ambassador to Portugal (1980-1982), Ambassador to Belgium

and to the European Community (1983-1984), Head of Policy

Planning department (1984-1986), Head of Legal department

(1987-1988), participated in negotiations about Taba and arbitration

procedures, Ambassador to the USSR and then Russia (1988-

1992), Ambassador to the USA (1992-1999), Head of Arab League

Fund for Africa (2000-2001), Minister of Foreign Affairs (2001-

2004). He also publishes weekly articles in the leading newspaper

“Al Sharq Al Awsat”.

Ala M. El KhawajaBoard Member

Mr. El Khawaja was involved in his family business in 1984, which

focused on contracting in Kuwait and Jordan. He then went into

the hotelerie business, became Chairman & CEO of International

Continental Hotels Co., a company that owns Inter-Continental

Hotel in Hurghada. He became involved in other hotels in Tunisia,

Jordan, and other locations in the region. He is the Chairman of

Sea Front Diamond, Real Estate Company in Lebanon.

Soon after, he became a shareholder in different financial

institutions & industrial companies and slowly started to get

involved in the telecom sector in Jordan.

Naguib SawirisChairman & CEO - Orascom Telecom Holding S.A.E.Chairman of the Board - Wind Telecomunicazioni SpA

Since joining Orascom, the family business, in 1979, Naguib

Sawiris has continuously contributed to the growth and

diversification of the company into what it is today – one of

Egypt’s largest and most diversified conglomerates. The Orascom

Group is the country’s largest private sector employer and has

the largest market capitalization on the Cairo & Alexandria Stock

Exchange. Mr. Sawiris established and built the railway, information

technology, and telecommunications sectors of Orascom. The

extraordinary success of these ventures as well as the other

sectors of the company led to the management decision to split

Orascom into separate operating companies: Orascom Telecom

(OT), Orascom Construction Industries (OCI), Orascom Hotels

& Development and Orascom Technology Systems (OTS). Since

that time in late 1997 Orascom Telecom Holding S.A.E.(OTH)

was established, chaired and managed by Mr. Sawiris.

BOARD MEMBERS

Naguib SawirisChairman & CEO

Ala M. El KhawajaBoard Member

Ahmed Maher El SayedBoard Member

Alex ShalabyBoard Member

François DopfferBoard Member

Hassan AbdouBoard Member

Khaled E. IsmailBoard Member

Khaled G. BicharaBoard Member

Onsi SawirisBoard Member

As Chairman and CEO of Orascom Telecom Holding (OTH),

Mr. Sawiris has dynamically led the growth of the company, to

be the leading regional Telecom player and among the best

regarded Emerging Markets players in the world. OTH operates

GSM networks in seven different countries in the Middle East,

Africa, and South Asia with 51 million subscribers as at December

2006. In addition, it operates the leading Internet Service

Providers (ISPs), as well as satellite service providers.

After founding Weather Investments in early 2005, Mr. Naguib

Sawiris led the landmark leveraged buyout of a majority of Wind

Telecommunications in Italy and took over management as its

Chairman in late summer 2005. Followed by that, he led OTH

in December 2005, in the purchase of a 19.3% stake in Hutchison

Telecommunications International Limited. Most recently, in

November 2006, Wind Telecommunications floated the largest

ever PIK debt in Europe with proceeds used to complete the

buyout of Wind from ENEL resulting in the Sawiris

BOARD MEMBERS

Alex ShalabyBoard Member

Mr. Shalaby is the President and CEO of ECMS (Mobinil). Before

joining OTH and Mobinil in 1998, he was the Director of

Government Affairs for AT&T based in Washington, DC, a company

with which he spent over 28 years in many countries and with

different responsibilities

Between 1970-1993, he was the Managing Director for AT&T

in Egypt, and General Manager for the Middle East and North

Africa region. During this period, he established and secured a

solid position for AT&T in Egypt and a number of markets in

North Africa and the Gulf Region.

Between 1993-1995, he was the Regional Director for International

Public Affairs for AT&T, based in Cairo, Egypt, where he was the

principal interface with key agencies within the governments in

the region on matters impacting AT&T’s operations. This was a

critical period preceding the wave of privatization within the

telecommunication sector. He established the first presence for

AT&T in a number of countries of the Middle East, as well as in

South Africa.

Mr. Shalaby holds a Bachelors of Science degree in Electrical

Engineering from Alexandria University and a Master of Science

degree in Electrical Engineering and Computer Sciences from

San Jose State University, California.

François DopfferBoard Member

Mr. Dopffer is a former French Ambassador to Turkey (1991-96)

and to Egypt (2000-2002). He has extensive knowledge of North

Africa, Middle East and Asian countries where he served in

different positions. He holds degrees in political science (IEP

Paris), public management (ENA) and law (Paris University).

Hassan AbdouBoard Member

Mr. Abdou is currently Chief Executive Officer of Weather

Investments II, which was formed in 2005 as the majority owner

of Weather Investments, a global telecom company owning and

controlling Orascom Telecom, Wind Telecommunications in Italy

and most recently TIM Hellas in Greece. Mr. Abdou is an active

board member in Weather, Wind and OT and in addition, sits on

the board and executive committees of several IT, telecom and

media companies in Europe, Egypt and the Middle East.

Prior to his involvement with the Orascom Group which started

in 2003, he was Chief Investment Officer of EFG-Hermes Private

Equity and the Horus Private Equity Fund where he was Fund

Manager since 1997.

Prior to his return to Egypt, he was a consultant in the New

York office of the Boston Consulting Group where he worked

with Fortune 500 companies in such areas as Telecommunications,

Media & Entertainment, Energy and Pharmaceuticals.

In addition to his activities in the region, Mr. Abdou is a member

of the Advisory Board of the New York Private Placement

Exchange (NYPPE).

Mr. Abdou received his Bachelor of Science in Mechanical

Engineering from the University of Pennsylvania and a Bachelor

of Science in Economics from the Wharton Business School. In

addition, he received his MBA from the Harvard Business School.

Dr. Khaled E. IsmailBoard Member

Dr. Khaled Ismail has recently joined OTH as a GSM Services

Officer, in charge of mobile services, and strategic directions for

convergence including WiMAX.

B O A R D M E M B E R S


Prior to that, Dr. Ismail was the senior advisor of the Egyptian

Minister of CIT, responsible for technology development.

Dr. Ismail is the CEO of SySDSoft, a company focused on the

design of wireless digital communication systems. Prior to that,

he was a manager at IBM Research Center in NY. He is the

recipient of the IBM Invention Achievement Award and the IBM

Outstanding Technical Achievement Award in 1997 and 1995,

respectively. He is also the recipient of the IEEE Honorary Society

(Eta Kapa Nu) Best Young Electrical Engineer in the US award in

1994, and the Shuman Award for the Young Arab Engineer in 1995.

Dr. Ismail received his Ph.D. from the Massachusetts Institute of

Technology in 1989. He is an IEEE Fellow since 1997. He has

published over 150 papers in international journals and holds

15 patents.

Khaled G. BicharaBoard Member

Mr. Bichara is the Chief Fixed and Portal of Wind Telecomunicazioni

S.p.A. He is also the co-founder and Chairman of LINKdotNET

(LDN) the largest private Internet Service Provider (ISP) in the

Middle East.

Mr. Bichara sits on the board of Tellas S.A., on the board of

ARPU+, as well as the board of dotMOBI mtld ltd.

Since September 2005, Mr. Bichara is undertaking the restructuring

of Wind’s Fixed and Portal Business unit.

In his previous capacity as LINKdotNET CEO, Mr. Bichara

instituted many firsts in the Internet market. He developed and

launched MSN Arabia in partnership with Microsoft.

He has spearheaded many mergers and acquisitions for

LINKdotNET starting with LINK Egypt and InTouch

Communications in June 2000. The latest being the acquisition

of nine leading Egyptian Internet companies, officially announced

May 2002, in a share swap deal.

Mr. Bichara earned his BSc. Degree from the American University

in Cairo with a major in Computer Science and a minor in

Business Administration in 1993. He is an active member of the

software community in the Middle East; a founding member of

Egyptian Software Association, Internet Society of Egypt and The

Egyptian Electronic Commerce Committee.

Onsi SawirisBoard Member

Mr. Sawiris is an Egyptian citizen born in Egypt in 1930 and holds

a Bachelor Degree of Science in Engineering from the Cairo

University.

Mr. Sawiris serves as the Chairman of Orascom for Hotel &

Development, Orascom Technology Systems, Orascom Trading

Co., Orascom Construction Industries (OCI) and the Egyptian

Cement Co. (ECC).

Mr. Sawiris also serves as a Chairman of the Board of Directors

for Misr Exterior Bank, Pharaonic AIG Insurance Co and YMCA

in Cairo.

2006 FinancialReview• Board Report• Financial Statements:

-Egyptian Accounting Standards (in LE)-International Financial Reporting Standards (in US$)

* Algeria’s proportionate subscribers are calculated on the basis of 96.81% ownership in December 2006, 95.6% ownership in September 2006, and 87.68% in December 2005.

OTH has increased its proportionate subscribers to reach 41 million, an 83% increase year-on-year.

Table 1: Total SubscribersSubsidiary 31 December

200530 September

200631 December

2006Inc/(dec)

Dec. 2006 vs.Dec. 2005

Djezzy (Algeria)Mobilink (Pakistan)Mobinil (Egypt)Iraqna (Iraq)Tunisiana (Tunisia)Banglalink (Bangladesh)Telecel (Africa)1

Grand Total

7,109,00911,119,1966,695,9931,849,6022,257,6621,221,761129,391

30,382,614

10,005,20020,249,9698,106,0842,498,2532,821,6132,696,800

143,829

46,521,748

10,530,82622,491,9009,266,8152,904,1663,069,3143,276,313148,785

51,688,119

48%102%38%57%36%

168%15%

70%

1. Telecel ref lects Telecel Zimbabwe subscibers only.

Table 2: Total Proportionate SubscribersSubsidiary 31 December

200530 September

200631 December

2006Inc/(dec)

Dec. 2006 vs.Dec. 2005

Djezzy (Algeria)*Mobilink (Pakistan)Mobinil (Egypt)Iraqna (Iraq)Tunisiana (Tunisia)Banglalink (Bangladesh)Telecel (Africa)

Grand Total

6,233,1799,861,6152,093,1671,849,6021,128,8311,221,761

77,635

22,465,790

9,564,97117,959,6982,677,4402,498,2531,410,8072,696,800

86,297

36,894,266

10,194,89319,948,0663,061,0602,904,1661,534,6573,276,313

89,271

41,008,426

64%102%46%57%36%

168%15%

83%

Table 3: Blended Average Revenue Per User (ARPU)Subsidiary 31 December

2005 US$

(3 Months)

30 September

2006 US$

(3 Months)

31 December

2006 US$

(3 Months)

Inc/(dec)

Dec. 2006 vs.

Dec. 2005

Djezzy (Algeria)

Mobilink (Pakistan)

Mobinil (Egypt)1

Iraqna (Iraq)

Tunisiana (Tunisia)

Banglalink (Bangladesh)

Global ARPU2

12.8

6.7

11.1

20.8

12.5

4.9

12.5

13.8

4.5

11.3

16.9

14.8

3.3

9.4

13.0

4.1

10.1

15.3

13.3

3.1

8.9

1.6%

(38.8%)

(9.0%)

(26.4%)

6.4%

(36.7%)

(28.8%)

1. ARPU expressed under OTH’s definition may differ from Mobinil’s disclosed ARPU. Please see Appendix for definition.

2. Global ARPU is calculated on a Year to date basis, taking into account the weighted average subscribers for calculation.

Orascom Telecom Holding (OTH) full year 2006 consolidated results.

Highlights

• Total subscribers exceeded 51 million, an increase of 70% overDecember 2005.

• Proportionate subscribers exceeded 41 million, an increase of 83%over December 2005.

• Revenues of US$ 4,401 million (LE 25,327 million1), an increase of36% over December 2005.

• EBITDA reached US$ 1,954 million (LE 11,318 million1), an increaseof 43% over December 2005.

• Group EBITDA margin stood at 44.4%.GSM EBITDA2 margin stood at 50.5%. EBITDA margins of the majorsubsidiaries are: Djezzy 64.7%, Mobilink 40.0%, Mobinil 49.7%, Iraqna46.0% and Tunisiana 47.0%.

• Net income for the period reached US$ 719 million (LE 4,198 million1)an increase of 8% over December 2005.

• Earnings per Share reached US$ 3.31 vs. US$ 3.05 in December 2005.• Net debt stood at US$ 3,433 million (LE 19,681 million1) on

31 December 2006. Net Debt/EBITDA3 for the period is 1.76.

1. US$ f inancial f igures in the Income statement & Balance Sheet are according to the

International Financial Reporting Standards (IFRS).

2. GSM EBITDA margin excludes: Telecel.

3. EBITDA is calculated on the basis of the last twelve months.

Table 4: Market Share & Competition

Country Brand name 30 September2006

31 December2006

Names of additionalnetwork operations

64.7%48.9%50.5%33.4%45.6%15.3%16.0%

63.8%46.3%52.1%32.8%46.5%15.6%16.0%

AMN, WataniyaU-Fone, Instaphone, Paktel, Telenor, Al Warid

Vodafone, EtisalatWataniya, MTCTunisie Telecom

Grameen, Aktel, Citycell, BTTB, Al WaridEconet, Net One

Table 5: Capital Expenditure of OTH Subsidiaries for December 31, 2006

Number ofadditional

networkoperations

Market Share (%)

AlgeriaPakistanEgyptIraq2

TunisiaBangladeshZimbabwe

DjezzyMobilink1

MobinilIraqna

TunisianaBanglalink

Tel Zim

2522152

Country Service name TotalUS$ million

2005

457615

4271

125106113

31510

1,871

58%

3926933589093

12629

19

1,782

40%

Inc/(dec)

AlgeriaPakistanEgyptIraqTunisiaBangladeshAfrica

Total

Capex/Sales

DjezzyMobilinkMobinil

IraqnaTunisiana

BanglalinkTelecel

M-Link & MedcableOther2

(14%)13%

(16%)(28%)(12%)12%

(33%)(40%)90%

(5%)

(18%)

TotalUS$ million

2006

1. Capex in Mobinil includes a license fee of US$ 110 million, to be paid over three years.

2. Other Companies include OrasInvest, OT Holding and Ring.

ARPUs continued to decline in Mobilink & Banglalink as the subscriber base continued to grow reaching lower income levels. However, with the continued programof subscriber cleanup of dormant subscribers, ARPUs increased in Djezzy & Tunisiana.

Operational Performance

During 2006, Orascom Telecom continued its aggressive strategy and added over 20 million subscribers; a 70% increase over December 2005. Mobilinkreached approximately 22.5 million subscribers adding over 11 million customers in 12 months, Djezzy added over 3 million, Mobinil 2.5 million, andBanglalink reached approximately 3 million subscribers after 2 years of operations.

1. Market share, as announced by the Pakistani Regulator is based on disclosed information by the other operators which use different subscriber recognition policies.

2. Market share disclosed is based on disclosed information by Wataniya and MTC in which their definition of an active subscriber differs from OTH’s 3-month rule.

Capex reached US$ 1,782 million, a 5% decrease over 2005. Capex/Sales reached 40% vs. 58% in 2005, an 18% decrease.


Main Financial Events

Refinancing of US$ 1.2 Billion Vendor NoteIn March 2006, OTH announced that it extinguished a US$ 1.2 billion vendornote issued by Hutchison Whampoa Limited in connection with OTH’sacquisition of a 19.3% stake in Hutchison Telecom International Limited. Thenote was paid by drawing on a US$ 2 billion senior secured facility.

Treasury SharesIn March 2006, OTH announced that it will start buying treasury shares withthe potential of reaching two million shares. On April 2006, OTH completedthe purchase of the two million Treasury Shares.

Dividend PaymentIn June 2006, OTH announced a dividend payment of LE 3.75 per share.

Orascom Telecom Algeria Secures Additional FinancingIn June 2006, OTH announced that Orascom Telecom Algeria (“OTA”) securedUS$ 307 million of additional long term financing on May 30th, 2006. Thefacilities have a five year maturity. They comprise an Algerian Dinar (“DZD”)denominated tranche for the equivalent of US$ 103 million; Coface andHermes-Euler, the French and German export credit agencies, guarantee twoadditional US$ denominated tranches for US$ 137 million and US$ 67 millionrespectively. The proceeds will be used to finance additional investments drivenby OTA’s continuing expansion, and to partially prepay OTA’s existingindebtedness denominated in Euro in the first half of 2007. The refinancingof part of OTA’s existing debt by DZD and US$ denominated facilities willnotably reduce OTA’s exposure to foreign exchange risk, as the Algerian Dinaris relatively more stable against the US$ than against the Euro.

Orascom Telecom Considering Increase in Public Stake in MobinilIn June 2006, OTH announced its interest in buying up to 3.5% of the sharesof the Egyptian Company for Mobile Services ("ECMS"). The possible purchaseof the ECMS shares will be dependant on prevailing market conditions.

Orascom Telecom Acquires Minority Stake in its Algerian GSM OperationIn October and November 2006, OTH signed an agreement to purchase a7.91% and 1.21% respectively in its Algerian GSM Operation, Orascom TelecomAlgeria (“OTA”), OTH directly and indirectly owns 96.81% of OTA.

Orascom Telecom’s Pakistani Mobile Operator Completes US$ 250million Bond OfferingIn November 2006, OTH announced that its GSM mobile services operationin Pakistan (“Mobilink”), has successfully priced and placed US$250 millionof Senior Notes due 2013 (the “Notes”). Mobilink was rated B1 and B+ andthe Notes were rated B3 and B+ by Moody’s and Standard & Poor’s respectively.Mobilink’s credit rating is one notch better than Moody’s rating of the Pakistanisovereign (B2) and at the same level as Standard & Poor’s rating of the Pakistanisovereign (B+). The offering is a benchmark transaction for Mobilink and for

Pakistan. It is the first ever international Rule 144A/Regulation S high yieldbond offering by a Pakistani corporate issuer and is also the first internationalcorporate bond issuance by a Pakistani corporate issuer in 12 years. The Notes,which mature on November 13, 2013 and bear interest at a rate of 8.625% perannum, will be callable beginning in November 2010 and include typical highyield covenants. The proceeds of the issue will be used to fund ongoing capitalexpenditure for Mobilink’s network expansion and to repay a US$100 millionbridge facility drawn during the third quarter.

The Sawiris Family increases its stake in Weather to 97%In December 2006, OTH has been notified by Mr. Naguib Sawiris that WeatherInvestments II S.a.r.l. (“Weather II”), fully owned by the Sawiris Family andcontrolled by Mr. Naguib Sawiris, has increased its stake in Weather InvestmentsS.P.A. (“Weather SPA”) to 97%. The deal entails Enel selling its entire 26.1%stake. Weather SPA owns and controls 100% of Wind Telecomunicazioni S.P.A.(“Wind”) in Italy, 100% of TIM Hellas in Greece, and 50% plus 1 share ofOTH.

Orascom Telecom Subscriber Base Exceeds 50 MillionIn December 2006, OTH announced its subscriber base exceeded the 50million benchmark.

Orascom Telecom Potential Buy Back of GDRsIn January 2007, OTH announced that it will continue to evaluate a numberof investment opportunities, including acquisitions of new licenses andestablished operators, as well as repurchases of minority stakes in existingOrascom Telecom operations. In addition, OTH continues to evaluateopportunistic repurchases of its GDRs in light of favorable relative marketvaluations. In order to provide the flexibility to repurchase GDRs in the futureas suitable conditions prevail, Orascom Telecom announced a potential on-market GDR repurchase plan of up to the GDR equivalent of 5% of theoutstanding shares (approximately 11 million shares) over the next 12 months.

Orascom Telecom’s Iraqi Mobile Operation License ExtensionIn January 2007, OTH announced that Iraqna has been granted a further threemonth extension to its current interim license which will end in March 31,2007. The license in Iraq has been extended several times since it expired backin December 2005.

Orascom Telecom Holding Completes US$ 750 million Bond OfferingIn February 2007, OTH announced that it has successfully priced and placedUS$ 750 million of Senior Notes due 2014.The transaction was increased fromUS$ 500 million due to favorable pricing and very strong investor demand.The offering is a milestone for Orascom Telecom, for Egyptian corporateissuers and for emerging markets in Europe, the Middle East, Africa and Asia.

Table 6: Consolidated Revenues

GSMDjezzy (Algeria) 1,073,960 1,531,242 43% 409,863 399,938 (2%)Mobilink (Pakistan) 732,594 1,017,239 39% 250,242 266,743 7%Mobinil (Egypt) 418,894 511,961 22% 140,636 141,844 1%Iraqna (Iraq) 333,267 520,432 56% 127,040 128,727 1%Tunisiana (Tunisia) 156,283 217,582 39% 61,255 58,665 (4%)Banglalink (Bangladesh) 39,036 93,520 140% 26,306 30,884 17%Telecel (Africa) 6,916 — na — — naLibertis (Congo Brazzaville) 32,281 — na — — naTotal GSM 2,793,231 3,891,976 39% 1,015,342 1,026,801 1%Telecom Services

Ring 311,950 332,993 7% 95,335 109,313 15%M-Link & MedCable 63,560 99,977 57% 27,172 25,561 (6%)OrasInvest 22,417 30,576 36% 6,164 10,024 63%Other1 11,199 13,098 17% 3,903 4,047 4%

Total Telecom Services 409,126 476,644 17% 132,574 148,945 12%Internet Services 23,473 32,364 38% 8,423 9,073 8%OT Holding — — na — — na

Total Consolidated 3,225,830 4,400,984 36% 1,156,339 1,184,819 2%

Subsidiary 31 December2005

US$ (000)

31 December2006

US$ (000)

Inc/(dec)

Q3 – 2006(3 months)US$ (000)

Q4 – 2006(3 months)US$ (000)

Inc/(dec)

1. Other Telecom Services Companies include ARPU+, C.A.T., Contra BVI, Contra Egypt, Onward Technologies, and Pharoah.

Financial Review

RevenuesOTH embarked on another year of growth with a 36% increase year-on-year in its revenues to reach US$ 4,401 million (LE 25,327 million). Growth in revenueswas positively affected by the growth in subscribers and ARPU stabilization in some of the markets which contributed to this increase. OTA continued to be thehighest contributor with 35% of total revenues followed by Mobilink 23%, Iraqna 12%, and Mobinil at 11.6%.


Table 8: Consolidated EBITDA Margin

GSMDjezzy (Algeria) 53.7% 64.7% 11.0% 63.7% 70.2% 6.5%Mobilink (Pakistan) 40.0% 40.0% 0% 41.9% 40.7% (1.2%)Mobinil (Egypt) 50.3% 49.7% (0.6%) 54.4% 43.5% (10.9%)Iraqna (Iraq)1 69.8% 46.0% (23.8%) 44.6% 40.9% (3.7%)Tunisiana (Tunisia) 41.6% 47.0% 5.4% 47.1% 46.3% (0.8%)Banglalink (Bangladesh) (99.5%) (31.4%) 68.1% (25.5%) (25.5%) 0%

Total GSM2 48.6% 50.5% 1.9% 51.3% 50.9% (0.4%)Telecom Services

Ring 11.0% 5.7% (5.3%) 4.6% 5.0% 0.4%M-Link & MedCable 38.2% 38.1% (0.1%) 33.2% 37.6% 4.4%OrasInvest 29.8% 3.3% (26.5%) (21.0%) (5.2%) 15.8%Other3 (0.1%) (77.4%) (77.3%) (103.6%) (40.2%) 63.4%

Total Telecom Services 16.0% 10.0% (6.0%) 6.1% 8.7% 2.6%Internet Services 20.4% 20.4% 0% 20.2% 19.1% (1.1%)

EBITDA Margin 42.3% 44.4% 2.1% 44.5% 44.0% (0.5%)

Subsidiary 31 December

2005

31 December

2006

Change Q3 – 2006

(3 months)

Q4 – 2006

(3 months)

Change

1. Starting from 2006, Iraqna started paying 13% revenue share under the new license renewal terms.

2. GSM EBITDA margin excludes: Telecel in 2006 and Telecel & Libertis in 2005.

3. Other Telecom Services Companies include ARPU+, C.A.T., Contra BVI, Contra Egypt, Onward Technologies, OT Wireless Europe, OT WIMAX, Pharoah, and TWA.

Table 9: Foreign Exchange Rates used in the Income Statement & Balance Sheet

Egyptian Pound / US Dollar 0.1722 0.1736 0.1738 0.1738 0.1740 0.1744Algerian Dinar / US Dollar 0.0136 0.0137 0.0138 0.0136 0.0139 0.0140Tunisian Dinar / US Dollar 0.7671 0.7500 0.7536 0.7335 0.7500 0.7710Pakistan Rupee / US Dollar 0.0168 0.0167 0.0166 0.0167 0.0166 0.0164Bangladeshi Taka / US Dollar 0.0153 0.0142 0.0143 0.0147 0.0147 0.0144

Currency Dec. 2005 Sept. 2006 Dec. 2006 Dec. 2005 Sept. 2006 Dec. 2006

Income Statement Balance Sheet

Source: Egyptian banks

EBITDAConsolidated EBITDA reached US$ 1,954 million; a 43% increase year-on year and Group EBITDA Margin reached 44.4%.

Table 7: Consolidated EBITDA1

GSMDjezzy (Algeria) 576,392 991,478 72% 261,148 280,606 7%Mobilink (Pakistan) 292,928 406,537 39% 104,904 108,534 3%Mobinil (Egypt) 210,568 254,647 21% 76,439 61,713 (19%)Iraqna (Iraq)2 232,736 239,266 3% 56,640 52,586 (7%)Tunisiana (Tunisia) 65,086 102,237 57% 28,867 27,178 (6%)Banglalink (Bangladesh) (38,842) (29,386) 24% (6,704) (7,887) (18%)Telecel (Africa)3 (20,872) (9,454) na 331 565 naLibertis (Congo Brazzaville)3 13,649 — na — — na

Total GSM 1,331,645 1,955,325 47% 521,625 523,295 0%Telecom Services

Ring 34,408 18,887 (45%) 4,388 5,479 25%M-Link & MedCable 24,300 38,053 57% 9,029 9,610 6%OrasInvest 6,670 1,0044 (85%) (1,296) (526) 59%Other5 (14) (10,134) na (4,043) (1,626) 60%

Total Telecom Services 65,364 47,810 (27%) 8,078 12,937 60%Internet Services 4,791 6,604 38% 1,705 1,736 2%OT Holding & Others6 (38,532) (55,585) na (17,391) (16,441) na

Total Consolidated 1,363,268 1,954,154 43% 514,017 521,527 1%

Subsidiary 31 December

2005

US$ (000)

31 December

2006

US$ (000)

Inc/

(dec)

Q3 – 2006

(3 months)

US$ (000)

Q4 – 2006

(3 months)

US$ (000)

Inc/

(dec)

1. EBITDA excludes management fees which were previously treated as a cost in each subsidiary and as a revenue for the Holding.

2. Starting from 2006, Iraqna started paying 13% revenue share under the new license renewal terms.

3. OTH divested Oasis Telecom in DRC in September 2005, and Libertis in December 2005.

4. OrasInvest EBITDA includes eliminations of Q1 & Q2.

5. Other Telecom Services Companies include ARPU+, C.A.T., Contra BVI, Contra Egypt, Onward Technologies, OT Wireless Europe, OT WIMAX, Pharoah, and TWA.

6. Other non operating companies include: Cortex, Eurasia, Moga Holding, Oratel, OT ESOP, OT Services Europe, and Pioneers.


Net IncomeNet Income for the period reached US$ 719 million (LE 4,198 million) an 8% increase over December 2005. Earnings per GDR increased from US$ 3.05 in December2005 to US$ 3.31 in December 2006.

Table 10: Income Statement in IFRS/US$

Revenues 3,225,830 4,400,984 36% 1,156,339 1,184,819 2%Total Cost (1,111,458) (1,501,861) (391,277) (426,079)Gross Profit 2,114,372 2,899,123 765,062 758,740Total Expense (725,443) (935,720) (245,163) (238,535)Others (25,661) (9,249) (5,882) 1,322EBITDA1 1,363,268 1,954,154 43% 514,017 521,527 1%

Depreciation & Amortization (427,664) (588,359) (153,714) (167,849)Net Interest Expense (137,786) (339,251) (85,777) (86,448)Foreign Exchange Gain (Loss) 56,423 (45,356) 15,299 (14,913)Capital Loss (703) (3,804) (3,234) (898)Share of Gain of Associates — (18,700)2 — (18,750)Gain from Sale of Investments 70,577 4,859 4,321 4Other Income 3,300 6,401 1,107 1,544

Profit Before Tax 927,415 969,944 5% 292,019 234,217 (20%)

Income Tax (142,866) (183,719) (54,128) (49,808)Profit for the Period 784,549 786,225 0% 237,891 184,409 (22%)

Attributable to:Equity Holders of the Parent3 666,732 718,970 8% 218,664 169,168 (23%)Earnings Per Share (US$/GDR) 3.05 3.314 9% 1.0 0.78 (22%)

Minority Interest 117,817 67,255 19,227 15,241

Net Income 784,549 786,225 0% 237,891 184,409 (22%)

31 December2005

US$ (000)

31 December2006

US$ (000)

Inc/(dec)

Q3 – 2006(3 months)US$ (000)

Q4 – 2006(3 months)US$ (000)

Inc/(dec)

1. Management Presentation developed from IFRS financials.

2. The assumption for reporting HTIL in the income statement are as follows: Amortization of the Identifiable Intangible Assets resulted from the Purchase Price Allocation study, the Deferred tax gain resulted

from the Amortization of the Identifiable Intangible Assets, and OTH Share in HTIL net income as at September 2006.

3. Equates to Net Income after Minority Interest.

4. Based on a weighted average for the outstanding number of shares of 217,362,744 shares.

Balance Sheet

Table 11: Balance Sheet in IFRS/US$

IFRS/US$31 December 2005

US$ (000)

IFRS/US$31 December 2006

US$ (000)

AssetsProperty and Equipment (net) 2,362,165 3,322,240Property and Equipment under Construction 556,698 718,893Goodwill (net) 496,089 718,889Other Non-Current Assets 2,458,689 2,319,379Total Non-Current Assets 5,873,641 7,079,401

Cash 286,891 756,198Trade and Other Receivables (net) 361,269 214,337Other Current Assets 395,552 624,918Total Current Assets 1,043,712 1,595,453

Total Assets 6,917,353 8,674,854

Total Shareholder's Equity 1,548,572 2,062,759Minority Share 123,299 125,223Total Equity 1,671,871 2,187,982

LiabilitiesLong Term Debt 1,547,610 3,580,236Other Long term Liabilities 264,847 236,923Total Long Term Liabilities 1,812,457 3,817,159

Bank Facilities & Short Term Debt 1,696,788 608,819Trade and Other Payables 542,468 973,567Put Option Liabilities 299,799 648Other Current Liabilities 893,970 1,086,679Total Current Liabilities 3,433,025 2,669,713

Total Liabilities 5,245,482 6,486,872

Total Liabilities & Shareholder's Equity 6,917,353 8,674,854Net Debt1 2,957,507 3,432,857

1. Net Debt is calculated as a sum of Short Term Debt, Long Term Debt, less Cash.


Cash Flow Statement

Table 12: Cash Flow Statement in US$

Cash Flows from Operating ActivitiesNet Profit for the Period before Tax 927,415 969,944Adjustment to Reconcile Net Profit to Cash Flows from Operating ActivitiesDepreciation, Amortization & Impairment of Assets 436,608 593,444Unrealized Exchange Difference (56,948) 40,409Financial Charges 138,906 332,043Gain from Sale of Investments (70,467) (4,859)Others 39,883 79,273

Net Profit before Changes in Current Assets and Current Liabilities 1,415,397 2,010,254

Changes in Current Assets (323,254) 12,816Changes in Current Liabilities 354,316 171,469

Cash Generated from Operations 1,446,459 2,194,539

Income Tax Paid (58,590) (134,545)Interest Paid (122,983) (320,209)Net Cash Provided by Operating Activities 1,264,886 1,739,785

Cash Flows from Investing ActivitiesPayments for Property & Equipment and Property under Construction (1,399,264) (1,291,117)Proceeds from Sale of Property & Equipment 6,486 2,285Payments for Licenses & Software (78,601) (58,637)Interest & Dividend Received 10,342 19,970Payments for Investments Available for Sale (591,899) (1,697,353)Proceeds from Sale of Investments 105,438 14,234

Net Cash Used in Investing Activities (1,947,498) (3,010,618)

Cash Flows from Financing ActivitiesProceeds from Borrowings 792,740 3,474,300Change in Other Assets 36,872 14,723Payments for Treasury Stock (18,099) (110,510)Repayments of Borrowings (158,617) (1,419,353)Changes in Minority Interests (62,135) (82,286)Dividends Paid (141,130) (141,372)Payments for Capital Lease Obligations (315) (1,990)

Net Cash Provided by Financing Activities 449,316 1,733,512

Net Cash Movement (233,296) 462,679Cash & Cash Equivalents as at January 1st 512,521 286,891Change Cumulative Translation Adjustments 7,666 6,628Cash & Cash Equivalents as at December 31st 286,891 756,198

IFRS/US$

31 December 2005

US$ (000)

IFRS/US$

31 December 2006

US$ (000)

Table 13: Income Statement in EAS/Egyptian Pounds

Revenues 18,730,653 25,326,609 35% 6,658,827 6,805,038 2%Total Cost (6,453,635) (8,642,851) (2,253,188) (2,447,532)Gross Profit 12,277,018 16,683,758 4,405,639 4,357,506Total Expenses (4,144,407) (5,266,821) (1,388,718) (1,312,486)Provisions (338,919) (333,550) (80,628) (90,965)Negative Goodwill 52,343 — — —Others 137,576 234,634 46,758 69,356EBITDA 7,983,611 11,318,021 42% 2,983,051 3,023,411 1%

Depreciation & Amortization (2,456,840) (3,381,245) (884,241) (962,200)Earnings Before Interest & Tax 5,526,771 7,936,776 44% 2,098,810 2,061,211 (2%)

Net Financing Cost (471,489) (2,211,114) (405,372) (581,307)Other Revenues 19,161 36,833 6,372 8,865Share of Gain of Associates — (107,615) — (107,902)Gain from Sale of Subsidiaries 409,164 29,904 24,890 —Gain from Deconsolidation 641 — — —Capital loss (4,080) (21,889) (18,623) (5,152)

Earnings Before Taxes 5,480,168 5,662,895 3% 1,706,077 1,375,715 (19%)

Income Tax (829,547) (1,057,260) (311,699) (286,083)

Net Income before Minority Interest 4,650,621 4,605,635 (1%) 1,394,378 1,089,632 (22%)

Minority Share (705,828) (407,975) (119,710) (94,793)

Net Income 3,944,793 4,197,660 6% 1,274,668 994,839 (22%)Earnings Per Share (in LE) 18.05 19.31 7% 5.86 4.58 (22%)

31 December

2005

LE (000)

31 December

2006

LE (000)

Inc/

(dec)

Q3 – 2006

(3 months)

LE (000)

Q4 – 2006

(3 months)

LE (000)

Inc/

(dec)


EAS/LE

31 December 2005

LE (000)

EAS/LE

31 December 2006

LE (000)

Table 14: Balance Sheet in EAS/Egyptian Pounds

AssetsCash 1,651,055 4,335,282Trade Receivable (net) 2,078,705 1,228,791Other Current Assets 2,277,065 3,569,711Total Current Assets 6,006,825 9,133,784

Net Fixed Assets 13,567,387 19,013,282Assets Under Construction 3,203,799 4,121,410Goodwill (Net) 2,656,121 3,924,460Other Long Term Assets 14,143,200 13,310,177

Total Long Term Assets 33,570,507 40,369,329

Total Assets 39,577,332 49,503,113

LiabilitiesBank over Draft & Short Term Debt 9,765,012 3,490,358Put Option Liabilities 1,725,341 3,715Trade Payable 3,127,075 5,558,609Other Current Liabilities 5,176,819 6,243,775Total Current Liabilities 19,794,247 15,296,457

Long Term Debt 8,906,761 20,525,687Other Long Term Liabilities 1,512,930 1,358,279Total Long Term Liabilities 10,419,691 21,883,966

Total Liabilities 30,213,938 37,180,423

Total Shareholder's Equity 8,658,104 11,609,949Minority Share 705,290 712,741

Total Liabilities & Shareholder's Equity 39,577,332 49,503,113Net Debt1 17,020,718 19,680,763

1. Net Debt is calculated as a sum of Short Term Debt, Long Term Debt, less Cash.

Ownership December 31 Consolidation Method December 31Subsidiaries 2005 2006 2005 2006

GSM OperationsMobinil (Egypt)1 28.75% 28.75% Proportionate Consolidation Proportionate ConsolidationEgyptian Co. for Mobile Services 16.60% 18.37% Proportionate Consolidation Proportionate ConsolidationIWCPL (Pakistan)2 100.00% 100.00% Full Consolidation Full ConsolidationOrascom Telecom Algeria3 87.68% 96.81% Full Consolidation Full ConsolidationTelecel (Africa) 100.00% 100.00% Full Consolidation Full ConsolidationOrascom Telecom Tunisia4 50.00% 50.00% Proportionate Consolidation Proportionate ConsolidationLibertis (Congo Brazzaville) 65.00% — Full Consolidation —OIH (Iraq)5 100.00% 100.00% Full Consolidation Full ConsolidationOT Ventures6 100.00% 100.00% Full Consolidation Full Consolidation

Internet Service

Intouch 73.47% 93.50% Full Consolidation Full Consolidation

Non GSM OperationsRing 99.00% 99.00% Full Consolidation Full ConsolidationOrasinvest7 97.50% 100.00% Full Consolidation Full ConsolidationPharaoh 55.00% — Full Consolidation DeconsolidatedCortex 95.00% 100.00% Full Consolidation Full ConsolidationComtel 94.00% — Full Consolidation DeconsolidatedOT ESOP 100.00% 100.00% Full Consolidation Full ConsolidationArpu+8 87.00% 96.81% Full Consolidation Full ConsolidationM-Link 100.00% 100.00% Full Consolidation Full ConsolidationOT Services Europe 100.00% 100.00% Full Consolidation Full ConsolidationOnward Technologies 55.00% — Full Consolidation DeconsolidatedMedCable 100.00% 100.00% Full Consolidation Full ConsolidationOratel 96.10% 100.00% Full Consolidation Full ConsolidationC.A.T.9 50.00% 50.00% Proportionate Consolidation Proportionate ConsolidationOT Wireless Europe 100.00% 100.00% — Full ConsolidationOT WIMAX10 — 70.00% — Full ConsolidationTWA — 51.00% — Full ConsolidationOT Asia — 100.00% — Full ConsolidationEurasia — 100.00% — Full ConsolidationIntelligent Village 10.25% 10.19% Fair Value Fair Value

Table 15: Ownership Structure & Consolidation Methods

1. Mobinil is a holding company which controls 51% of ECMS, the mobile operator. Mobinil is also the brand name used by ECMS.

2. IWCPL owns 88.69% of Mobilink.

3. Direct and Indirect stake through Moga Holding Ltd. and Oratel.

4. Orascom Telecom Tunisia is proportionately consolidated through Orascom Tunisia Holding and Carthage Consortium.

5. OIH owns 100% of Orascom Telecom Iraq.

6. OT Ventures owns 100% of Sheba Telecom which operates under the trade name Banglalink.

7. Includes Egyptian Satellite Company, Contra Egypt, & Contra BVI.

8. Direct and Indirect stake through Intouch.

9. Direct and Indirect stake through International Telecommunications Consortium Limited (ITCL).

10. With an option to increase stake to 100%.


NotesOutlook for 2007

The markets OTH operates in, will continue their fast growth, due to theirrapid economic growth, low mobile penetration rate, limited fixed-line coverage,and the relatively high cost of fixed-line infrastructure deployment.

OTH expects to continue delivering very high double digit growth rate interms of subscriberbase and targets 70 million subscribers by year end 2007.ARPU should continue to decrease in Egypt, Iraq, and Pakistan as OTHpenetrates lower income segments and experiences very fast growth. ARPUdecline should be much more moderate in Algeria and Tunisia as theseoperations will focus on cleaning up dormant subscriber base and customervalue. ARPU should stabilize in Bangladesh as the operation focuses onincreasing the quality of its network to transform secondary SIM subscribersinto primary SIM subscribers.

Overall EBITDA margins are expected to be more or less stable. On one hand,scale and certain actions such as substitution of leased lines by owned backbonein Pakistan should enhance overall margin. On the other hand, the continuedhigh growth and competition in most of our markets and the difficult businessenvironment in Iraq will offset the above benefits.

Even though net additions is forecasted to be at the same level as 2006 andoverall traffic per subscriber is expected to increase, capital expenditures are

expected to come down as OTH continues to focus on negotiating betterprices with suppliers and increasing network efficiency.

OTH expects to continue its current strategy to:

1) Seek to capture the lion share of the high subscriber’s growth inits existing markets by capitalising on its leadership position ineach of its markets by investing in its network coverage and quality,as well as innovating product and marketing strategies tailored tothe local market conditions.

2) Seek to deliver shareholder value by centralised:— Network infrastructure procurement through frame agreements,— Financial discipline and reporting at our subsidiaries,— And group-wide strategic initiatives, best practices, tariffs policy and

management expertise.

3) Seek to i) consolidate its ownership by buying out minorities in its various subsidiaries, ii) selectively enter new markets with large population,low mobile penetration with adequate risk and return profile, and iii)opportunistically repurchase OTH Shares in light of favourable relativemarket valuations.

AppendixGlossary

ARPU (Average Revenue per User): Average monthly recurrent revenue percustomer (excluding visitors roaming revenue & connection fee). This includesairtime revenue (national & international), as well as, monthly subscriptionfee, SMS, GPRS & data revenue. Quarterly ARPU is calculated as an averageof the last three months.

Capex: Change in fixed assets, which includes work in progress, network, IT,and other tangible and intangible fixed assets during the reporting period.

Churn: Disconnection rate. This is calculated as the number of disconnectionsduring amonth divided by the average customer base for that month.

Churn Rule: A subscriber is considered churned (removed from the subscriberbase) if he exceeds the 90 days from the end of the grace period withoutrecharging. It is worth noting that the grace period is a function of the scratchcard being recharged by the subscriber.

MOU (Minutes of Usage): Average airtime minutes per customer per month.This includes billable national & international outgoing traffic originated bysubscribers (on-net, to land line & to other operators). Also, this includesincoming traffic to subscribers from land line or other operators.

OTH Market Share Calculation Method: The market share is calculated throughthe data warehouse of OTH’s subsidiaries. The number of SIM cards ofcompetitors that appeared in the call detail record of each of OTH’s subsidiariesis collected. This ref lects the number of subscribers of the competition.However, OTH deducts the number of SIM cards that did not appear in thecall detail records for the last 90 days to account for churn. The same is appliedto OTH subsidiaries.This method is used to calculate the market shares of Djezzy, Mobinil, andTunisiana only.

Disclaimer

The EAS/LE consolidated Financial Statements and the IFRS/US$ ConsolidatedFinancials are prepared using a different accounting and presentation basisand, therefore, the information and results are materially different from eachother and cannot be reasonably compared for analysis purposes.

This presentation contains statements that could be construed as forwardlooking. These statements appear in a number of places in this presentationand include statements regarding the intent, belief or current expectations ofthe subscriber base, estimates regarding future growth in the different businesslines 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 andinvolve risks and uncertainties, and actual results may differ materially fromthose in the forward looking statements as a result of various factors.

You are cautioned not to place undue reliance on those forward lookingstatements, which speak only as of the date of this presentation, which is notintended to ref lect Orascom Telecom’s business or acquisition strategy or theoccurrence of unanticipated events.


Auditor’s Report

To The Shareholders of Orascom Telecom Holding (S.A.E)

We have audited the accompanying Consolidated Balance Sheet of Orascom Telecom Holding "Egyptian Joint Stock Company" as of December 31, 2006 andthe related Consolidated Statements of Income, Changes in Shareholders’ Equity and Cash Flows for the year then ended. These consolidated financial statementsare the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with Egyptian Standards on Auditing and in the light of provisions of applicable Egyptian laws and regulations. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management as well as evaluating the overall financial statement presentation. We have obtained the informationand explanations, which we deemed necessary for our audit. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the Consolidated Financial Statements referred to above together with the notes attached thereto present fairly, in all material respect, the financialposition of the Company as of December 31, 2006 and the results of its operations and its cash flows for the financial year then ended, in accordance with EgyptianAccounting Standards and relevant Egyptian laws and regulations.

Cairo, March 27, 2007

KPMG Hazem Hassan

• Auditor’s Report• Consolidated Balance Sheet• Consolidated Income Statement• Consolidated Statement of Changes in Shareholders’ Equity• Consolidated Cash Flows• Significant Accounting Policies and Notes to the Consolidated Financial Statements

Financial StatementsEgyptian Accounting Standards (in LE)


Orascom Telecom Holding S.A.EConsolidated Income Statement For the financial year ended December 31, 2006

Note 2006 2005No. L.E L.E

Cellular operations revenue (3/19/ i) 22 292 760 122 16 115 566 876Telecommunications service revenue (3/19/ ii) 2 827 526 322 2 474 564 658Internet service and fixed lines revenue (3/19/ iii) 206 322 514 140 521 941Total revenues 25 326 608 958 18 730 653 475

Cellular operations cost (5 863 398 249) (4 265 333 869)Telecommunications service cost (2 707 145 172) (2 146 708 127)Internet service and fixed lines cost (72 308 016) (41 593 243)Total operating cost (8 642 851 437) (6 453 635 239)Gross profit 16 683 757 521 12 277 018 236

Other operating revenues 267 011 810 168 502 514Other operating cost (1 430 758 022) (1 170 443 294)Selling, general and administrative expenses (3 836 062 886) (2 973 963 211)Remunerations and allowances for board members (32 377 315) (30 927 584)Provisions (3/14) (110 784 942) (71 535 963)Impairment of assets (3/8) (222 764 772) (267 383 174)Negative Goodwill (3/6/a) — 52 343 230Earnings before interest, tax, depreciation and amortization 11 318 021 394 7 983 610 754Depreciation and amortization (3/5 - 3/6/d) (3 381 245 002) (2 456 840 020)Earnings before interest and income tax 7 936 776 392 5 526 770 734Other income (expenses)Net financing cost (24) (2 211 113 872) (471 489 279)Share of losses of associates (6/2) (97 323 741) —Other revenues 36 832 536 19 161 439Gain from sale of subsidiaries 29 903 919 409 163 750Gain from deconsolidation of subsidiaries (3/1/c) — 640 833Capital losses (21 889 038) (4 080 317)Earnings before income tax 5 673 186 196 5 480 167 160Income tax (3/12-22/d) (1 057 260 012) (829 546 513)Net profit before minority interest 4 615 926 184 4 650 620 647Minority interest (407 975 180) (705 827 250)Net profit for the year 4 207 951 004 3 944 793 397

Earnings per share (25) 19.20 17.92

The accompanying notes form an integral part of these financial statements.

Orascom Telecom Holding S.A.EConsolidated Balance Sheet As at December 31, 2006

Note 31/12/2006 31/12/2005No. L.E L.E

Non-current assetsProperty and equipment (net) (3/5-5) 19 013 281 712 13 567 387 344Property and equipment under construction (4) 4 121 410 546 3 203 798 970Investments (3/7/A,B-6) 7 394 945 459 7 532 152 218Payments for investments (7) 28 317 626 25 495 441Intangible assets (net) (3/6/B-8) 5 591 995 457 5 918 469 559Deferred tax assets (22/A) 187 346 083 13 301 516Goodwill (net) (3/6/A-10) 3 924 459 680 2 656 121 273Other assets (9) 110 663 170 653 781 047Total non-current assets 40 372 419 733 33 570 507 368

Current assetsInventories (net) (3/11) 779 030 131 502 418 350Trade receivable (net) (3/10) 1 228 791 219 2 078 705 471Due from related parties 325 866 311 115 902 737Prepaid expenses 381 257 343 349 797 273Other debit balances (3/10-11) 1 554 637 546 1 208 878 971Investments (3/7/C-12) — 49 825 411Other assets (9) 528 919 431 50 241 883Cash and cash equivalents (3/9-13) 4 335 281 577 1 651 054 873Total current assets 9 133 783 558 6 006 824 919

Current liabilitiesBorrowings (3/20,21-14) 3 490 357 621 3 019 976 392Put option liabilities (3/4-23) 3 714 984 1 725 340 983Trade payable 5 558 609 435 3 127 075 144Debt due on purchase of investments (15) 336 261 812 7 150 742 764Due to related parties 112 055 493 92 140 322Accrued expenses 2 526 086 748 2 058 991 045Other credit balances (16) 3 269 370 929 2 619 980 184Total current liabilities 15 296 457 022 19 794 246 834Excess of current liabilities over current assets (6 162 673 464) (13 787 421 915)Net investments 34 209 746 269 19 783 085 453Financed as follows:

Shareholders' equityIssued and paid in share capital (18) 1 100 000 000 1 100 000 000Legal reserve (3/18) 510 646 774 463 577 726Other reserves (19) 261 188 189 174 414 397Retained earnings 5 833 018 260 2 825 010 674Net profit for the year 4 207 951 004 3 944 793 397Cumulative translation adjustments (3/3) 453 955 500 312 073 878Treasury shares (3/17-20) (753 719 708) (161 765 885)Total shareholders' equity 11 613 040 019 8 658 104 187

Minority interest 712 740 965 705 289 899

Non-current liabilitiesBorrowings (3/20,21-14) 20 525 686 743 8 906 761 561Creditors (17) 272 229 182 684 087 170Deferred tax liabilities (22/A) 1 086 049 360 828 842 636Total non-current liabilities 21 883 965 285 10 419 691 367Total shareholders' equity, minority interest and liabilities 34 209 746 269 19 783 085 453


Executive Officer Finance Chairman and Managing Director

Auditor's report "attached"


Orascom Telecom Holding S.A.EConsolidated Statement of Changes in Shareholders' Equity For the financial year ended December 31, 2006

Note No. Issued

and paid Legal Other Retained Net profit for Cumulative Treasury Total

in share reserve reserve earnings the year translation shares

capital adjustments

L.E L.E L.E L.E L.E L.E L.E L.E

Balance as at 1/1/2005 1 100 000 000 428 353 043 16 689 239 1 733 411 169 1 961 219 838 1 002 292 410 (95 476 477) 6 146 489 222

Transfer to retained earnings — — — 1 961 219 838 (1 961 219 838) — — —

Transfer to legal reserve — 35 224 683 — (35 224 683) — — — —

Cumulative translation adjustments (3/3) — — — — — (690 218 532) 38 799 161 (651 419 371)

Cash f low hedges gains taken to equity (net) (3/4) — — 400 882 — — — — 400 882

Holding company distribution — — — (819 466 662) — — — (819 466 662)

Employees' dividends — — — (77 290 797) — — — (77 290 797)

Sale / Purchase of treasury shares — — — — — — (105 088 569) (105 088 569)

Employees share option plan (36/1/B) — — 157 324 276 — — — — 157 324 276

Adjustments on retained earnings — — — 62 361 809 — — — 62 361 809

Net profit for the year ended 31/12/2005 — — — — 3 900 011 434 — — 3 900 011 434

Adjustments on net profit of 2005 (36/1/A) — — — — 44 781 963 — — 44 781 963

Balance as at 31/12/2005 1 100 000 000 463 577 726 174 414 397 2 825 010 674 3 944 793 397 312 073 878 (161 765 885) 8 658 104 187

Transfer to retained earnings — — — 3 944 793 397 (3 944 793 397) — — —

Transfer to legal reserve — 47 069 048 — (47 069 048) — — — —

Cumulative translation adjustments (3/3) — — — — — 141 881 622 — 141 881 622

Cash f low hedges gains transfer to income statement — — (400 882) — — — — (400 882)

Cash f low hedges loss taken to equity (net) (3/4) — — (4 271 048) — — — — (4 271 048)

Employees share option plan — — 100 253 232 — — — — 100 253 232

Foreign exchange recognized directly in equity — — 22 219 730 — — — — 22 219 730

Investments available for sale valuation — — 10 142 488 — — — — 10 142 488

Company's share of items recognized directly in associate's equity — — (41 169 728) — — — — (41 169 728)

Employees dividends — — — (76 153 637) — — — (76 153 637)

Dividends to equity holders — — — (813 563 126) — — — (813 563 126)

Sale/Purchase of treasury shares — — — — — — (591 953 823) (591 953 823)

Net profit for the year ended 31/12/2006 — — — — 4 207 951 004 — — 4 207 951 004

Balance as at 31/12/2006 1 100 000 000 510 646 774 261 188 189 5 833 018 260 4 207 951 004 453 955 500 (753 719 708) 11 613 040 019


Orascom Telecom Holding S.A.EConsolidated Cash Flows Statement For the financial year ended December 31, 2006

Note 2006 2005No. L.E. L.E.

Cash flows from operating activitiesNet profit for the year before income tax and minority interest 5 673 186 196 5 480 167 160Adjustments to reconcile net profit to cash f lows from operating activitiesDepreciation and amortization 3 381 245 002 2 456 840 020Negative goodwill — (52 343 230)Amortization of arrangement fees (24) 181 861 850 57 226 717Payments for employees dividends (65 865 968) (49 907 665)Share of losses of associates (6/2) 97 323 741 —Dividends from investments (2 641 747) —Provisions 110 784 942 71 535 963Impairment of assets 222 764 772 267 383 174Unrealized exchange difference 232 542 520 (330 664 922)Financing expenses (24) 1 908 609 152 805 568 762Financing income (24) (140 385 004) (63 729 844)Gain from sale of subsidiaries (29 903 919) (409 163 750)Gain from deconsolidation of subsidiaries — (640 833)Capital losses 21 889 038 4 080 317

11 591 410 575 8 236 351 869Changes in working capitalChanges in current assets 74 124 846 (1 760 664 602)Changes in current liabilities 956 076 899 1 933 651 393Cash generated from operation 12 621 612 320 8 409 338 660Income tax paid (774 271 924) (340 199 465)Financing expenses paid (1 842 725 652) (714 099 888)Net cash provided by operating activities 10 004 614 744 7 355 039 307

Cash flows from investing activitiesPayments for property, equipment under construction (7 422 472 055) (8 106 173 138)Proceeds from sale of property and equipment 13 152 064 37 370 807Proceeds from sale of investments 81 916 207 612 221 871Financing income received 112 281 955 60 050 385Proceeds from dividends of investments 2 641 751 —Payments for Intangible assets (337 442 290) (456 902 551)Payments for investments (9 767 861 039) (3 436 840 619)Net cash used in investing activities (17 317 783 407) (11 290 273 245)

Cash flows from financing activitiesProceeds from borrowings 19 993 760 475 4 679 078 354Repayment of borrowings (8 179 449 483) (921 001 178)Dividends paid to equity holders (813 563 124) (819 466 662)Changes in minority interest (473 742 431) (394 833 303)Changes in other assets 84 731 257 148 708 297Payments for treasury shares (635 958 760) (105 088 569)Net cash provided by financing activities 9 975 777 934 2 587 396 939Net cash movement 2 662 609 271 (1 347 836 999)Cash and cash equivalents as at January 1st 1 651 054 873 3 154 625 208Change in cumulative translation adjustments 21 617 433 (155 733 336)Cash and cash equivalents as at December 31st (3/9-13) 4 335 281 577 1 651 054 873



1- GENERALA- Legal status

Orascom Telecom Holding S.A.E. “the Company” is an EgyptianJoint Stock Company established in accordance with the provisionsof the Companies Law No. 159 of 1981 and its executive regulationsand in accordance with the Capital Market Law No. 95 of 1992 and its executive regulations. The Company was registered in thecommercial register on July 29, 1997 under No. 114812.The Company extraordinary general assembly, in its meeting heldon February 9, 2000, approved the change of the governing law from the Companies’ Law No. 159 of 1981 to the Capital MarketLaw No. 95 of 1992. Also, by virtue of a resolution of the extraordinary general assembly, in its meeting held on June 13, 2000,the Company’s name was changed from Orascom Telecom to Orascom Telecom Holding. The Capital Market Authority’s approvalfor these changes had been obtained on July 12, 2000. These changes were registered in the commercial register under no. 134934.By virtue of a resolution of the extraordinary general assembly inits meeting held on September 1, 2004, the Company’s Premises was changed to Nile City Towers, Cairo, and was registered in thecommercial register under No. 365751.

B- Ultimate holding companyOn May 29, 2005, (50% +2) shares of Orascom Telecom Holdingcapital shares were acquired by Weather Capital S.a.r.L registeredon Luxembourg which is fully owned (100%) by Weather InvestmentCompany S.R.L registered in Italy.

During 2006 the (50% + 2) shares restructure was to be 26.24% owned by Weather Capital S.a.r.L & 23.76% acquired by WeatherCapital finance S.A (Luxemburg) which is fully owned company by Weather Capital S.a.r.L.

C- Purpose of the companyThe Company’s purpose is to participate in companies issuing securities or to increase its share capital of these companies. TheCompany may have interest or participate in, by any mean, in companies and other enterprises that have activities similar to those of the Company or those that may assist the Company toachieve its objective in Egypt or abroad. It may also merge into those companies and enterprises purchase them or affiliate them,pursuant to the provisions of the law and its executive regulations.

D- Financial statements authorizationThese statements were authorized by the directors for issue on March 26, 2007.

2- BASIS OF PREPARATIONThese Consolidated financial statements have been prepared in accordancewith the Egyptian Accounting Standards and relevant Egyptian laws and regulations. The financial statements are prepared using the historicalcost convention.

3- SIGNIFICANT ACCOUNTING POLICIES APPLIEDThe accounting policies set out below have been applied consistently with those applied in the previous year presented in these consolidatedfinancial statements and applied consistently by Group entities.3-1 Basis of consolidation

The consolidated financial statements include all subsidiaries thatare controlled by the parent company and which the managementintends to continue to control (Note 3-1-A). The bases of the consolidation are as follows:— All material inter-group balances and transactions are eliminated.— Minority interest, separated from the equity and results of the

entities that are controlled by the parent company, it’s shownas a separate line item in the consolidated financial statementsand calculated as the minority’s proportion of the pre-acquisition carrying amounts of the assets and liabilities of the subsidiary and the results of the year.

The cost of acquisition is allocated as follows:a- The fair value of the assets and liabilities acquired as of the date

of the acquisition to the extent of the parent’s interest obtained in the acquisition.

b- The excess of the cost of acquisition over the parent’s interest inthe fair value of the identifiable assets and liabilities acquired as of the date of acquisition is recognized as goodwill.— Positive goodwill is stated at cost as an intangible asset and

evaluated every financial period.— Negative goodwill is recognized directly in the income statement.

c- Deconsolidation:A subsidiary excluded from the consolidated financial statements when:— Parent control is intended to be temporary because the

subsidiary is acquired and held exclusively with a view to itssubsequent disposal in the near future.

— The subsidiary operated under severe long-term restrictions, which significantly impair its ability to transfer funds to the parent.Such deconsolidated subsidiaries accounted for in accordancewith EAS No. 17 concerning investments.

Orascom Telecom Holding S.A.ENotes to the consolidated financial statements for the financial year ended December 31, 2006

— Subsidiaries and Joint Ventures CompaniesAs at December 31, 2006 Orascom Telecom Holding, hereafter called the “Parent“ owns subsidiary companies that have been consolidated in the consolidated financial statements as follows:

A) Fully consolidated subsidiaries: % of share Country

InTouch for Telecommunication Company 93.5% EgyptOrascom Telecom C.S Company 100% MaltaTelecel International Ltd. Company 100% MaltaInternational Wireless Communication Pakistan Ltd. (IWCPL) 100% MaltaOrasinvest Holding Inc. Company 100% MaltaRing Distribution Company 99% EgyptOrascom Telecom Algeria Company 96.81% AlgeriaOrascom Telecom ESOP Company 100% MaltaArpu for Communication services Company 96.82% EgyptMoga Holding Limited Company 100% MaltaOrascom Iraq Holding Company 100% MaltaOrascom Telecom Services Europe Company 100% FranceM-Link Company 100% MaltaOrascom Telecom Ventures Company 100% MaltaMed Cable Company 100% United KingdomOratel International Ltd. Company 100% MaltaOrascom Telecom Wireless Europe 100% FranceOrascom Telecom Eurasia 100% MaltaWimax Company 100% United KingdomTrance World Associates 51% PakistanOrascom Telecom Asia Limited 100% Malta

* Includes direct and indirect ownership stake. ** Wimax Company consolidated by 100 % which a result of considering Put option and commitment to sell non financial item agreements (note no.23-2).

B) Joint Ventures Companies – proportionally consolidatedThe consolidated financial statements also include the Parent’s prorate interest in the assets, liabilities, revenues and expenses of joint ventures throughproportionate consolidation of these items in the Parent’s financial statements.Indicated hereunder are the joint ventures, the Parent’s prorate interest and the period for which the financial statements have been prepared as a basisfor proportionate consolidation in the Parent’s consolidated financial statements.

Prorate Interest as atName of the Joint Venture December 31, 2006 Country

* Egyptian Company for Mobile Services 33.03% Egypt** Orascom Telecom Tunisia 50% Tunis*** Consortium Algerian Telecommunications 50% Algeria

*Proportionally consolidated for Egyptian Company for Mobile Services through direct share in:

Ownership % as atName of the Company December 31, 2006 Country

Mobinil for Telecommunications 28.75% EgyptEgyptian Company for Mobile Services 17.87% EgyptTelecel International Ltd 0.5% Malta

**Proportionally consolidated for Orascom Telecom Tunisie through direct share in:


Orascom Tunisia Holding Co. 100% MaltaCarthage Consortium Ltd. Co. 100% Malta

***Proportionally consolidated for Consortium Algerian Telecommunications through direct share in:


Consortium Algerian Telecommunications 33% AlgeriaInternational Telecommunication Consortium Ltd 50% United Kingdom

*

*

*

**


3-2 Translation of the foreign currencies transactionsOrascom Telecom Holding and some of its subsidiaries maintaintheir books of accounts in Egyptian Pound. Transactions denominatedin foreign currencies are recorded at the prevailing exchange rateat the date of transactions. Monetary assets and liabilities denominatedin foreign currencies at the balance sheet date are translated at theprevailing exchange rates at that date. The foreign exchangedifferences arising on the settlement of transactions and thetranslation at the balance sheet date are recognized in the income statement.

3-3 Translation of the foreign subsidiaries’ financialsAs at the balance sheet date the assets and liabilities of theseconsolidated subsidiaries are translated to Egyptian Pound at theprevailing rate as at the year end, and the shareholders’ equityaccounts are translated at historical rates, where as the incomestatement items are translated at the average exchange rate prevailingduring the year of the consolidated financial statements. Currencytranslation differences are recorded in the shareholders’ equitysection of the balance sheet as cumulative translation adjustments.

3-4 Derivative financial instrumentsThe Group uses derivative financial instruments to hedge itsexposure to foreign exchange and interest rate risks arising fromoperational, financial and investment activities. In accordance withits treasury policy, the Group does not hold or issue derivativefinancial instruments for trading purposes. However, derivativesthat do not qualify for hedge accounting are accounted for astrading instruments.

3-5 Property and equipmentProperty and equipment are recorded at historical cost and presentedin the balance sheet net of accumulated depreciation and impairment(Note 3-8). Depreciation is charged to income statement over theestimated useful-life of each asset using the straight-line method.The following are the estimated useful lives, for each class of assets,for depreciation calculation purposes:

Assets Depreciation periodBuildings 50 yearsCell sites 8 yearsTools 5-10 yearsComputers equipment 3-5 yearsFurniture and Fixtures 5-10 yearsVehicles 3-6 yearsLeasehold improvements and renovations 3-8 years

Expenditure incurred to replace a component of an item of propertyand equipment that is accounted for separately, including majorinspection and overhaul expenditure, is capitalized. Other subsequentexpenditure is capitalized only when it increases the future economicbenefits embodied in the property and equipment. All otherexpenditure is recognized in the income statement as an expenseas incurred.

3-6 Intangible assetsA- Goodwill

Goodwill (positive and negative) represents amounts arisingon acquisition of subsidiaries, associates and joint ventures.Goodwill (positive and negative) represents the differencebetween the cost of the acquisition and the fair value of thenet identifiable assets acquired at acquisition date.

— Positive goodwill is stated at cost less impairment losses (note 3-8).— While negative goodwill arose from business combinations

after applying International Financial Reporting Standards (IFRS3) will be recognized directly in the income statement.

— Goodwill resulting from further acquisitions after control is obtained is determined on the basis of the cost of the additionalinvestment and the carrying amount of net assets at the dateof acquisition, accordingly, no fair value adjustments would be recognized.

B- Other intangible assetsOther intangible assets that are acquired by the Group arestated at cost less accumulated amortization and impairmentlosses (note 3-8).

C- Subsequent expenditureSubsequent expenditure on capitalized intangible assets iscapitalized only when it increases the future economic benefitsembodied in the specific asset to which it relates. All otherexpenditure is expensed as incurred.

D- AmortizationAmortization is recognized in the income statement on a straight-line basis over the estimated useful lives of intangible assets.License fees are amortized over the period of the licenses,concessions and computers software are amortized from thedate they are available for use. The estimated useful lives areas follows:

Assets Amortization period— Licenses Fees Over the remaining

period of the licenses— Concessions and Computers software 3-15 years

3-7 Investmentsa- Investments in associates

Investments in associates are stated at equity method. Underthe equity method the investment in associates is initiallyrecognize at cost and the carrying amount is increased ordecreased to recognize the investor’s share of the profit orloss of the associates after the date of acquisition. Distributionsreceived from associates reduce the carrying amount of the investment.Losses of an associate in excess of the Company’s interest inthat associate (which includes any long-term interests that, insubstance, form part of the Company’s net investment in theassociate) are not recognized, unless the Company has incurredlegal or constructive obligations or made payments on behalfof the associate.Any excess of the cost of the acquisition over the Company’sshare of the net faire value of the identifiable assets, liabilitiesand contingent liabilities of the associate recognized at thedate of acquisition is recognized as goodwill. The goodwill isincluded within the carrying amount of the investment andis assessed for impairment as part of the investment.

b- Investments available for saleInvestments available-for-sale are valued at fair value, with anyresultant gain or loss being recognized in equity, except forimpairment losses which is recognized in the income statement.When these investments are derecognized, the cumulative gainor loss previously recognized directly in equity is recognizedin the income statement. The fair value of investments availablefor sale, is the quoted are valued using valuation techniquesbid price at the balance sheet date, investments that are notquoted, and whose fair value can not be measured reliably,are stated at cost less impairment loss.

c- Investments held for tradingInvestments held for trading are stated at cost. And at the endof each financial period investments held for trading aremeasured at the fair value. Changes in the fair value differencesare recognized in the income statement. Investments held fortrading include of mutual funds and reverse repurchaseagreements (treasury bills).

3-8 ImpairmentThe carrying amounts of the Group’s assets other than inventoriesand deferred tax assets are reviewed at each balance sheet date todetermine whether there is any indication of impairment. If anysuch indication exists, the asset’s recoverable amount is estimated.For intangible assets that are not yet available for use, the recoverable

amount is estimated at each balance sheet date. An impairmentloss is recognized whenever the carrying amount of an asset or itscash-generating unit exceeds its recoverable amount. Impairmentlosses are recognized in the income statement.The recoverable amount of the Group’s receivables is calculatedas the present value of expected future cash f lows, discounted atthe original effective interest rate inherent in the asset. Receivableswith a short duration are not discounted.The recoverable amount of other assets is the greater of their netselling price and value in use. In assessing value in use, the estimatedfuture cash flows are discounted to their present value using a pre-tax discount rate that ref lects current market assessments of thetime value of money and the risks specific to the asset. For anasset that does not generate largely independent cash inflows, therecoverable amount is determined of the cash – generating unitto which the asset belongs.An impairment loss in respect of goodwill is not reversed unlessthe loss was caused by a specific external event of an exceptionalnature that is not expected to recur, and the increase in recoverableamount related clearly to the reversal of the effect of that specific event.In respect of other assets, an impairment loss is reversed if therehas been a change in the estimates used to determine the recoverable amount.An impairment loss is reversed only to the extent that the asset’scarrying amount does not exceed the carrying amount that wouldhave been determined, net of depreciation or amortization, if noimpairment loss had been recognized.

3-9 Cash and cash equivalentsFor the purpose of preparing the Statement of Cash Flows, theCompany considers all cash on hands and bank on demand depositswith banks as cash and cash equivalents. The Statement of CashFlows is prepared according to the indirect method.

3-10Trade and other receivablesTrade and other receivables are stated at their cost less impairmentlosses (note 3-8).

3-11InventoriesInventories are stated at the lower of cost and net realizable value.Cost is determined using the weighted average method and netrealizable value is the estimated selling price in the ordinary courseof business, less the estimated costs of completion and otheraddition expenses.

3-12TaxationIncome tax on the profit or loss for the year comprises currentand deferred tax. Income tax is recognized in the income statementexcept to the extent that it relates to items recognized directly inequity, in which case it is recognized in equity.Current tax is the expected tax payable on the taxable income forthe year, using tax rates enacted or substantially enacted at thebalance sheet date, and any adjustment to tax payable in respectof previous years.Deferred tax is provided using the balance sheet liability method,providing for temporary differences between the carrying amountsof assets and liabilities for financial reporting purposes and theamounts used for taxation purposes. The amount of deferred taxprovided is based on the expected manner of realization orsettlement of the carrying amount of assets and liabilities, usingtax rates enacted or substantively enacted at the balance sheet date.A deferred tax asset is recognized only to the extent that it isprobable that future taxable profits will be available against whichthe asset can be utilized. Deferred tax assets are reduced to theextent that it is no longer probable that the related tax benefitwill be realized.

3-13Capitalization of borrowing costsBorrowing costs are recognized as expenses in the income statementwhen incurred, with the exception of borrowing cost directlyattributable to the construction and acquisition of new assetswhich is capitalized as part of the relevant assets cost and depreciated

over assets’ estimated useful lives. This capitalization ceases oncethe assets become in operational condition and ready for use.

3-14ProvisionsProvisions are recognized when the Company has a legal orconstructive obligation as a result of a past event and it’s probablethat a f low of economic benefits will be required to settle theobligation and the obligation can be reasonably estimated. Provisionsare reviewed at the balance sheet date and amended (when necessary)to represent the best current estimate.

3-15Accounting estimatesThe preparation of the financial statements in conformity withEgyptian Accounting Standards requires management to makeestimates and assumption that affect the reported amounts ofassets and liabilities and the reported amounts of revenues andexpenses during the reporting period. Actual results could differfrom those estimates.

3-16DividendsDividends are recognized as a liability in the financial period inwhich they are declared.

3-17Treasury SharesOrascom Telecom Holding shares which held by Orascom TelecomHolding and its subsidiaries are recorded as treasury shares in theconsolidated balance sheet at the acquisition cost less any writedown to market value .Transactions relating to the treasury sharesare recorded in the Shareholders’ Equity.

3-18Legal ReserveAs per the company’s statutes 5% of net profit for the year is setaside to form a legal reserve, the transfer to such reserve ceasesonce it reaches 50% of the Company’s paid in share capital. Thereserve can be utilized in covering losses or increasing the Company’sshare capital. If the reserve falls below the said 50%, the Companyshould resume setting aside 5% of its annual net profit until thereserve reaches 50% of the Company’s paid in share capital.

3-19Revenue recognition(i) Cellular operations revenue

GSM revenue is recognized when services rendered to the customers based on the actual usage airtime from the followingactivities:— Prepaid cards is recognized based on the actual used

calls minutes while the unused call minutes at the end of the period are deferred.

— Monthly and connection fees are recognized in the incomestatement on a straight-line basis over the period or the terms of the contract.

— Other GSM telecommunications services and facilities whenprovided.

(ii) Telecommunications services revenueRevenue from the provision of telecommunications servicesincludes the following:— Goods sold

Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer.

— Construction contractsRevenue is recognized in proportion to the stage of completion of the contract.

— Satellite servicesRevenue is recognized once the services delivered to the client.

— VAS revenueValue added services (VAS) revenue is recognized once theservices are delivered, or used by the customers.

— Space segment revenueSpace segment rental fees are recognized in the income statement on a straight-line basis over the terms of the lease.


6- LONG TERM INVESTMENTS

31/12/2006 31/12/2005% of % of

Ownership L.E. Ownership L.E.

6-1 Investments available for sale

Smart village (ECDMIV) 10.19% 24 025 800 10.25% 10 250 000Pioneers for Investments — 16 429 624Top level Domain 5% 5 948 903 —Orascom TelecomInternet Algeria 19 911 839 —Other investments(owned by subsidiaries) 17 349 315 10 987 881Total Investmentsavailable for sale 67 235 857 37 667 505

6-2 Investments in associates

* Hutchison TelecommunicationsInternational 19.26% 19.3%Share of the fair value ofnet assets (net of tax) 3 753 227 805 3 753 227 805Goodwill arising at dateof acquisition 3 741 256 908 3 741 256 908Amortization of intangibleassets (net of tax) (122 679 444) —Share of profits for the year 28 675 175 —

**Loss from change inownership percentage (3 319 472) —Company share of itemsrecognized directly in equity (41 169 728) —Cumulative translation adjustments (28 281 636) —Total Investments in associates 7 327 709 602 7 494 484 713Total Investments 7 394 945 459 7 532 152 218

* On December 2005, Orascom Telecom Holding established Orascom Telecom Eurasia Malta (special purpose vehicle lately redomiciled) to acquire19.3 % of Hutchison Telecommunications International Ltd. HTIL shareswhich are pledged as security for the US$ 2.5 billion syndication loan (note 14-1).Although the Company holds less than 20% of the equity shares of Hutchison Telecommunications International Ltd. HTIL, and it has less than 20% of the voting power in shareholder meetings, the Company exercises significant inf luence by virtue of its contractual right to appointtwo directors to the board of directors of that Company.

**During year 2006 the company has issued 13.4 million share as a result ofexercising a “Share Option Scheme” granted to its employee. Accordingly,Orascom Telecom Holding ownership percentage was decreased from 19.3%to 19.26%.

Summarized financial information in respect of the Company’s associate is set out below:

4- PROPERTY AND EQUIPMENT UNDER CONSTRUCTION

31/12/2006 31/12/2005L.E. L.E.

Orascom Telecom Holding Company — 29 572 136* Egyptian Company for Mobile Services 529 441 879 371 406 990

Orascom Telecom Algeria Company 1 556 009 399 1 167 729 126InTouch for Telecommunication Company 10 575 476 1 358 992Ring for Distribution Company 6 865 698 8 306 222

** International Wireless Communication Pakistan Ltd. (IWCPL) 1 562 964 992 1 369 094 613Orascom Iraq Holding Company 159 705 254 109 102 227Orascom Telecom Tunisia Company 92 683 870 73 492 091

*** Orascom Telecom Ventures Company 185 645 954 44 653 823Consortium Algerian Telecommunications 9 995 495 29 033 730Med Cable Company 5 512 103 —Other companies 2 010 426 49 020

4 121 410 546 3 203 798 970

* The Egyptian Company for Mobile Services (Joint Ventures Company) capitalizes the borrowing costs related to establishment of an asset. Accordingly,the Orascom Telecom Holding proportionate share from the capitalization during the financial year ended December 31, 2006 is L.E 28.74 million.

** International Wireless Communication (Subsidiary Company) Pakistan Ltd capitalized the borrowing costs related to establishment of an asset duringthe financial year ended December 31, 2006 amounted to PKR 150.33 million equivalents to L.E 14.36 million.

*** Orascom Telecom Ventures (Subsidiary Company) capitalized the borrowing costs related to establishment of an asset during the financial year endedDecember 31, 2006 amounted to TAKA 40.84 million equivalents to L.E 3.35 million.

31/12/2006 31/12/2005In thousands L.E.

Total Assets 58 740 318 44 250 195Total Liabilities (42 223 545) (29 528 905)Net Assets 16 516 773 14 721 290The Company’s share ofassociate net assets 3 181 130 2 842 813

Total Revenues 24 687 920 18 249 699Total Expenses (24 539 036) (18 354 215)Net (Loss) for the year 148 884 (104 516)The Company’s share ofthe associate net gain 28 675 —

Faire value of the Investment 13 441 413 7 602 133

7- PAYMENTS FOR INVESTMENTS

31/12/2006 31/12/2005L.E. L.E.

Trans World Associates Co. — 19 546 538Top Level Domain Co. — 5 948 903InTouch for Telecommunication Co. 16 187 376 —Subsidiaries of OTH 12 130 250 —

28 317 626 25 495 441

8- INTANGIBLE ASSETSLicenses Concession Total

& softwareL.E. L.E. L.E.

CostAs at 1/1/2006 7 793 804 819 541 290 856 8 335 095 675Additions during the year 1 156 269 199 738 858 200 895 127Additions from changesin proportionate companies 42 422 411 — 42 422 411Disposals during the year — (1 408 159) (1 408 159)Cumulative translationadjustments 180 768 144 9 900 302 190 668 446Balance as at 31/12/2006 8 018 151 643 749 521 857 8 767 673 500

Accumulated AmortizationAs at 1/1/2006 (2 122 222 405) (294 403 711) (2 416 626 116)Amortization during the year (559 545 090) (127 480 406) (687 025 496)Additions from changesin proportionate companies (17 015 142) (1 724 348) (18 739 490)Accumulated Amortizationof disposals — 1 408 159 1 408 159Cumulative translationadjustments (49 892 226) (4 802 874) (54 695 100)Balance as at 31/12/2006 (2 748 674 863) (427 003 180) (3 175 678 043)Net Book value asat 31/12/2006 5 269 476 780 322 518 677 5 591 995 457Net Book value asat 31/12/2005 5 671 582 414 246 887 145 5 918 469 559

5- PROPERTY AND EQUIPMENT

Land Buildings Cell Sites Tools Computers Furniture & Vehicles Leasehold Total

Equipment Fixtures improvements

& renovation

L.E L.E L.E L.E L.E L.E L.E L.E L.E

Cost

As at 1/1/2006 21 948 974 228 145 041 16 548 771 587 40 197 650 529 154 766 155 102 495 89 610 508 175 780 430 17 788 711 451

Additions during the year 8 254 825 112 362 685 7 500 441 822 16 844 892 204 206 401 86 737 933 73 327 579 129 887 150 8 132 063 287

Addition coming from new incoming companie 555 899 76 672 1 633 987 — 1 567 030 1 973 161 898 738 — 6 705 487

Addition coming from changes in

proportionate companies 118 105 5 134 173 92 418 091 — 6 319 822 1 389 882 357 033 1 490 224 107 227 330

Disposals during the year — (178 497) (34 876 135) (8 201 410) (1 388 518) (2 694 211) (13 125 654) (1 329 972) (61 794 397)

Deconsolidation of subsidiaries (5 916 000) — (1 282 561) (648 564) (385 636) (494 140) (213 919) (233 384) (9 174 204)

Cumulative translation adjustments 95 488 3 816 362 16 182 466 2 899 588 1 304 720 (697 688) 709 968 1 228 002 25 538 906

Balance as at 31/12/2006 25 057 291 349 356 436 24 123 289 257 51 092 156 740 778 585 241 317 432 151 564 253 306 822 450 25 959 277 860

Accumulated Depreciation

As at 1/1/2006 — 12 751 831 3 720 153 217 16 265 147 277 832 635 69 704 095 41 508 235 83 108 947 4 221 324 107

Depreciation for the year — 8 886 229 2 444 541 414 8 024 056 127 640 902 34 247 143 21 693 082 49 186 680 2 694 219 506

Addition coming from new incoming companies — 3 834 1 221 270 — 947 082 558 306 228 338 — 2 958 830

Addition coming from changes

in proportionate companies — 103 506 50 624 604 — 5 016 348 860 374 214 870 1 436 691 58 256 393

Accumulated depreciation of disposals — (22 925) (8 238 005) (3 817 261) (890 301) (1 451 536) (9 350 066) (414 922) (24 185 016)

Deconsolidation of subsidiaries — (724 173) (81 384) (284 758) (310 166) (212 904) (169 244) (1 782 629)

Cumulative translation adjustments — 616 410 22 922 333 292 396 288 367 88 597 417 112 579 742 25 204 957

Balance as at 31/12/2006 — 22 338 885 6 230 500 660 20 682 954 410 550 275 103 696 813 54 498 667 133 727 894 6 975 996 148

Net book value as at 31/12/2006 25 057 291 327 017 551 17 892 788 597 30 409 202 330 228 310 137 620 619 97 065 586 173 094 556 19 013 281 712


(iii) Internet and fixed lines revenueRevenue is recognized once the service delivered to the client.

3-20BondsBonds are recognized initially at cost less issuance costs. Issuancecosts are recognized by amortized cost by using effective interestrate. Bonds are stated at amortized cost with any difference betweencost and redemption value being recognized in the income statementover including the financial cost the period of the borrowings.

3-21Interest-bearing borrowingsInterest-bearing borrowings are recognized initially at fair value less

attributable transaction costs. Subsequent to initial recognition,Interest-bearing borrowings are stated at amortized cost with anydifference between cost and redemption value being recognizedin the income statement over the period of the borrowings on aneffective interest basis.

3-22Segment ReportingA segment is a distinguishable component of the group that isengaged either in providing products or services (business segment)or in providing products or services within a particular economicenvironment (geographical segment), which is subjected to risksand rewards that are different from those of other segments. Thegroup’s primary format for segment reporting is based on business segment.

Capitalizes borrowing costs

— The Egyptian Company for Mobile Services (Joint Ventures Company) capitalizes borrowing costs related to the acquisition of an asset. Accordingly, Orascom Telecom Holding proportionated

share from the capitalization during the financial year ended December 31, 2006 is L.E 38.9 million in property and equipment.

— International Wireless Communication Pakistan (Subsidiary Company) capitalized borrowing costs related to the acquisition of an asset during the financial year ended December 31, 2006 amounted

to PKR 1 570 million equivalents to L.E 150 million.

— Orascom Telecom Ventures (Subsidiary Company) capitalized borrowing costs related to the acquisition of an asset during the financial year ended December 31, 2006 amounted to TAKA 101.1

million equivalents to L.E 8.3 million.

Pledged assets

— Orascom Telecom Tunisia net property and equipment are subjected to registered debentures to secure Orascom Telecom Tunisia loans, Orascom Telecom Holding proportionate rate in Orascom Telecom

Tunisia property and equipment amounted to TND 273 million equivalent to L.E 1 211 million.

— Some of the property and equipment costs which belongs to M-Link amounted to USD 1.1 million equivalent to L.E 6.1 are secured by first hypothecation charge.

— Some of the property and equipment costs which belongs to Med-Cable amounted to Sterling pound 8 million equivalent to L.E 91million are secured by first hypothecation charge.


14- Borrowings

Borrower Lending Interest Rate Short term Long term Outstanding Currency Debt Collateral GivenInstitution borrowings borrowings amounts

31/12/2006 31/12/2006 31/12/2006LE LE LE

* The facility is secured by:

Orascom Telecom Holding A.Group of Egyptian 929 480 532 13 037 838 624 13 967 319 156 * Pledge all the company shares in HTIL, OTI,Orascomand foreign banks Tunisia Holding, Carthage Consortium, Mobinil and 16.6%(Tranche A-1) Libor +2.75% US$ 1 687 453 498 of ECMS shares(Tranche A-2) Libor +2.75% US$ 452 380 953(Tranche B ) 2.5% + discount rate of Central bank of Egypt LE 700 000 000B. Fortis bank 6.3% € 20 310 064

Libor +2.75% US$ 238 095 238

Moga Holding Company Mezzanine Euribor + 1.5% — 132 462 398 132 462 398 € 17 500 000

Orascom Telecom Tunisia Group of banks 2.998%+ Euribor 122 442 283 1 096 500 890 1 218 943 173 € 100 000 000 * A pledge on Orascom Telecom Tunisia equipments amounts to TND 49 990 171

(Orascom Tunisia HoldingCarthage Consortium Ltd.) 2%+ TMM TND 104 740 000 * A pledge on Orascom Telecom Tunisia "fonds de

commerce" amounted to TND 448 108 000* Pledge of 1 650 496 Orascom Telecom Tunisia shares

owned by Orascom Tunisia Holding and Carthege Consortium.

The Egyptian Company for Mobile Services Group of banks (50% of the loan 11.5% ) 232 208 381 836 633 516 1 068 841 897 LE 848 070 000(Mobinil for Telecommunication Co.) + (The other 50% 1.4%over

the discount rate of Central Bank of Egypt)Bonds 12.25% LE 160 191 000Banque Misr 10.5% including highest over LE 58 893 750

drawn balance commissionBNP Paribas 10% + 0.05% including highest over LE 33 451 650

drawn balance commissionBarclays Bank 9.85% including highest over drawn LE 36 985 746

balance commission

Orascom Telecom Algeria COFACE Euribor +1.6% 657 241 950 1 487 953 739 2 145 195 689 € 189 676 322 * Pledge on Orascom Telecom Algeria business undertaking.HERMES Euribor +1.75% € 92 000 000 * Pledge on Orascom Telecom Algeria bank accounts.CDC Euribor +4.25% € 797 253 * Financial commitments to meet certain financial targets DEG Euribor + 2% € 8 969 100 related to debt to equity ratio, annual revenues, EBITDA

and debt service coverage.Proparco Euribor + 2% € 11 958 800 * Other commitments covering new investments, capital

2.35%+BOA Discounted rate DZD 3 987 500 000 structure changes, new borrowing and fixed assets disposals.COFACE Libor +0.6% $ 137 502 108 * 158 Promissory note to secure the principle amount of HERMES Libor +0.6% $ 85 870 893 the loans and the corresponding interests due up to

maturity date to the lenders.

International Wireless Communication Pakistan Ltd Group of banks T-Bill rate + 2.5% - 5.5% 1 210 505 080 4 119 913 716 5 330 418 796 PKR 1 075 000 000 * Secured by Motorola Inc. corporate guarantee.Kibor + 2.75% PKR 3 030 000 000 * Secured by the company's present and future assets.KIBOR +1.5% & SBP + 95 BPs PKR 1 200 000 000 * A pledge on the fixed assets of PMCL.KIBOR +1% - 3.5% PKR 1 500 000 000 * Negative pledge under taking in respect of the company's assetsKIBOR + 2.25% PKR 1 740 000 000 * Restrictions on financial indebtednessKIBOR + 2.625% PKR 1 000 000 000 * Limitations on the granting of loans and guaranteesKIBOR + 2.625% PKR 6 040 000 000 * Restrictions on the payment of dividendsKIBOR + 2.625% PKR 2 500 000 000 * Limitations on disposals of assetsKIBOR + 2.625% PKR 1 000 000 000 * Restrictions on mergers or reconstructionsLibor +0.4% US$ 47 995 212 * Limitation on permitted acquisition of assetsEuribor +2.5% € 10 000 000 * Restrictions on investmentsEuribor +0.78% € 46 078 411Euribor +0.8% € 96 001 033Kibor +1% US$ 42 500 000

Bonds T-Bill rate + 2.25% -min 6% PKR 2 500 000 000Bonds KIBOR +1.6% min of 4.95% PKR 2 000 000 000Bonds KIBOR +2.85% PKR 3 261 640 000

KIBOR +1.35% min of 3.5% p.a. PKR 800 000 000Kibor + 1.75% PKR 500 000 000Kibor + 2.5% PKR 600 000 000Kibor + 1.25% PKR 800 000 000Kibor + 6 bps. PKR 750 000 000Libor + 1.5% US$ 9 000 000Libor + 1.2% PKR 222 000 0008.625% US$ 250 000 000

Intouch company Cairo Barclays Bank 12% 20 501 922 9 864 748 30 366 670 LE 29 864 748 * Part of Intouch, Link Egypt and LinkDotNet Revenues* Guarantee from Orascom Telecom Holding

not to reduce it's share in Intouch capital than 51%

M-Link Company Fortis Bank 1 218 685 4 265 400 5 484 085 € 1 369 612 * A pledge of M- Link Teleport buildings.

Med Cable Calyon Bank Euribor +0.95% 22 117 976 74 900 575 97 018 551 € 12 156 638 * Guaranteed by Orascom Telecom HoldingEuribor +3.5% € 4 000 000

Sheba telecom Group of Suppliers & 12% 261 316 603 — 261 316 603 TAKA 2 010 000 000 * Promissory note + US$ 30 M letter of creditfinancial institution

USD 11 000 000 * Line of USD current account11% TAKA 980 000 000 * Promissory note

Trance World Associates Group of Suppliers & Kibor + 3 % 26 782 808 120 522 635 147 305 443 PKR 1 400 000 000 * Secured by the company's present and future assets.financial institution

Kibor + 3 % PKR 207 500 000 * Secured by the company's present and future assets.

Ring Distribution 3 622 780 64 553 3 687 333

Orasinvest Holding Group of Banks 12.5% min. 11.5% 2 918 621 — 2 918 621 LE 17 000 000 * Dividends distribution should not exceed 70% of Mobiserve (subsidiary) year's income

8% min. 7.5% DZD 90 000 000 * Total shareholders' funds retained in Mobiserve (subsidiary) must not be less than L.E. 10 million

Total borrowings 3 490 357 621 20 920 920 794 24 411 278 415Net issuance cost — (395 234 051) (395 234 051)Net borrowings 3 490 357 621 20 525 686 743 24 016 044 364

9- OTHER ASSETSOther assets (non-current)

31/12/2006 31/12/2005L.E. L.E.

* Blocked cash at banks 2 164 401 566 578 753Deposits with others 19 349 235 87 202 294Derivative financial instruments assets 89 149 534 —

110 663 170 653 781 047

Other assets (current)

* Blocked cash at banks 496 707 315 42 021 112Derivative financial instruments assets 32 212 116 8 220 721

528 919 431 50 241 833* Blocked as collateral for loans, letter of guarantees.

10- GOODWILLGoodwill represents the excess cost of acquisition of the investment over their fair value at the date of acquisition.

31/12/2006L.E

CostAt the beginning of the year 3 416 974 505Acquisitions through business combinations 5 011 313Acquisitions of minority interest 1 262 838 723Cumulative translation adjustments 119 064At the ending of the year 4 684 943 605

Accumulated Impairment lossesAt the beginning of the year 760 853 232Derecognized on disposals of subsidiary 20 262Cumulative translation adjustments (389 569)At the ending of the year 760 483 925Net Book value at the end of the year 3 924 459 680Net Book value at the beginning of the year 2 656 121 273

Goodwill as at December 31, 2006 is as follows:

Net as at Net as at31/12/2006 31/12/2005

Goodwill at the parent company’s level L.E L.E

Mobinil for Telecommunications 230 573 620 230 573 620Egyptian Company for Mobile Services 337 230 013 107 713 921Pakistan Mobile Ltd. 42 784 169 42 784 169Telecel International Ltd. 87 726 112 87 022 507InTouch for Telecommunication Services 46 422 528 12 401 800Orascom Telecom Algeria Co. 2 924 544 061 1 931 402 882Orascom Tunisia Holding 80 906 281 80 906 281Carthage Consortium Ltd. 94 370 341 94 370 341Pharaoh Telecommunication — 8 669Trance World Associates 5 011 313 —

Goodwill at the subsidiaries’ level

Mobinil for Telecommunication in the Egyptian Company forMobile Services 643 501 643 501InTouch for Telecommunicationin LinkDotNet 5 072 981 5 072 981Orascom Telecom Venturesin Sheba Telecom 61 204 642 61 439 511Orasinvest Holding in subsidiaries 1 783 242 1 781 090Arpu for Communication servicesCo. in Global telecom Co. 4 572 221 —International Wireless CommunicationPakistan Ltd. (IWCPL) 1 614 655 —

3 924 459 680 2 656 121 273

11- OTHER DEBIT BALANCES31/12/2006 31/12/2005

L.E L.E

Advance payments to suppliers 263 059 376 291 036 078Accrued revenues 620 662 063 426 961 874Deposits with others 29 142 467 30 620 023Taxes 447 890 194 361 921 037Other debit balances 193 883 446 98 339 959

1 554 637 546 1 208 878 971

12- INVESTMENTS HELD FOR TRADING31/12/2006 31/12/2005

L.E L.E

Investments fund – CommercialInternational Bank — 30 058 211Reverse repurchase agreements(treasury bills) –Calyon Bank — 19 767 200

— 49 825 411

13- CASH AND CASH EQUIVALENTS31/12/2006 31/12/2005

L.E L.E

Cash on hand 24 974 006 52 919 585Banks- current accountsand checks under collection 2 968 554 044 1 344 020 753Treasury Bills 47 986 151 10 269 690Banks-margin of Letter of Guarantees — 25 534 931Short–term deposits 1 293 767 376 218 309 914

4 335 281 577 1 651 054 873


19- OTHER RESERVES31/12/2006 31/12/2005

L.E L.E

Surplus from selling treasury stock in 2003 16 689 239 16 689 239Employees stock option plan 257 577 508 157 324 276*Cash f low hedge (loss)/gain (net) (4 271 048) 400 882Company share of items recognizedin associate’s equity (see note 6-2) (41 169 728) —Foreign exchange recognizeddirectly in equity 22 219 730 —Investment available for sale valuation 10 142 488 —

261 188 189 174 414 397*After deducting deferred income tax (see note 21/1).

20- TREASURY SHARESAmount in No. of

L.E shares

Treasury shares 635 958 760 2 000 000 GDREmployees stock optionplan – Treasury Shares 117 760 948 848 098 GDR

753 719 708Fair market value for those shares amounted to L.E 1 077 657 625 as atDecember 31, 2006.

21- HEDGE AGREEMENTS AND FORWARD RATE AGREEMENTSThe group concluded Hedge agreements in order to hedge interest rateand foreign currency exposure. Outstanding agreements as at December31, 2006 were as follows:

Orascom Telecom Holding1- Zero premium agreements – (cash flow hedge)

a- The Company has signed interest rate SWAP agreements tohedge the Libor interest rate f luctuations in syndication loan(term A-1) (note 14) with Credit Suisse Bank as follows:

Notional amount Interest SWAP rates End of(at trade date) agreements

US$ Floor Cap1 113 719 308 4.07% 6% February, 2009

The loss from the valuations of this agreement as of December 31,2006 is L.E 3 818 574 and represented in the Shareholders’ Equity(other reserves), after deducting deferred income tax amounted toL.E 763 715 and in other credit balances (derivative liabilities).

b- To hedge the LIBOR interest rate f luctuations from theSyndication loan (Term A2) (note 14) the Company entered intoa Hedge Agreement with ABN AMRO Bank on the following terms:

I. Notional amount Interest SWAP rates End of(at trade date) agreements

US$ Fixed rate100 000 000 5.586% February, 2009

The loss from the valuation of this agreement as of December 31,2006 is L.E 5 658 872 and represented in the Shareholders’ Equity(other reserves), after deducting deferred income tax amounted toL.E 1 131 775 and in other credit balances (derivative liabilities).

II. Notional amount Interest SWAP rates End of(at trade date) agreements

US$ Fixed rate200 000 000 4.8875% February, 2009

The gain from the valuation of this agreement as of December 31,2006 is L.E 4 138 635 and represented in the Shareholders’ Equity(other reserves), after deducting deferred income tax amounted toL.E 827 727, and in other debit balances (derivative assets).

2- Call spread agreement – (Fair value hedge)To hedge currency exposure between Euros and Dollars arisingfrom Orascom Telecom Algeria loans with banks as follows:

Notional Premium Rate End ofamount €/$ agreements

(at trade date)€ US$ Lower Upper

Citigroup 74 435 000 1 598 000 1.37 1.45 May, 2009Calyon Bank 74 435 000 *1 858 000 1.37 1.45 May, 2009

148 870 000 3 456 000

On April 6, 2005 (trade date) the contracts premium value wasreported as derivative assets. As of December 31, 2006 the fairvalue of the contracts amounted to US$ 1 223 975 equivalent toL.E 7 017 049 and the changes in fair value recognized in foreigncurrency difference in the income statement (note 24).

* To be paid in 4 annual installments starting from April 2006.As of December 31, 2006 the long term installments with anamount L.E 5 449 819 was reported as long term liabilities whilethe short term installments were reported as current liabilitieswithin the other credit balances.

— On February 27, 2006 and May 25, 2006 the company signed loan andfacility agreement with a total amount of US$ 2.5 billion with syndicationof foreign & Egyptian banks.The Company utilized US$ 1 187 millionto pay the unpaid portion of the 19.3% of Hutchison TelecommunicationInternational to Orascom Telecom Eurasia limited – OTEL (100% ownedsubsidiary) while the remaining of the loan was utilized to repay the Company’s existing indebtedness from loans, bonds and to finance it’soperations. Accordingly Orascom Telecom Holding recharged OTEL’scurrent account with its portion of the related borrowing costs. As ofDecember 31, 2006 the mentioned borrowing costs amounted to US$80 million equivalent to L.E 459,5 million.

— IWCPL has recently signed, but not drawn upon, three new ECA II facilities and two new DFI facilities which provide for aggregate borrowingsof USD 400 million. These facilities are available for the next 18 to 24months and are use-specific for purchase of network equipments.

15- DEBT DUE ON PURCHASE OF INVESTMENTS

31/12/2006 31/12/2005LE LE

Hutchison Telecommunications International — 6 745 036 241* Sheba Telecom –Banglalink 57 330 000 57 550 000**Minority interest in OTA & OTT 278 931 812 286 405 373

Minority interest in OTI — 60 427 500Others — 1 323 650

336 261 812 7 150 742 764

* The amount represents the unpaid portion of Orascom Telecom Venturesinvestment in Sheba Telecom – Banglalink that it will be paid after the seller fulfillment of certain conditions.

**This represents the amounts due to Oratel International shareholders (shareholder in OTA), Carthage Consortium Ltd. And Orascom Tunisia Holding shareholders (shareholders in OTT) to purchase additional stake in Orascom Telecom Algeria OTA and Orascom Telecom Tunisia OTT during 2005.

16- OTHER CREDIT BALANCES

Note 31/12/2006 31/12/2005No. L.E L.E

Accrued taxes 1 479 065 914 1 121 759 285Deferred revenues 1 082 320 483 898 053 972Deposits from others 44 079 981 84 101 199Contingent liabilities 365 662 311 259 418 423Derivative liabilities (21) 9 477 446 —Other credit balances 288 764 794 256 647 305

3 269 370 929 2 619 980 184

17- CREDITORS31/12/2006 31/12/2005

L.E L.E

Due to shareholders (Mr. Naguib Sawiris) 7 452 902 7 481 500Sundry creditors 264 776 280 676 605 670

272 229 182 684 087 170

18- SHARE CAPITALThe Company’s authorized share capital is L.E 2.5 Billion representedin 250 million shares of a nominal value of L.E 10 each. The issued andpaid in share capital was L.E 1.1 Billion represented in 110 million sharesof a nominal value L.E 10 each (1 Share = 2 GDRs).On January 22, 2006 the resolution of the extraordinary general assemblyin its meeting held on first November 2005 became effective, thatchanged the nominal value for the share from L.E 10 each to L.E 5therefore the issued and paid in share capital represented in 220 millionshares (1 Share=1GDR) (see note 34).

22- DEFERRED TAXDeferred taxes are calculated on the basis of the anticipated local tax rates in the various countries at the time of realization. These rates are normally basedon the rules in effect or adopted on the reporting date.

(A) Recognized deferred tax assets and liabilities

Assets Liabilities Net Movement31/12/2006 31/12/2005 31/12/2006 31/12/2005 31/12/2006 31/12/2005 31/12/2006

L.E. L.E. L.E. L.E. L.E. L.E. L.E.

Fixed assets 22 183 179 12 170 966 1 079 624 031 1 066 373 850 (1 057 440 852) (1 054 202 884) (3 237 968)Licenses and software 153 505 753 — 63 517 489 20 710 210 89 988 264 (20 710 210) 110 698 474Tax losses carried forward 17 135 752 218 957 801 — — 17 135 752 218 957 801 (201 822 049)Dividends 11 161 157 — — — 11 161 157 — 11 161 157Provisions 19 769 144 10 853 680 119 839 — 19 649 305 10 853 680 8 795 625Other items 21 631 900 29 660 712 828 803 100 219 20 803 097 29 560 493 (8 757 396)Cumulative translation adjustment — — — — — — (24 024 756)Recognized DTAssets/Liabilities 245 386 885 271 643 159 1 144 090 162 1 087 184 279 (898 703 277) (815 541 120) (107 186 913)Set off tax (58 040 802) (258 341 643) (58 040 802) (258 341 643) — — —Net DT assets/liabilities 187 346 083 13 301 516 1 086 049 360 828 842 636 (898 703 277) (815 541 120) (107 186 913)

Pakistan Mobile Communications Ltd. (Fair Value Hedge)International Wireless Communication Pakistan concluded forward rateagreements to hedge the changes in the foreign currency exchange ratearising from the US$ /Euro loan in order to fix the cash f lows in PKRat each debt principle repayment and debt interest payment dates.The agreements were made with the following banks:

Banks Notional amount Currency Interest rates SWAP End of(at trade date) Fixed rate agreements

Citigroup and ABN 37 710 524 USD KIBOR+1.25% February 2012Amro Bank 10 000 000 EURO KIBOR+1.25% December 2011

101 442 387 EURO KIBOR+1.25% December 201134 558 807 EURO KIBOR+1.25% March 2011

Standard Charteredbank and Deutchebank 164 739 394 USD KIBOR+4.49% November 2013

The gain from the valuations of these agreements as at December 31,2006, is PKR 1 166 589 335 equivalent to L.E. 109 756 868.

(B) Unrecognized deferred tax assets

31/12/2006 31/12/2005L.E L.E

Trade receivables 2 508 945 3 625 201Investments 30 916 468 27 630 544

33 425 413 31 255 745

Deferred tax assets resulted from the impact of temporary differences relatedto Trade receivables and investments were unrecognized due to the likelihoodthat the temporary difference will not reverse in the foreseeable future.

(C) Reconciliation of deferred tax expense31/12/2006

L.E

Net deferred tax assets (liabilities) movement (107 186 913)AddDeferred tax reported directly in shareholders’ equity (1 167 983)Effect of changes on proportionate companies 1 253 044Deferred tax expense (107 101 852)

(D) Income tax expense

31/12/2006 31/12/2005L.E L.E

Income tax for the year (950 158 160) (506 304 053)Deferred tax expenses (107 101 852) (323 242 460)Total income tax (1 057 260 012) (829 546 513)

23- PUT OPTION LIABILITIESOrascom Telecom Holding signed Put and Call option Agreements. Asof December 31, 2006 the fair value of these options are as follows:

Note 31/12/2006 31/12/2005No. L.E L.E

EIIC Put option 23-1 — 1 725 340 983Intel Capital CooperationPut option 23-2 3 714 984 —CDC Fennec Put option 23-3 — —

3 714 984 1 725 340 983


to the National Institute for Intellectual Property.Vocalone asked for the designation of an independent export inorder to asses “Allo OTA” net income since 2004 and to evaluateits related financial claims. Court decision rended on July 25,2006 in OTA’s favour.

27.7 ECMS is a party in a number of legal cases, which resulted fromcarrying out its activities. Based on the legal advice obtained, thecompany’s management believes that the outcome of this lawsuit–individually or in aggregate – would not be material toECMS results.

27.8 ARPT has issued in August 2005 decisions concerning the ratesto be used by Algeria Telecom (AT) and OTA for interconnection,colocalisation, OTA has contested these decisions and introduceda case at “conseil d’ Etat”. All the adjustments concerning thecolocalisation sites have been made in the accounts as of December2006. These adjustments took into account the results of theinventory made jointly by OTA and AT.

27.9 TWA has filed applications for issuance of exemption certificateof the income tax on payments made to Tyco Telecommunicationsand David Ross, USA, on the ground that the income of thenon-resident persons is not taxable in Pakistan. Article III of thetreaty for avoidance of double taxation between Pakistan andU.S.A fortifies the company’s stance. The company legal advisorshave confirmed the company stance in this case, however, nofinal order has been passed.

27.10 International Chamber of Commerce Arbitration initiated byOrascom Tunisia Holding and Carthage Consortium (OTH’swholly owned affiliates) against Kuwaiti Operator, WataniyaTelecom (WT.), regarding the material breach of the shareholdersagreement of Orascom Telecom Tunisia.

27.11Med Cable entered into an agreement dated November 17, 2005,with the Marseille Port Authorities for the use of the port inconnection with activities of the company. As part of the agreement,the Company has to make good the land they use within a periodof 30 years. No provision has been made for this legal obligationas an estimate of the likely costs cannot be reliable made.

28- CONTINGENT LIABILITIESIn addition to the contingent liabilities that may arise from the abovelegal statue, Orascom Telecom Holding has the following contingentliabilities:— The Company’s proportionate share in the Egyptian Company for

Mobile Services (ECMS) contingent liabilities is L.E 8.01 millionwhich represents the uncovered amount of the letters of guaranteeissued for the benefit of third parties.

— Ring Egypt for distribution and subsidiaries contingent liabilitiesrepresented in Letters of guarantee equivalent to L.E 43.73 million.

— Guarantees issued by PMCL banks on behalf of PMCL amountedto PKR 390 million equivalents to L.E 36 million.

29- CAPITAL COMMITMENTS— The Company’s proportionate share in the Egyptian Company for

Mobile Services capital expenditure commitments is L.E 336.9million which represents fixed assets contracts entered into and

not yet executed as of the consolidated balance sheet date.— InTouch for Telecommunication Company capital expenditures

commitments amounted to L.E 153 000 which represents theunpaid capital for long-term investment.

— Sheba Telecom capital commitments amounted to Euro 12 millionand US$ 11 million equivalent to L.E 158.6 million to purchaseproperty and equipment.

— International Wireless Communication Pakistan Ltd (IWCPL) hasthe followings commitments :1- In respect of capital and other expenditure amounted to PKR

4 388 million equivalent to L.E 412.82 million.2- IWCPL is required to pay USD 14.5 million equivalent to L.E

83.13 million in the year 2007 to Pakistan TelecommunicationAuthority in respect of renewal of GSM license.

3- IWCPL has entered into a forward exchange contract in whichthe company is committed to buy USD12 million equivalentto L.E 70 million at contractually agreed price of PKR 746,6 million.

4- IWCPL is committed to acquire 100% equity interests of Zarco Telecom (Private) Limited, Cybersoft Technologies (Private) Limited, Dancom Pakistan (Private) Limited and WOL Telecom Limited at purchase price with a total amountof PKR 979 million equivalent to L.E 92 million.

30- EMPLOYEES STOCK OPTION PLANThe Company has approved a plan to grant some of its employees’stock options in the Company’s shares through Orascom TelecomESOP Ltd, Malta (a wholly owned subsidiary). According to this planthe employees will have the right to receive the appreciation betweenthe stock option price and the exercise price of the shares when theoption vests. Orascom Telecom Holding shares held by OrascomTelecom ESOP Ltd., are presented as treasury stock in the consolidatedfinancial statements.On June 10, 2003 the Board of Directors approved the allotment of1 650 000 shares to certain officers and key employees based on theperiod of service and level of performance. Under this stock optionplan, the eligible employees will be entitled to exercise their option asfollows:-

Exercise Year No. of Shares2006 542 5842007 422 8342008 174 7502009 128 2502010 104 0002011 37 500

1 409 918

31- SEGMENT REPORTINGSegment information is presented in respect of the Group’s businessand geographical segments. The primary format, business segment, isbased on the Group’s management and internal reporting structure.Inter-segment pricing is determined on an arm’s length basis.Segment results, assets and liabilities include items directly attributableto a segment as well as those that can be allocated on a reasonablebasis. Unallocated items comprise mainly investments, loans andborrowings and related expenses, corporate assets (primarily thecompany’s headquarters) and income tax assets and liabilities.

26- GRANTED GUARANTEES FROM OTH TO THE SUBSIDIARIESOrascom Telecom Holding signed agreements as a guarantor for the following subsidiaries:-

Subsidiary name To guarantee Maximum Liability ExpiryPioneer Co. Pella Company tax position US$ 50 million 31/12/2007

Orascom Telecom Iraq Unpaid amount from the 5.5 % + unpaid amount As long as thesupplier facility agreement for Alcatel US$ 2.47 million agreement is validwith Alcatel & Motorola & Motorola US$ 1.55 million

as of 31/12/2006.

Sheba Telecom-Banglalink Supplier facilities agreement € 50 million and US$ 35 million As long as thewith Siemens AG, Huawei Tech respectively + any interest or costs agreement is validInvestments

Med Cable Facilities from West LB € 16 million + any As long as theand Calyon Banks. interest or costs agreement is valid

23-1On October 26, 2006, Orascom Telecom Holding has exercisedthe Put Option Plan and signed a Sale and Purchase Agreement to purchase from EIIC its 7.91% shares in Orascom Telecom Algeriafor an amount of USD 399 million.

23-2On May 19, 2006, as part of the agreement between OTH andIntel Capital Cooperation to establish Orascom Telecom Wimax Ltd-OTWL, OTH granted Intel Capital Cooperation the followingoptions:

a- Put optionIntel has the right to require OTH to buy from it all its sharesin Orascom Telecom Wimax Ltd.-OTWL on the occurrenceof non compliance conditions or during or after the fourthanniversary from the date of the agreement.As of December 31, 2006 the Company’s management hasestimated the fair value of this option at US$ 648 000 equivalentL.E. 3 714 984.

b- Commitment to sell a non financial assetIntel has the right but not the obligation to purchase thewireless spectrum license in certain rollout countries, wheresuch rollout was not completed, at the same price as paid byOTWL.As of December 31, 2006 the company’s management is ofthe opinion that this option has zero value.

23-3CDC Fennec Ltd, one of the lending institutions of OrascomTelecom Algeria, has the option to convert its liabilities intoshares in Orascom Telecom Holding at any time within the 2 yearssubsequent to December 18, 2003 or until all amounts due arefully paid.

As of December 31, 2006 the company’s management is of theopinion that this option has zero value.

24- NET FINANCING COSTS Note 2006 2005

L.E L.E

Financing expenses (1 908 609 152) (805 568 762)Amortization of loanarrangement fees (3-13) (181 861 850) (57 226 717)Financing income 140 385 004 63 729 844(Losses)/Gains fromforeign exchanges (3-2) (261 027 874) 327 576 356

(2 211 113 872) (471 489 279)

25- EARNINGS PER SHAREEarnings per share are calculated using the weighted average numberof ordinary shares outstanding through the year.

2006 2005

Net profit for the year (L.E) 4 207 951 004 3 944 793 397Less: proposed employees dividends (33 851 165) (28 512 500)Net profit for the year available for distribution (L.E) 4 174 099 839 3 916 280 897Weighted average numberof ordinary shares 217 362 744 218 590 090Earnings per share (L.E) 19.20 17.92

27- LEGAL STATUSThe Legal Status as at December 31, 2006 are represented in thefollowings:

27-1 The company has initiated arbitration against the government ofrepublic of Chad in the International Chamber of Commerce,to indemnify approximately Euro 40 million financial claims inChad Mobile (suspended company).

27-2 Jordan Tax claims for JD 61.8 million income tax initiated by theJordanian Tax Authority in connection with the sale of Fastlink(Jordan Mobile Telecommunication Services) in 2002 to MTC byPioneer Investment Ltd a wholly owned subsidiary of OTH.Pioneer Co. has claimed that the tax payments are unfounded atpresent OTH is not a position to asses the case status.

27-3 PMCL the subsidiary of International Wireless CommunicationsPakistan Ltd (IWCPL) has certain cases are pending in differentcourts of law. The management of the company is confident thatthese cases will be decided in favor of the company.

27-4 The licenses issued by the Bangladeshi government to all mobilephone operators require the government to be paid a license feesand royalty of TK 1 100 per set per year. On 18 June 2006 theBangladesh district court of Dhaka has omitted the related clausesof fees, royalty and charges of said License with effect from 1 July2005. The government is currently in legal dispute with all mobilephone operators as to whether License and Royalty fee up to 1July 2005 should be borne by the operators or by the subscribers.

27-5 A company registered on 4 April 2005 in the name ofBanglaLink Ltd, filed a suit against Sheba Telecom (PVT) Ltd.for payment of TK 58.92 million equivalent to L.E 4.85 million.The application for temporary injunction against the use of thetrade mark has been rejected in the district court of Dhaka,Bangladesh and the said suit in now pending for final hearingand disposal.

27.6 Vocalone Company for telecommunications and internet servicesfiled a suit against Orascom Telecom Algeria considering that thedenomination "ALLO" had been previously registered by Vocalone


32- TAX STATUS OF THE PARENT

32-1 Corporate tax and movable capital taxYears from 1997 till 1999:The Company submitted its tax returns for these years, andreceived form No. 18 taxes, in the name of Orascom Technology(formally the name of Orascom Telecom Holding) including thetax assessment with a total amount of L.E 7 million for theseyears. However, in January 16, 2003 the Company’s managementfiled an appeal, against the assessment included in this form. OnNovember 3, 2004 the appeal committee accepted the company’sconclusion and decided to return the file back to the corporateincome tax inspectorate for inspection. On December 20, 2005,the company rejected what the corporate income tax inspectoratehas ended up with, and requested for returning the file to theinternal committee in the corporate income tax inspectorate.

Year 2000The Company’s books were inspected by Tax Authority ondiscretionary basis, and the company was notified by the formno. (19) taxes, the company appealed there to during the legalgrace and waiting for the notice of the internal committee at theinspectorate to issue a resolution for re-inspection.

Years from 2001 till 2004:The Company submitted its Income Tax returns for these yearson the legal required dates, and the tax authority has not yetinspected the Company’s records for these years.— As per the tax return for these years, there is no corporate tax

due on the net income. Management has applied, whenpreparing the tax return, article No. (111) of the Income TaxLaw No. 157 for 1981. According to the aforementioned articlenet profit derived from activities that are being undertakenabroad by independent entity is not subject to tax in Egypt.

Year 2005-2006Starting from 1/1/2005, the Company's profits are subject toEgyptian Income Tax Law No. 91 for 2005 which supersede thelaw No. 157 for 1981. Accordingly the company has filed the taxreturn for year 2005 according to the provisions of law No. 91for2005 and its executive regulations.

32-2 Stamp duty and state resources development dutyStamp duty and state resources development duty were settledand paid up to October 31, 2003. The company’s books arecurrently under examination till 31/12/2005.

32-3 Salary taxYears till 2004:The company’s books where examined and the differences aresettled.

Year 2005:The company’s books were not examined and no claims werereceived.

33- SUBSIDIARIES GOING CONCERN— Orascom Telecom Iraq -subsidiary of Orascom Iraq Holding- had

obtained a two years license to operate and manage mobilecellular service from the Iraqi Ministry of Communications(MOC). This temporary license agreement expired on December

22, 2005, from that date the Iraqi Ministry of NationalCommunication and Media Commission keeps to extend thelicense period for three months, the last extension was till March31, 2007. In case the management failed to renew the validity ofthe license and obtain a permanent license, Orascom TelecomHolding is committed to transfer all long term assets to anothersubsidiary outside Iraq at amounts not less than its carryingamount. Accordingly, the management decided to apply goingconcern assumption.The total consolidated assets and revenue of Orascom Iraq Holdingrepresent 4.01% and 11.7 % respectively of the Groups totalconsolidated assets and revenues.

— During the financial year ending December 31, 2006 ShebaTelecom (subsidiary of Orascom Telecom Ventures) incurred anet accumulated loss of TK 8 273 318 213 equivalent to L.E 679404 892. However the management is confident that the companywill continue in operational existence for the foreseeable futureon the basis of improved profitability and continued support ofOrascom Telecom Holding.

— During the financial year ending December 31, 2006 ConsortiumAlgerian Telecommunications incurred net accumulated loss ofDZD 2 629 371 495 equivalent to L.E 208 377 691, OrascomTelecom Holding proportionate share in the retained losses is L.E104 188 845 and since the retained deficit exceeded half thecompany’s issued & paid-up capital, an extra-ordinary generalassembly meeting will be settled to study the going concern ofthe company.

34- SUBSEQUENT EVENTS— On January 25, 2007 the extraordinary general assembly has agreed

to amend article no. (6) and (7) of the statutes of the companythat pertain the issued capital and the nominal value of theCompany’s capital shares. The issued capital would become onebillion and one hundred million Egyptian pound represented inone billion and one hundred million shares with a par value ofLE 1 per share.

— Orascom Telecom Holding announces a potential plan to repurchaseup to the GDR’s equivalent to 5 % of the outstanding shares overthe next 12 months.

— During January 2007 Orasinvest Holding Inc. Company enteredinto an agreement to purchase a new building in Zamalek,Cairo for the amount of USD 8.5 million. As of the date ofissuing the financial statements an amount of USD 1.5 millionwas paid.

— On February 4, 2007, Orascom Telecom Holding announced thatit has successfully issued US$ 750 million of Senior Notesdue 2014 through Orascom Telecom Finance S.C.A (Luxembourg).The Notes bear an interest rate of 7.875 % per annum and includestypical high yield bond covenants, and are pari passu with OrascomTelecom’s US$ 2.5 billion senior secured bank facility.The issuer will then lend the proceeds to Orascom TelecomHolding. The proceeds of the bond issue will be used by OrascomTelecom for general corporate purposes which may includeinvestments in new and existing operation and purchases ofOrascom Telecom GDRs.

35- FINANCIAL INSTRUMENTS & RELATED RISKMANAGEMENTThe financial instruments are represented in cash on hand & at banks,accounts receivables, debit balances, investments, due to/from subsidiaryand related parties, loans, bonds, bank overdrafts, suppliers and creditbalances. The carrying value of these financial instruments represent a

31-1 Primary Reporting Format – Business SegmentsThe revenue analyses in the tables below are based on the type of business activities and services that are distinguishable component.

Year ended December 31, 2006Business segments

GSM (*) Telecommunication Internet & Elimination TotalService (**) fixed lines

service (***)(In thousands L.E)

Total revenue from external customers 22 292 760 2 827 526 206 323 — 25 326 609Inter-segment revenue 361 260 1 875 972 — (2 237 232) —Total revenue 22 654 020 4 703 498 206 323 (2 237 232) 25 326 609Gross profit 16 429 362 120 381 134 015 — 16 683 758Other operating revenues 267 012Other operating costs (1 430 758)Share of losses of associates (97 324)Selling, general and administrative expenses (3 836 063)Remunerations and allowances for board members (32 377)Provisions (110 785)Impairment of assets (222 765)Depreciation and amortization of assets (3 381 245)Net financing costs (2 211 114)Income tax (1 057 260)Others 44 847Net profit for the year 4 615 926

(*) The GSM revenue comes mainly from the following companies:— Carthage Consortium Co. including Orascom Telecom Tunisia.— Orascom Tunisia Holding Co. including Orascom Telecom Tunisia.— Egyptian Company for Mobile Services.— International Wireless Communication Pakistan Ltd. including Pakistan Mobile Communication Ltd.— Orascom Iraq Holding Co. including Orascom Telecom Iraq & Iraqna.— Orascom Telecom Algeria Co.— Orascom Telecom Ventures Co. including Sheba Telecom.

(**) The Telecommunication Services revenue comes mainly from the following companies:— Ring Distribution Co.— Orasinvest Holding Co.— M-Link Co.— Arpu for Telecommunication services.

(***) The Internet and Fixed line services revenue comes mainly from the following companies:— Consortium Algerian Telecommunication.— In Touch for Telecommunication

GSM Telecommunication Internet & Unallocated TotalService fixed lines assets/

service liabilities(In thousands of L.E)

Segment assets 37 560 933 2 018 418 734 631 — 40 313 982Unallocated assets — — — 9 192 221 9 192 221Total assets 37 560 933 2 018 418 734 631 9 192 221 49 506 203

Segment liabilities 8 703 960 744 900 432 194 — 9 881 054Unallocated liabilities — — — 27 299 368 27 299 368Total liabilities 8 703 960 744 900 432 194 27 299 368 37 180 422

31-2 Secondary Reporting Format—Geographical segmentsGSM telecommunication services revenues and internet services revenues are managed on world wide basis, but operate in three principal geographicalareas, North Africa, Middle East and South Asia. In presenting information on the basis of geographical segments, segment revenue is based on thegeographical location of operation. Segment assets are based on the geographical location of the assets. The group's operations are reported undergeographical segments, ref lecting their respective size of operation, they are as follows:— North Africa: Comprising Algeria and Tunisia,— Middle East: Comprising Egypt, Iraq,— South Asia: Comprising Pakistan and Bangladesh; and— Others: Malta, United Kingdom and other countries not included above.The revenue analysis in the tables below are based on the location of the operating company, which is the same as the location of the major customersand the location of the operating companies:

Year ended December 31, 2006Geographical segments

North Africa Middle East South Asia Others Unallocated TotalIn thousands of L.E

Total revenues 10 080 852 8 101 538 6 392 150 752 069 — 25 326 609

Segment assets 18 677 787 7 201 584 13 466 674 967 937 9 192 221 49 506 203


Notesreasonable estimate to their fair values with exception of loans whosepresent value represent a reasonable estimate of their fair values. NoteNo. (3) of the notes to the financial statements includes the majoraccounting policies used in recording and measurement of the significantfinancial instruments and the related revenues and expenses.

36- MANAGEMENT OF FINANCIAL RISK36-1 Credit risk

This risk is represented in the debtors, and affiliated inability topay their debts. This risk is considered low as the companyperiodically assesses the recoverability of these balances and workon collecting it.

36-2 Foreign currency riskAs some transactions are executed in foreign currencies, theCompany may be subject to risk of exchange rate f luctuations.Therefore the company concluded some agreements to hedgeforeign currency exposure.

36-3 Interest Rate RiskThis risk represents interest rate changes, which may have animpact on the results of operations. This risk is considered highas the Company has a significant number of loans, facilities and

bonds payable bearing variable interest rate, however the Companyutilizes any available funds to reduce any interest exposure inaddition to the Hedge agreements to hedge the interest rate riskrelated to loans and bonds.

37- COMPARATIVE FIGURES1- The comparative figures have been restated as follows:

A- In view of the interpretation of IAS 32 and 39, the companyhas recognized Put option Liabilities accordingly the related comparative figures have been restated as follows:

— Increase in goodwill by an amount LE 1 303 100 800.— Increase in Put option liability by an amount LE 1 725 340 983.— Increase in net income of year 2005 by an amount LE 44 781 963.— Decrease in minority by an amount LE 466 625 264.— Decrease in subsidiary companies by an amount LE 396 882.B- Starting from June 30, 2006, the Company has elected to

apply to IFRS 2 Share Based Payments to report the changein ESOP plan settlement method from cash settlement toequity settlement. Accordingly, the amount of LE 157 324 276was reclassified from current liabilities to other reserves inequity section.

2- Certain comparative figures have been reclassified to be consistentwith the classification of the current financial statements.


Independent Auditor’s Report

To The Board of Directors of Orascom Telecom Holding (S.A.E)

We have audited the accompanying consolidated financial statements of Orascom Telecom Holding (S.A.E), which comprise the consolidated balance sheet as atDecember 31, 2006, and the consolidated income statement, consolidated statement of changes in shareholders’ equity and consolidated cash f lows statement forthe year then ended, and a summary of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial ReportingStandards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financialstatements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accountingestimates that are reasonable in the circumstances.

Auditor’s Reasonability

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with InternationalStandards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The proceduresselected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether dueto fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidatedfinancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Orascom Telecom Holding (S.A.E) as ofDecember 31, 2006, and of its financial performance and its cash f lows for the year then ended in accordance with International Reporting Standards.

Cairo, March 27, 2007

KPMG Hazem Hassan

• Auditor’s Report• Consolidated Balance Sheet• Consolidated Income Statement• Consolidated Statement of Changes in Shareholders’ Equity• Consolidated Cash Flows• Significant Accounting Policies and Notes to the Consolidated Financial Statements

Financial StatementsInternational Financial Reporting Standards IFRS (in US$)


Orascom Telecom Holding S.A.EConsolidated Balance Sheet As at December 31, 2006

Note No. 31/12/2006 31/12/2005US$ US$

AssetsNon-current assetsProperty and equipment (net) (2.6/4) 3 322 240 345 2 362 164 509Property and equipment under construction (5) 718 892 473 556 698 344Licenses and software (net) (2.7.ii/6) 975 404 754 1 028 404 789Goodwill (2.7.i/7) 718 889 274 496 089 134Investments (2.8.i/2.8.iii/8) 1 287 514 441 1 309 940 276Payments for investments (9) 4 939 408 4 430 137Deferred tax assets (2.24/24.A) 32 678 542 2 311 297Other assets (10) 19 302 838 113 602 267Total non-current assets 7 079 862 075 5 873 640 753

Current assetsInventories (net) (2.10) 135 885 249 87 301 190Trade and other receivables (net) (2.9) 214 336 511 361 268 946Due from related parties 56 840 452 20 139 485Prepaid expenses 66 462 686 60 666 676Other current assets (11) 363 432 231 218 787 271Investments (2.8.ii) 2 376 620 8 657 760Cash and cash equivalents (2.11/12) 756 197 728 286 890 508Total current assets 1 595 531 477 1 043 711 836Total assets 8 675 393 552 6 917 352 589

Equity and liabilitiesEquityIssued capital (13) 318 923 826 318 923 826Legal reserve (2.14) 132 016 131 123 909 807Other reserves (14.B) 45 661 302 34 518 883Retained earnings 1 019 379 641 502 833 125Net profit for the year 720 758 028 666 731 423Cumulative translation adjustments (2.4) (41 969 848) (70 236 879)Treasury stock (2.13.i/ 2.16.ii/14.A) (131 470 383) (28 108 755)Total equity attributable to equity holders of the parent 2 063 298 697 1 548 571 430Minority interest 125 222 637 123 299 376Total equity 2 188 521 334 1 671 870 806

LiabilitiesNon-current liabilitiesBorrowings (16) 3 580 235 918 1 547 610 007Creditors long-term (17) 47 484 595 120 825 917Deferred tax liabilities (2.24/24.A) 189 438 228 144 021 309Total non-current liabilities 3 817 158 741 1 812 457 233

Current liabilitiesBorrowings (16) 608 818 702 524 756 975Trade and other payables (2.18) 973 567 310 542 468 372Due to related parties 17 114 832 13 421 960Debt due on purchase of investments (18) 58 653 726 1 242 526 979Accrued expenses 440 638 636 357 788 241Other current payables (19) 570 272 271 452 263 416Put option liabilities (20) 648 000 299 798 607Total current liabilities 2 669 713 477 3 433 024 550Total liabilities 6 486 872 218 5 245 481 783Total equity and liabilities 8 675 393 552 6 917 352 589


Orascom Telecom Holding S.A.EConsolidated Income Statement for the financial year ended December 31, 2006

Note 31/12/2006 31/12/2005No. US$ US$

Cellular operations revenues (2.19.i) 3 883 829 958 2 775 454 731Telecommunications service revenues (2.19.ii) 504 606 489 426 174 409Internet service and fixed lines revenues (2.19.iii) 35 852 497 24 200 966Total revenues 4 424 288 944 3 225 830 106

Cellular operations cost (1 782 733 951) (1 298 315 868)Telecommunications service cost (467 817 209) (367 872 273)Internet service and fixed lines cost (14 572 037) (12 693 932)Total operating cost (2.20) (2 265 123 197) (1 678 882 073)Gross profit 2 159 165 747 1 546 948 033

Other income 29 494 239 32 323 338Negative goodwill — 9 014 654Selling, general and administrative expenses (2.21/2.22) (682 160 893) (524 095 074)Remunerations and allowances for board members (5 626 180) (5 326 409)Provisions (26) (19 251 010) (13 083 953)Allowances (30 770 202) (36 342 329)Capital loss (3 803 640) (702 720)Impairment of assets (2.12) (5 084 492) —Depreciation and amortization of assets (2.6/2.7) (73 571 872) (70 531 216)Net financing costs (23) (384 606 682) (81 367 025)Share of results of associated companies (8.2) (16 911 868) —Gain from sale of subsidiaries (net of tax) 4 859 412 70 466 988Gain from deconsolidation of subsidiaries (net of tax) — 110 366Profit before income tax 971 732 559 927 414 653Income tax (2.24/24.D) (183 719 219) (142 866 138)Profit for the year 788 013 340 784 548 515Attributable to:Equity holders of the parent 720 758 028 666 731 423Minority interest 67 255 312 117 817 092Profit for the year 788 013 340 784 548 515

Earnings per share (25) 3.32 3.05


Executive Officer Finance (CFO) Chairman and Managing Director

Independent auditor's report "attached"


Orascom Telecom Holding S.A.EConsolidated Statement of Changes in Shareholders' Equity for the financial year ended December 31, 2006

Note Issued Legal Other Retained Net profit for Cumulative Treasury Total Minority Total

No. capital reserve reserves earnings the year translation stock interest equity

adjustments

US$ US$ US$ US$ US$ US$ US$ US$ US$ US$

Balance as at 1/1/2005 318 923 826 118 103 760 5 109 428 349 841 856 294 872 589 54 703 355 (15 416 801) 1 126 138 013 419 183 995 1 545 322 008

Transfer to retained earnings — — — 294 872 589 (294 872 589) — — — — —

Transfer to legal reserve — 5 806 047 — (5 806 047) — — — — — —

Sale/purchase of treasury stock — — — — — — (18 098 561) (18 098 561) — (18 098 561)

Cash flow hedges gain taken to equity (net) — — 69 658 — — — — 69 658 — 69 658

Movement in fair value investments available for sale — — 2 002 825 — — — — 2 002 825 — 2 002 825

Holding company distribution — — — (130 975 045) — — — (130 975 045) — (130 975 045)

Adjustments on retained earnings — — — (5 100 228) — — — (5 100 228) — (5 100 228)

Movement in minority interest — — — — — — — — (425 376 668) (425 376 668)

Employee stock option plan (36) — — 27 336 972 — — — — 27 336 972 — 27 336 972

Net profit for the financial year ended 31/12/2005 — — — — 666 731 423 — — 666 731 423 117 817 092 784 548 515

Cumulative translation adjustments — — — — — (124 940 234) 5 406 607 (119 533 627) 11 674 957 (107 858 670)

Balance as at 31/12/2005 318 923 826 123 909 807 34 518 883 502 833 125 666 731 423 (70 236 879) (28 108 755) 1 548 571 430 123 299 376 1 671 870 806

Transfer to retained earnings — — — 666 731 423 (666 731 423) — — — — —

Transfer to legal reserve — 8 106 324 — (8 106 324) — — — — — —

Purchase of treasury stock (2.13.i/14.A) — — — — — — (102 863 338) (102 863 338) — (102 863 338)

Cash flow hedges transferred to income statement — — (69 658) — — — — (69 658) — (69 658)

Cash flow hedges loss taken to equity (net) (21.1) — — (744 994) — — — — (744 994) — (744 994)

Movement in fair value investments available for sale — — (1 033 511) — — — — (1 033 511) — (1 033 511)

Realized loss from sale of investment available for sale — — (1 191 040) — — — — (1 191 040) — (1 191 040)

Company share of items recognized in associate equity (8.2) — — (7 181 184) — — — — (7 181 184) — (7 181 184)

Holding company distribution — — — (135 548 545) — — — (135 548 545) — (135 548 545)

Movement in minority interest — — — — — — — — (66 511 292) (66 511 292)

Foreign exchange recognized directly in equity — — 3 875 760 — — — — 3 875 760 — 3 875 760

Employee stock option plan — — 17 487 046 — — — — 17 487 046 — 17 487 046

Net profit for the financial year ended 31/12/2006 — — — — 720 758 028 — — 720 758 028 67 255 312 788 013 340

Cumulative translation adjustments — — — (6 530 038) — 28 267 031 (498 290) 21 238 703 1 179 241 22 417 944

Balance as at 31/12/2006 318 923 826 132 016 131 45 661 302 1 019 379 641 720 758 028 (41 969 848) (131 470 383) 2 063 298 697 125 222 637 2 188 521 334


Orascom Telecom Holding S.A.EConsolidated Statement of Cash Flows for the financial year ended December 31, 2006

Note Financial year Financial yearNo. ended 31/12/2006 ended 31/12/2005

US$ US$Cash flows from operating activitiesNet profit for the year before tax and minority 971 732 559 927 414 653Adjustment to reconcile net profit to cashflows from operating activitiesDepreciation, amortization and impairment of assets 593 443 726 436 607 349Negative goodwill — (9 014 654)Amortization of loan arrangement fees cost (23) 31 601 987 9 855 698Unrealized exchange difference 40 408 726 (56 947 765)Provisions and allowance 50 021 211 49 426 282Interest income (23) (24 394 589) (10 975 680)Interest expenses (23) 332 043 391 138 905 735Dividends (459 054) —Share of results of associated companies (8.2) 16 911 868 —Gain from sale of subsidiaries (4 859 412) (70 466 988)Gain from deconsolidation of subsidiaries — (110 366)Capital loss 3 803 640 702 720

2 010 254 053 1 415 396 984Changes in working capitalChanges in current assets 12 815 871 (323 253 734)Changes in current liabilities 171 468 658 354 315 711Cash generated from operation 2 194 538 582 1 446 458 961Income tax paid (134 544 607) (58 589 823)Interest paid (320 208 949) (122 983 692)Net cash provided by operating activities 1 739 785 026 1 264 885 446

Cash flows from investing activitiesPayments for property and equipment and property under construction (1 291 117 387) (1 399 264 090)Proceeds from sale of property and equipment 2 285 424 6 486 355Interest received 19 511 145 10 341 996Dividend received 459 054 —Payments for investments (1 697 353 328) (591 899 474)Payments for licenses and software (58 637 074) (78 600 741)Proceeds from sale of investments 14 234 513 105 438 059Net cash used in investing activities (3 010 617 653) (1 947 497 895)

Cash flows from financing activitiesProceeds from borrowings 3 474 299 619 792 739 534Repayment of borrowings (1 419 353 174) (158 616 640)Changes in other assets 14 723 682 36 871 678Payments for treasury stocks (110 510 040) (18 098 561)Change in minority interest (82 285 525) (62 134 801)Dividends paid (141 372 207) (141 130 166)Payments for capital lease obligation (1 990 268) (315 325)Net cash provided by financing activities 1 733 512 087 449 315 719Net cash movement 462 679 460 (233 296 730)Cash and cash equivalents as at January 1st 286 890 508 512 521 099Changes in cumulative translation adjustments 6 627 760 7 666 139Cash and cash equivalents as at December 31 (2.11/12) 756 197 728 286 890 508



1- GENERAL

1.1 Legal statusOrascom Telecom Holding S.A.E. "the Parent Company" is an Egyptian Joint Stock Company established in accordance with the provisions of the Companies Law No. 159 of 1981 and its executive regulations and in accordance with the Capital MarketLaw No. 95 of 1992 and its executive regulations. The Parent Company was registered in the commercial register on July 29, 1997 under No. 114812 and is domiciled in Egypt. The Parent Company and its Subsidiaries are referred to hereinafter as "theGroup".

The Company extraordinary general assembly, in its meeting heldon February 9, 2000, approved the change of the governing lawfrom the Companies' Law No. 159 of 1981 to the Capital MarketLaw No. 95 of 1992. Also, by virtue of a resolution of the extraordinary general assembly, in its meeting held on June 13,2000, the Company's name was changed from “Orascom Telecom”to “Orascom Telecom Holding”. The Capital Market Authority'sapproval for these changes had been obtained on July 12, 2000.These changes were registered in the commercial register under No. 134934.

By virtue of a resolution of the extraordinary general assembly in its meeting held on September 1, 2004, the Company’s Premiseswas changed to Nile City Towers, Cairo, and was registered in the commercial register under No. 365751.

1.2 Ultimate holding companyOn May 29, 2005, 50% + 2 shares of Orascom Telecom Holdingcapital shares were acquired by Weather Capital S.ar.L registeredon Luxemburg which is fully owned (100%) by Weather InvestmentsS.P.A registered in Italy.

During 2006, the 50% + 2 shares structure was changed to be 26.24% owned by Weather Capital S.ar.L and 23.76% acquired by Weather capital Finance S.A (Luxembourg) which is fully owned company by Weather Capital S.ar.L.

1.3 Purpose of the companyThe Parent Company's purpose is to participate in companies issuing securities or to increase its participation in the capital ofthese companies. The Company may have interest or participate,by any mean, in companies and other enterprises that have activities similar to those of the Company or those that may assist the Company to achieve its objective in Egypt or abroad.It may also merge into those companies and enterprises purchasethem or affiliate them, pursuant to the provisions of the law andits executive regulations.

1.4 Authorization of financial statements These statements were authorized by the directors for issue on March 26, 2007.

2- SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in preparing these consolidated financial statements are set out below.

2.1 Statement of ComplianceThese consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and its interpretations adopted by the International Accounting Standards Boards (IASB) with due acknowledgementof the interpretation of the International Financial Reporting Interpretation Committee (IFRIC).

In compliance with the Egyptian Companies laws and regulations,the Parent Company prepares its statutory consolidated financialstatements in accordance with Egyptian Accounting Standards (EASs); these financial statements are presented in Egyptian Pound.

The primary differences between the statutory consolidated financial statements and the consolidated financial statements prepared in accordance with IFRSs and presented in US$ (IFRS/US$) include, but are not limited to the following:- Recognition of certain capital lease agreements (IAS-17).- Recognition of employees' share in dividends (IAS-19).

2.2 Basis of PreparationThe consolidated financial statements are translated to/and presented in US Dollar. The Company’s reporting currency is the Egyptian pound. These translated financial statements in USDollar are based on the Egyptian pound financial statements andare translated as stated in note (2.4) financial statements translation.The consolidated financial statements are prepared using the historical cost basis, except for certain financial instruments thatare measured at fair value in accordance with IAS 39.

The preparation of financial statements in conformity with IFRSsrequires management to make judgments, estimates and assumptionsthat affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under thecircumstances, the results of which form the basis of making thejudgments about carrying values of assets and liabilities that arenot readily apparent from other sources. Actual results may differfrom these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognizedin the period in which the estimate is revised if the revision affectsonly that period or in the period of the revision and future periods if the revision affects both current and future periods.

The accounting policies set out below have been applied consistentlyto all years presented in these consolidated financial statements.

2.3 Basis of ConsolidationThe consolidated financial statements comprise the Parent Company and its principal subsidiaries (the group) and the Group's interest in jointly controlled entities. The principal subsidiaries and related consolidation method are set forth below:

Fully consolidated subsidiariesSubsidiaries are entities controlled by the Parent Company. Control exists when the Parent Company has the power, directlyor indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessingcontrol, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statementsfrom the date that control commences until the date that controlceases. A listing of the principal subsidiaries is given in note (34.1).

Joint VenturesJoint ventures are those entities over whose activities the Grouphas joint control, established by contractual agreement. The consolidated financial statements include the Group’s proportionateshare of the entities’ assets, liabilities, revenue and expenses withitems of a similar nature on a line by line basis, from the date that joint control commences until the date that joint control ceases. A listing of the joint venture is given in note (34.2).

Transactions eliminated on consolidationAll intragroup balances and transactions, and any unrealized gainsarising from intragroup transactions are eliminated when preparingthe consolidated financial statements. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

2.4 Foreign CurrencyIn line with IAS 21 (The effects of Changes in Foreign ExchangeRates) foreign currency transactions and financial statements offoreign operations are translated as follows:

Foreign currency transactionsThe Parent Company and its subsidiaries maintain their books of account in local currencies of the economies in which they operate. Transactions in foreign currencies are translated to localcurrency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreigncurrencies at the balance sheet date are translated to local currencyat the foreign exchange rate ruling at that date. Foreign exchangedifferences arising on translation are recognized in the income statement.

Financial statements translationThe assets and liabilities of the Parent Company and its subsidiaries,and its proportionate share in the assets and liabilities of joint ventures including goodwill are translated to US Dollar at foreignexchange rates ruling at the balance sheet date. The revenues andexpenses are translated to US Dollar at the average foreign exchangerate for the period. Shareholders’ equity accounts are translatedat historical exchange rates. Foreign exchange differences arisingon retranslation are recognized directly in a separate componentof equity.On disposition of a subsidiary, the related cumulative translationadjustments are recognized in the income statement as a componentof the gain and loss on disposal.

2.5 Derivative financial instrumentsThe Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising fromoperational, financial and investment activities and to manage cash in various currencies. In accordance with its treasury policy,the Group does not hold or issue derivative financial instrumentsfor trading purposes. However, derivatives that do not qualify forhedge accounting are accounted for as trading instruments.

In line with IFRS 7 (Financial Instruments: Disclosures) and IAS32 (Financial Instruments: Presentation), derivatives are reportedwithin the current assets and the current liabilities items in the consolidated balance sheet and based on IAS 39 (Financial Instruments: Recognition and Measurement), the gain or loss from the ineffective portion of the hedge contracts is recognizedimmediately in the consolidated income statement.

2.6 Property and equipmentOwned assetsIn line with IAS 16 (Property, Plant and Equipment), items of property and equipment are stated at historical cost less accumulateddepreciation and impairment losses (see accounting policy 2.12).The cost of self-constructed assets includes the cost of materials,direct labour and an appropriate proportion of production overheads.Where parts of an item of property and equipment have differentuseful lives. They are accounted for as separate items of propertyand equipment.

Leased assetsLeases in terms of which the Group assumes substantially all therisks and rewards of ownership are classified as finance leases. Assets acquired by way of finance lease are stated at an amountequal to the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses (see accounting

policy 2.12). The interest expense component of finance lease payment is recognized in the income statement using the effectiveinterest rate method. All other leases are classified as operatingleases, rentals payable under operating leases are charged to theincome statement on straight-line basis over the terms of the relevant lease contract.

Subsequent costsThe Group recognizes in the carrying amount of an item of property and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the Groupand the cost of the item can be measured reliably. All other costsare recognized in the income statement as an expense as incurred.

DepreciationDepreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an itemof property and equipment. The estimated useful lives are as follows:Buildings 50 yearsCell sites 8 yearsTools 5-10 yearsComputers equipment 3-5 yearsFurniture and Fixtures 5-10 yearsVehicles 3-6 yearsLeasehold improvements and Renovations 3-8 years

The residual value, if not insignificant, is reassessed annually.

2.7 Intangible assets(i) Goodwill

In line with IFRS 3 (Business Combinations), all business combinations are accounted for by applying the purchase method. Goodwill represents amounts arising on acquisitionof subsidiaries, associates and joint ventures. Goodwill represents the difference between the cost of the acquisitionand the group's share in the fair value of the underlying assets and liabilities of the acquired business.— Goodwill is stated at cost less any accumulated impairment losses.— Negative goodwill is recognized immediately in the income statement.— Goodwill resulting from further acquisitions after control

is obtained is determined on the basis of the cost of theadditional investment and the carrying amount of net assets at the date of acquisition, accordingly, no fair valueadjustments would be recognized.

(ii) Other intangible assetsIn line with IAS 38 (Intangible Assets), other intangible assetssuch as of the licenses, concession and computer software acquired by the Group are stated at their acquisition cost less accumulated amortization and impairment losses (see accounting policy 2.12).Expenditure on internally generated goodwill and brands isrecognized in the income statement as an expense as incurred.

(iii) Subsequent expenditureSubsequent expenditure on capitalized intangible assets is capitalized only when it increases the future economic benefitsembodied in the specific asset to which it relates. All otherexpenditure is expensed as incurred.

(iv) AmortizationAmortization is charged to the income statement on a straight-line method over the estimated useful lives of intangible assets unless such lives are indefinite. Goodwill and intangibleassets with an indefinite useful life are systematically testedfor impairment at each balance sheet date. Other intangiblesare amortized from the date they are available for use. Theestimated useful lives are as follows:— Licenses Over the remaining period of the license term— Concession &

computer software 3-15 years

Orascom Telecom Holding S.A.ESignificant Accounting Policies and Notes To the Consolidated Financial Statements As at December 31, 2006


2.8 Investments(i) Investments available for sale

Investments available-for-sale are valued at fair value, with any resultant gain or loss being recognized in equity, exceptfor impairment losses which is recognized in the income statement. When these investments are derecognized, the cumulative gain or loss previously recognized directly in equity is recognized in the income statement.The fair value of investments available for sale, is the quotedbid price at the balance sheet date, investments that are notquoted are valued using valuation techniques.Investments available-for-sale is recognized / derecognizedby the Group on the date it commits to purchase/sell the investments.

(ii) Investments held for tradingInvestments held for trading are stated at cost. And at the end of each financial period investments held for trading aremeasured at the fair value. Changes in the fair value differencesare recognized in the income statement. Investments held for trading include of mutual funds and reverse repurchaseagreements (treasury bills).

(iii) Investments in associatesInvestments in associates are stated at equity method. Underthe equity method the investment in associates is initially recognize at cost and the carrying amount is increased or decreased to recognize the investor’s share of the profit andloss of the associates after the date of acquisition. Dividendsreceived from associates reduce the carrying amount of the investment.Losses of an associate in excess of the Company’s interest in that associate (which includes any long-term interests that,in substance, form part of the Company’s net investment in the associate) are not recognized, unless the Company has incurred legal or constructive obligations or made paymentson behalf of the associate.Any excess of the cost of the acquisition over the Company’sshare of the net faire value of the identifiable assets, liabilitiesand contingent liabilities of the associate recognized at thedate of acquisition is recognized as goodwill. The goodwillis included within the carrying amount of the investment and is assessed for impairment as part of the investment.

2.9 Trade and other receivablesTrade and other receivables are stated at their cost less impairmentlosses (see accounting policy 2.12). An impairment loss for tradereceivables is recognized when there is objective evidence that the Group will not be able to collect all the amounts due accordingto the original terms of the receivable. The amount of the impairment losses are the difference between the carrying amountand the recoverable amount determined on a discounted cash f low basis.

2.10 InventoriesIn line with IAS 2 (Inventories), inventories are stated at the lowerof cost and net realizable value. Cost is based on "weighted average" method. Net realizable value is the estimated selling pricein the ordinary course of business, less the estimated costs of completion and selling expenses.

2.11 Cash and cash equivalentsIn lines with IAS 7 (Cash Flow Statements), cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a componentof cash and cash equivalents for the purpose of the statement ofcash f lows.

2.12 ImpairmentThe carrying value of the Group’s assets other than inventory (see accounting policy 2.10) and deferred tax assets (see accountingpolicy 2.24) are reviewed at each balance sheet date to determine

whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.For goodwill, assets that have indefinite useful life and intangibleassets that are not yet available for use, the recoverable amountis estimated at each balance sheet date.An impairment loss is recognized whenever the carrying amountof an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in the income statement.

Reversal of impairmentAn impairment loss in respect of an investment in an equity instrument classified as available for sale is not reversed throughthe income statement.An impairment loss in respect of goodwill is not reversed.In respect of other assets, an impairment loss is reversed if therehas been a change in the estimates used to determine the recoverable amount.An impairment loss is reversed only to the extent that the asset’scarrying value does not exceed the carrying value that would have been determined, net of depreciation or amortization, if noimpairment loss had been recognized.

2.13 Issued capital(i) Repurchase of share capital

When share capital recognized as equity is repurchased, theamount of the consideration paid, including directly attributable costs, is recognized as a change in equity.Repurchased shares are classified as treasury stock and presented as a deduction from total equity.

(ii) DividendsDividends are recognized as a liability in the year in whichthey are declared.

2.14 Legal reserveAs per the Egyptian Companies Law and the Parent Company'sstatutes, 5% of net profit for the year is set aside to form a legalreserve, the legal reserve can be used to increase the Parent Company share capital or to offset sustained losses. It is permissibleto cease the transfer to the reserve if the reserve amount reaches50% of the paid-up capital. If the reserve falls below that level, the Parent Company is required to resume setting aside the 5%of net profit into the legal reserve.

2.15 Interest-bearing borrowingsInterest-bearing borrowings are recognized initially at fair value less attributable transaction costs. Subsequent to initial recognition,interest-bearing borrowings are stated at amortized cost with anydifference between cost and redemption value being recognizedin the income statement over the period of the borrowings on an effective interest basis.

2.16 Employee benefits(i) Defined contribution plans

In line with IAS 19 (Employee Benefits), contributions to defined contribution pension plans are recognized as an expense in the consolidated income statement when incurred.

(ii) Employees Stock Option Plan (ESOP)The Group has established an ESOP that provides for the granting of stock options to key employees. The stock optionsare exercisable over a period of three years. As options are granted, the Group generally purchases in the market the number of shares that would fall due to be issued on exerciseof the option. Based on IFRS 2 (Share-based Payment) andIAS 19 (Employee Benefits), expenses resulting from the stock options granted are reported in the consolidated incomestatements and initially measured at the grant date based onthe difference between the option price and the market valueof the stock, with periodical adjustments is subsequently made for market price f luctuations.

2.17 ProvisionsIn line with IAS 37 (Provisions, Contingent Liabilities and Contingent Assets), a provision is recognized in the balance sheetwhen the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outf low ofeconomic benefits will be required to settle the obligation. Provisions are reviewed on each balance sheet date and amended(when necessary) to represent the best current estimate.

2.18 Trade and other payablesTrade and other payables are stated at cost.

2.19 RevenueThe Group main business is to operate the GSM mobile networks,provide internet services and retail sales of handsets to its customers.The group revenue recognition polices are as follows:

(i) GSM revenueAirtime usage, interconnection, and roaming revenues are recognized when the service is rendered to the customer based on the actual airtime usage. While the unused call minutes at the end of the year/period are deferred. Monthlyfees are recurring monthly subscription fees, and connectionfees are one-time fees paid for the line or connection. Monthlyand connection fees are recognized in the income statementimmediately when the line is activated.

(ii) Telecommunications services revenueSales revenues, primarily from handset sales, are recognizedin the income statement when the significant risks and rewards of ownership have been transferred to the buyer. Norevenues are recognized if there are significant uncertaintiesregarding recovery of the consideration due, the associatedcosts or the possible return of goods sold.— Construction contracts: revenues from construction

contracts are recognized as soon as the outcome of a construction contract can be estimated reliably. Construction contract revenue is recognized in the incomestatement in proportion to the stage of completion of the contract. The stage of completion is assessed by reference to surveys of work performed. Any expected losson a contract is recognized immediately in the income statement.

— International carrier services: international carrier services revenue, including international traffic revenue, leased lines revenue, international roaming revenue, andother revenue is recognized in the income statement oncethe service is delivered to the client.

— Value-added services (VAS) revenue: VAS revenue is recognized in the income statement once the service is rendered to or used by the customer.

(iii) Internet services and fixed lines revenuesInternet services and fixed lines revenues are recognized inthe income statement once the service is rendered to the client

(iv) Other revenuesInterest income is recognized in the income statement as itaccrues, using the effective interest method. Dividend incomeis recognized in the income statement on the date the entity’sright to receive payments is established.

2.20Operating CostsThe primary operating costs, often referred to as cost of sales, incurred by the Group in connection with the provision of telecommunications services including the dealer commissions,interconnection costs, roaming costs, SIM card cost, scratch cardcost, cost of handsets, recurring license and regulatory fees, leasedlines, IT maintenance and repair, network rental expenses and other direct costs. It also includes related activities that are incidental to the regular operations.

Operating costs are recognized under the accrual basis of accounting

when they occur and there is a direct association between the costs incurred and the earning of specific items of income.

2.21General and administrative expensesThese items include, but are not limited to, wages and salaries, travel expenses and office expenses. These expenses are recognizedon an accrual basis.

2.22Selling expensesThese items include, but not limited to, advertising, marketing and sales promotion expenses. These expenses are recognized onan accrual basis.

2.23Interest expenseIn line with IAS 23 (Borrowing Costs), borrowing costs are recognized as expenses in the income statement when incurred,with the exception of borrowing costs that are directly attributableto the construction, and acquisition of new assets which are capitalized as part of the relevant assets cost and depreciated overthe assets' estimated useful lives. This capitalization ceases oncethe assets are in operating condition and ready for use.

2.24Income TaxIncome tax on the profit or loss for the year comprises currentand deferred tax. Income tax is recognized in the income statementexcept to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.Deferred tax is provided using the balance sheet liability method,providing for temporary differences between the carrying amountsof assets and liabilities for financial reporting purposes and theamounts used for taxation purposes. The amount of deferred taxprovided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, usingtax rates enacted or substantively enacted at the balance sheet date.A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against whichthe asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

2.25Gain (loss) from sale of subsidiariesIn line with IAS 27 (Consolidated and Separate Financial Statements), gain (loss) from sale of subsidiaries is the differencebetween the proceeds from the disposal of the subsidiary and the aggregate carrying amount of the subsidiary assets less liabilitiesand the cumulative translation adjustments as of the date of disposal.

2.26Segment reportingIn line with IAS 14 (Segment Reporting), a segment is a distinguishable component of the Group that is engaged eitherin providing products or services (business segment) or in providingproducts or services within a particular economic environment(geographical segment), which is subject to risks and rewards thatare different from those of other segments. The primary format,business segments, is based on the Group’s management and internal reporting structure.

3- SEGMENT REPORTING

Segment information is presented in respect of the Group’s businessand geographical segments.

Segment results, assets and liabilities include items directly attributableto a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly investments, loans and borrowing and related expenses, corporate assets (primarily the company’s headquarters), and income tax assets and liabilities.


4.1 Pledges on Property and Equipment

4.1.1 Orascom Telecom Tunisia net property and equipment aresubjected to registered debentures to secure Orascom TelecomTunisia loans, Orascom Telecom Holding proportionate rate in Orascom Telecom Tunisia property and equipmentamounting to TND 273 million equivalents to US$ 211 million.

4.1.2 The cost of some property and equipment which belongsto M-Link amounting to US$ 1.072 million is secured by first hypothecation charge.

4.1.3 The cost of some property and equipment which belongsto Med-Cable amounting to Euro 8.034 million equivalentsto US$ 15.877 million are secured by first hypothecation charge.

4.2 Capitalized Borrowing CostsBased on IAS 23 (Borrowing Costs) the following subsidiariescapitalized part of their borrowing costs as follows:

4.2.1 The Egyptian Company for Mobile Services (Joint VenturesCompany) capitalizes borrowing costs related to the

acquisition of property and equipment, the group’s proportionate share from the capitalization during the financial year ended December 31, 2006 is L.E 38.9 millionequivalents to US$ 6.79 million included in property andequipment.

4.2.2 International Wireless Communication Pakistan (SubsidiaryCompany) capitalized borrowing costs related to the acquisition of property and equipment during the financialyear ended December 31, 2006 amounted to PKR 1,570 million equivalents to US$ 26.2 million.

4.2.3 Orascom Telecom Ventures capitalized borrowing costs related to the acquisition of property and equipment duringthe financial year ended December 31, 2006 amounted toTAKA 101.15 million equivalents to US$ 1.46 million.

4.3 Leased plant and equipmentsThe Group leases buildings, telecommunication equipmentand vehicles under a number of finance lease agreements.At 31 December 2006 the net carrying amount of leased plant and machinery was US$ 11.19 million.

3.2 Secondary Reporting Format—Geographical segmentsGSM telecommunication services revenues and internet services revenuesare managed on world wide basis, but operate in three principal geographical areas, North Africa, Middle East and South Asia. In presenting information on the basis of geographical segments, segmentrevenue is based on the geographical location of operation. Segment assets are based on the geographical location of the assets. The group'soperations are reported under geographical segments, ref lecting their respective size of operation, they are as follows:

North Africa: Comprising Algeria and Tunisia,Middle East: Comprising Egypt and Iraq,South Asia: Comprising Pakistan and Bangladesh,Others: Comprising British Virgin Islands (BVI), Malta and other

countries not included above.

The revenue analysis in the tables below are based on the location ofthe operating company, which is the same as the location of the majorcustomers and the location of the operating companies:

Year ended December 31, 2006Geographical segments

North Africa Middle East South Asia Others Unallocated Total(Thousand US$)

Total revenues 1,758,920 1,416,013 1,113,885 135,470 — 4,424,288Segment assets 3,261,739 1,279,885 2,361,508 168,836 1,603,425 8,675,393

Year ended December 31, 2006Business segments

Telecom Internet & EliminationGSM(*) service(**) fixed lines service(***) Total

Thousand US$Total revenue from external customers 3,883,830 504,606 35,852 — 4,424,288Inter-segment revenue 62,776 325,956 — (388,862) —Total revenue 3,946,606 830,562 35,852 (388,862) 4,424,288Gross profit 2,101,096 36,790 21,280 — 2,159,166Other income 29,494Selling, general and administrative expenses (682,161)Remunerations and allowances for board members (5,626)Provisions (19,251)Allowances (30,770)Capital loss (3,804)Impairment of assets (5,084)Depreciation and amortization of assets (73,572)Net financing costs (384,607)Share of results of associated companies (16,912)Gain from sale of subsidiaries 4,859Income tax (183,719)Net profit for the year 788,013

Telecom. Internet& Unallocated assets/GSM service fixed lines Service liabilities Total

(Thousand US$)

Segment assets 6,590,462 352,843 128,663 — 7,071,968Unallocated assets — — — 1,603,425 1,603,425Total assets 6,590,462 352,843 128,663 1,603,425 8,675,393

Segment liabilities 1,515,809 128,987 76,539 — 1,721,335Unallocated liabilities — — — 4,765,537 4,765,537Total liabilities 1,515,809 128,987 76,539 4,765,537 6,486,872

4- PROPERTY AND EQUIPMENTProperty and equipment comprise:

Land Buildings Cell Sites Tools Computers Furniture & Vehicles Leasehold Total

Equipment Fixtures improvements

& renovation

US$ US$ US$ US$ US$ US$ US$ US$ US$

Cost

As at 1/1/2006 3 813 896 41 918 670 2 879 359 274 8 167 279 91 946 962 26 950 911 15 846 168 30 543 950 3 098 547 110

Additions during the year 1 434 435 20 252 608 1 304 498 778 2 927 161 35 484 849 15 072 388 12 825 139 22 570 353 1 415 065 711

Addition coming from new incoming companies 96 598 13 323 283 937 — 272 302 342 875 156 173 — 1 165 208

Addition coming from changes in proportionate companies 20 523 892 161 16 059 417 — 1 098 190 241 519 62 041 258 955 18 632 806

Disposals during the year — (31 017) (6 060 398) (2 607 609) (241 282) (468 171) (2 280 834) (231 108) (11 920 419)

Deconsolidation of subsidiaries (1 028 019) — (222 870) (112 700) (67 012) (85 866) (37 173) (40 555) (1 594 195)

Cumulative translation adjustments 33 279 906 737 18 861 554 537 810 719 072 39 041 225 355 417 060 21 739 908

Balance as at 31/12/2006 4 370 712 63 952 482 4 212 779 692 8 911 941 129 213 081 42 092 697 26 796 869 53 518 655 4 541 636 129

Accumulated Depreciation

As at 1/1/2006 — 2 261 298 647 972 935 4 008 721 48 276 739 12 111 919 7 309 817 14 441 172 736 382 601

Depreciation for the year — 1 589 670 425 338 761 1 394 334 22 180 056 5 951 099 3 974 321 8 547 130 468 975 371

Addition coming from new incoming companies — 666 212 219 — 164 574 97 016 39 678 — 514 153

Addition coming from changes in proportionate companies — 17 986 8 796 997 — 871 687 149 506 37 338 249 653 10 123 167

Accumulated depreciation of disposals — (3 984) (1 431 511) (1 845 779) (154 707) (252 232) (1 624 753) (72 102) (5 385 068 )

Deconsolidation of subsidiaries — — (125 839) ( 14 142) (49 482) (53 897) (36 996) (29 409) (309 765)

Cumulative translation adjustments — 122 287 8 188 416 64 569 322 903 84 294 123 312 189 544 9 095 325

Balance as at 31/12/2006 — 3 987 923 1 088 951 978 3 607 703 71 611 770 18 087 705 9 822 717 23 325 988 1 219 395 784



3.1 Primary Reporting Format – Business SegmentsThe revenue analyses in the tables below are based on the type of business activities and services that are distinguishable component.

(*) The GSM revenue comes mainly from the following companies:— Carthage Consortium Co. including Orascom Telecom Tunisia.— Orascom Tunisia Holding Co. including Orascom Telecom Tunisia.— Egyptian Company for Mobile Services.— International Wireless Communication Pakistan Ltd. including Pakistan Mobile Communication Ltd.— Orascom Iraq Holding Co. including Orascom Telecom Iraq & Iraqna.— Orascom Telecom Algeria Co.— Orascom Telecom Ventures Co. including Sheba Telecom.

(**) The Telecommunication Services revenue comes mainly from the following companies:— Ring Distribution Co.— Orasinvest Holding Co.

(***)The Internet and Fixed line services revenue comes mainly from the following companies:— Consortium Algerian Telecommunication.— In Touch for Telecommunication.


5- PROPERTY AND EQUIPMENT UNDER CONSTRUCTIONProperty and equipment under construction comprise:

December 31, December 31,2006 2005(US$) (US$)

Orascom Telecom Holding Company — 5,138,512Egyptian Company for Mobile Services (*) 92,349,883 64,536,401Orascom Telecom Algeria Company 271,412,768 202,906,885Consortium Algerian Telecommunication 1,743,502 5,044,958InTouch for Telecommunication Company 1,844,667 236,141Ring for Distribution Company 1,197,575 1,443,305International WirelessCommunication Pakistan limited (**) 272,626,023 237,896,544Orascom Iraq Holding Company 27,857,187 18,957,815Orascom Telecom Tunisie Company 16,166,731 12,770,129Orascom Telecom Ventures Company (***) 32,381,991 7,759,135Med cable 961,469 —Other companies 350,676 8,519

718,892,473 556,698,344

Based on IAS 23 (Borrowing Costs), the following subsidiaries capitalized part of their borrowing cost as follows:

(*) The Egyptian Company for Mobile Services (Joint Ventures Company) capitalized the borrowing costs related to establishment of an asset, the Group’s proportionate share of the capitalization during the financial year ended December 31, 2006 is L.E 28.74 million equivalent to US$ 5.01 million.

(**) International Wireless Communication (Subsidiary Company) Pakistan Ltd capitalized the borrowing costs related to establishment of an asset during the financial year ended December 31, 2006 amounted to PKR 150.33 million equivalents to US $ 2.5 million.

(***) Orascom Telecom Ventures (Subsidiary Company) capitalized the borrowing costs related to establishment of an asset during the financial year ended December 31, 2006 amounted to TAKA 40.84 million equivalents to US$ 584 K.

6- LICENSES AND SOFTWARELicenses and software comprise:

Licenses fees Concession and Totalcomputer software

US$ US$ US$

CostBalance at 1/1/2006 1,354,266,694 94,055,753 1,448,322,447Addition during the year 200,924 34,708,459 34,909,383Addition coming from changes in proportionate companies 7,371,708 — 7,371,708Disposals during the year — (244,695) (244,695)Cumulative translation adjustments 36,756,810 2,218,639 38,975,449Balance at 31/12/2006 1,398,596,136 130,738,156 1,529,334,292

AmortizationBalance at 1/1/2006 368,761,495 51,156,162 419,917,658Amortized during the year 97,231,696 22,152,167 119,383,863Addition coming from changes in proportionate companies 2,956,707 299,639 3,256,346Accumulated amortization of disposal — (244,695) (244,695)Cumulative translation adjustment 10,498,011 1,118,356 11,616,367Balance at 31/12/2006 479,447,909 74,481,629 553,929,539Net book value at 31/12/2006 919,148,227 56,256,527 975,404,754Net book value at 31/12/2005 985,505,198 42,899,591 1,028,404,789

6.1 Leased concessionThe Group leases “International Bandwidth” right of use under a number of finance lease agreements. At 31 December 2006 the net carrying amountof leased assets was US$ 5.91million.

7- GOODWILLGoodwill represents amounts arising on acquisition of subsidiaries, associates and joint ventures. Goodwill represents the difference betweenthe cost of the acquisition and the group’s share in the fair value of the underlying assets and liabilities of the acquired business.

Goodwill comprises the goodwill (assets) recognized at the Parent Company and the subsidiary levels, at the year end the movements areas follows:

December 31,2006

Cost (US$)

At the beginning of the year 612,290,763Acquisitions through business combination 870,812Acquisition of minority interest 219,442,466Disposal (333,967)Cumulative translation adjustments 2,869,583At the ending of the year 835,139,656ImpairmentAt the beginning of the year 116,201,629Impairment losses recognized in the yearDerecognizing on disposal of subsidiary 3,521Cumulative translation adjustment 45,232At the ending of the year 116,250,382Net book value at December 31, 2006 718,889,274Net book value at December 31, 2005 496,089,134

At the year end the balances are as follows:

Net as at Net as atDecember 31, December 31,

2006 2005(US$) (US$)

Goodwill at the Parent Company’s levelMobinil for Telecommunications 53,624,889 53,419,894Egyptian Company for Mobile Services 64,986,026 24,856,436Pakistan Mobile Communication Ltd. 18,097,773 18,028,589Telecel International Limited 15,301,955 15,121,201InTouch for Telecommunication 8,401,764 2,154,961Pharaoh Telecommunication — 338,460Orascom Tunisia Holding Ltd. 17,908,708 17,840,247Carthage Consortium 16,460,900 16,397,974Orascom Telecom Algeria 510,124,553 335,604,324Trans World Associate 874,117 —

Goodwill at the subsidiaries’ levelMobinil for Telecommunications in ECMS 157,647 157,045InTouch in Link Dot Net 884,874 1,184,668OTV in Sheba Telecom (Banglalink) 10,675,849 10,675,849Orasinvest Holding in subsidiaries 311,050 309,486Arpu For Communication Services Co. 797,527 —International Wireless CommunicationPakistan Ltd 281,642 —

718,889,274 496,089,134

8- INVESTMENTSInvestments comprise:

Percentage December Decemberof Ownership 31,2006 31,2005

(US$) (US$)

8.1 Investments available for saleSmart village (ECDMIV) 10.19% 4,190,790 1,781,060Top Level Domain 5% 1,037,660 —Orascom Telecom Internet Algeria 3,473,214 —Other investments (owned by OTH subsidiaries) 649,581 5,902,967Total investment available for sale 9,351,245 7,684,027

8.2 Investments in associatesHutchisonTelecommunications International (*) 19.26%Share of the fair value of net assets (net of tax) 652,168,168 652,168,168Goodwill arising at date of acquisition 650,088,081 650,088,081Amortization of intangible assets (net of tax) (21,317,908) —Share of profit for the year 4,982,862 —Company share of items recognizedin associate’s equity (7,181,184) —Loss from change in ownership percentage (**) (576,823) —Total investments in associate 1,278,163,196 1,302,256,249Total investments 1,287,514,441 1,309,940,276

(*) In December 2005, Orascom Telecom Holding (OTH) established Orascom Telecom Eurasia - Malta. (OTE) – a wholly owned subsidiary –to acquire 19.3% of Hutchison Telecommunications International Ltd. (HTIL) (“investee”). OTH accounts for its investment in HTIL using the equity method on the basis that it has significant inf luence over the investee.

— HTIL shares are pledged as security for US$ 2.5 billion syndicationloan (note 16).

— Although the Company holds less than 20% of the equity sharesof Hutchison Telecommunications International Ltd. HTIL, andit has less than 20% of the voting power in shareholder meetings,the Company exercises significant inf luence by virtue of its contractual right to appoint two directors to the board of directorsof that Company.

(**) During 2006 HTIL had issued 13.4 million shares as a result of exercisinga “Share Option Scheme” granted to its employees. Accordingly, OTHshare was decreased from 19.3 % to 19.26%.

Summarized financial information in respect of the Company’s associateis set out below:

December 31, December 31,2006 2005

Millions US$

Total assets 10,246 7,689Total liabilities (7,365) (5,131)Net assets 2,881 2,558The company’s share of associate net assets 555 494Total revenues 4,290 3,143Total expenses (4,264) (3,161)Net profit (loss) for the year 26 (18)The company’s share of the associate net profit 4.98 —Faire value of the Investment 2,345 1,321

9- PAYMENTS FOR INVESTMENTSPayments for investments comprise:


Trans World Associates — 3,396,444Top Level Domain — 1,033,693In Touch for Telecommunication 2,823,544 —Paid by OTH subsidiaries 2,115,864 —

4,939,408 4,430,137


10- OTHER ASSETSOther assets comprise:

Note December 31, December 31,No. 2006 2005

(US$) (US$)

Restricted cash at bank -long term(*) 377,534 98,449,827Deposits with others-long term 3,375,063 15,152,440Derivative financialinstruments assets (2.5/21) 15,550,241 —

19,302,838 113,602,267

(*) Restricted as collateral for loans and letters of guarantee.

11- OTHER CURRENT ASSETSOther current assets comprise:


(US$) (US$)

Advance payments to suppliers 51,778,077 50,570,995Accrued revenues 108,261,305 74,189,726Deposit with others 5,489,799 5,320,595Withholding taxes 78,124,925 62,888,104Restricted cash at banks 86,640,034 7,301,670Derivative financialinstruments assets (2.5/21) 5,618,719 1,428,448Other debit balances (net) 27,519,372 17,087,733

363,432,231 218,787,271

12- CASH AND CASH EQUIVALENTSBased on IAS 7 (Cash flow statements), cash and cash equivalents comprise:


Cash on hand 4,356,185 9,195,410Current accounts at banks andchecks under collection 517,801,159 233,539,662Treasury Bills under REPO agreement 8,370,164 1,784,481Cash margin—Letters of Guarantee — 4,436,999Short-term deposits 225,670,220 37,933,956

756,197,728 286,890,508

13- AUTHORIZED AND ISSUED CAPITALThe Parent Company’s authorized share capital is LE 2.5 billion represented in 250 million shares of a nominal value of LE 10 each. The issued and paid in share capital is LE 1.1 billion (equivalent to US$318,923,826) represented in 110 million shares of a nominal value LE 10 each (1 Share = 2 GDRs).

On January 22, 2006 the resolution of the extraordinary general assembly

in its meeting held on first November 2005 became effective, that changed the nominal value for the share from LE 10 each to LE 5, therefore the issued and paid in share capital represented in 220 millionshares (1 Share=1GDR).

14- TREASURY STOCK AND OTHER RESERVES

A. Treasury stockNote Amount in Number ofNo. (US$) shares

Treasury stock 110,929,489 2,000,000 GDREmployees Stock OptionPlan—Treasury stock (27) 20,540,894 848,098 GDR

131,470,383

Fair market value for these treasury stock amounted to US$ 187,974,468 as atDecember 31, 2006.

B. Other reservesOther reserves comprise:


(US$) (US$)Surplus from selling treasurystock in 2003 3,118,561 3,118,561Fair value for investment(available for sale) 1,769,141 3,993,692Cash f low hedge(loss) gain (net) (*) (21.1) (744,993) 69,658Company share in itemrecognized in equity (8.2) (7,181,184) —Employee stock option plan 44,824,017 27,336,972Foreign exchange recognizeddirectly in equity 3,875,760 —

45,661,302 34,518,883

(*) Cash flow hedge gain was recorded net of tax, (the deferred tax expenseamounted to US$ 186,249).

15- FINANCIAL LEASE LIABILITIES

Minimum Interest Principallease payments December 31,

2006(US$) (US$) (US$)

Less than one year 3,350,210 881,422 4,231,632 (*)Between one and five years 3,842,917 994,818 4,837,735 (**)

7,193,127 1,876,240 9,069,367

(*) This amount is included in trade and other payable.(**) The amount is included in creditors-long term.

16- Borrowings

Borrower Lending Interest Rate Short term Long term Outstanding Currency Debt Collateral GivenInstitution borrowings borrowings amounts

31/12/2006 31/12/2006 31/12/2006US$ US$ US$

* The facility is secured by:Orascom Telecom Holding A.Group of Egyptian

and foreign banks 162,128,123 2,274,173,840 2,436,301,963 * Pledge all the company shares in HTIL, OTI,Orascom Tunisia Holding,

(Tranche A-1) Libor +2.75% US$ 1 687 453 498 Carthage Consortium, and 16.6% of ECMS shares(Tranche A-2) Libor +2.75% US$ 452 380 953(Tranche B ) 2.5% + discount rate of Central bank of Egypt LE 700 000 000

B. Fortis bank 6.3% € 20 310 064Libor +2.75% US$ 238 095 238

Moga Holding Company Mezzanine Euribor + 1.5% — 23,105,250 23,105,250 € 17 500 000

Orascom Telecom Tunisia Group of banks 2.998%+ Euribor 21,357,454 191,261,275 212,618,729 € 100 000 000 * A pledge on Orascom Telecom Tunisia equipments and a pledge of 1 650 496 Orascom

(Orascom Tunisia Holding 2%+ TMM TND 104 740 000 Telecom Tunisia shares owned by Orascom Tunisia Carthage Consortium Ltd.) Holding and Carthege Consortium.

The Egyptian Company for Mobile Services Group of banks (50% of the loan 11.5% ) + 40,503,817 145,863,116 186,366,933 LE 848 070 000(Mobinil for Telecommunication Co.) (The other 50% 1.4%over the discount

rate of Central Bank of Egypt)Bonds 12.25% LE 160 191 000Banque Misr 10.5% including highest over drawn

balance commission LE 58 893 750BNP Paribas 10% + 0.05% including highest over

drawn balance commission LE 33 451 650Barclays Bank 9.85% including highest over drawn

balance commission LE 36 985 746International Wireless CommunicationPakistan Ltd Group of banks T-Bill rate + 2.5% - 5.5% 211,146,883 718,631,383 929,778,266 PKR 1 075 000 000 * Secured by Motorola Inc. corporate guarantee.

Kibor + 2.75% PKR 3 030 000 000 * Secured by the company's present and future assets.KIBOR +1.5% & SBP + 95 BPs PKR 1 200 000 000 * A pledge on the fixed assets of PMCL.

* Negative pledge under taking in respect of theKIBOR +1% - 3.5% PKR 1 500 000 000 company's assetsKIBOR + 2.25% PKR 1 740 000 000 * Restrictions on financial indebtednessKIBOR + 2.625% PKR 1 000 000 000 * Limitations on the granting of loans and guaranteesKIBOR + 2.625% PKR 6 040 000 000 * Restrictions on the payment of dividendsKIBOR + 2.625% PKR 2 500 000 000 * Limitations on disposals of assetsKIBOR + 2.625% PKR 1 000 000 000 * Restrictions on mergers or reconstructionsLibor +0.4% US$ 47 995 212 * Limitation on permitted acquisition of assetsEuribor +2.5% € 10 000 000 * Restrictions on investmentsEuribor +0.78% € 46 078 411Euribor +0.8% € 96 001 033Kibor +1% US$ 42 500 000

Bonds T-Bill rate + 2.25% -min 6% PKR 2 500 000 000Bonds KIBOR +1.6% min of 4.95% PKR 2 000 000 000Bonds KIBOR +2.85% PKR 3 261 640 000

KIBOR +1.35% min of 3.5% p.a. PKR 800 000 000Kibor + 1.75 % PKR 500 000 000Kibor + 2.5 % PKR 600 000 000Kibor + 1.25 % PKR 800 000 000Kibor + 6 bps. PKR 750 000 000Libor + 1.5 % US$ 9 000 000Libor + 1.2 % PKR 222 000 0008.625% US$ 250 000 000

Orascom Telecom Algeria COFACE Euribor +1.6% 114,641,889 259,541,905 374,183,794 € 189 676 322 * Pledge on Orascom Telecom Algeria business undertakingHERMES Euribor +1.75% € 92 000 000 * Pledge on Orascom Telecom Algeria bank accounts.CDC Euribor +4.25% € 797 253 * Financial commitments to meet certain financial targets

related to debt to equity ratio,DEG Euribor + 2% € 8 969 100 annual revenues, EBITDA and debt service coverage.Proparco Euribor + 2% € 11 958 800 * Other commitments covering new investments, capital

structure changes, new borrowing and fixed assets2.35%+BOA Discounted rate DZD 3 987 500 000 disposals.

COFACE Libor +0.6% US$ 137 502 108 * 158 Promissory note to secure the principle amount of the loans and the corresponding

HERMES Libor +0.6% US$ 85 870 893 interests due up to maturity date to the lenders.

Intouch company Cairo Barclays Bank 12% 3,576,125 1,720,696 5,296,821 LE 29 864 748 * Part of Intouch, Link Egypt and LinkDotNet Revenues* Guarantee from Orascom Telecom Holding not to reduce it's share in Intouch capital than 51%

M-Link Company Fortis Bank 212,574 744,008 956,582 € 1 369 612 * A pledge of M- Link Teleport buildings.

Med Cable Calyon Bank Euribor +0.95% 3,858,011 13,064,813 16,922,824 € 12 156 638 * Guaranteed by Orascom Telecom HoldingEuribor +3.5% € 4 000 000

Sheba telecom Group of Suppliers &financial institution 12% 45,581,127 — 45,581,127 TAKA 2 010 000 000 * Promissory note + US$ 30 M letter of credit

US$ 11 000 000 * Line of USD current account11% TAKA 980 000 000 * Promissory note

Trance World Associates Group of Suppliers &financial institution Kibor + 3 % 4,671,692 21,022,612 25,694,304 PKR 1 400 000 000 * Secured by the company's present and future assets.

Kibor + 3 % PKR 207 500 000 * Secured by the company's present and future assets.

Ring Distribution 631,917 11,260 643,177

Orasinvest Holding Group of Banks 12.5% min. 11.5% 509,090 — 509,090 LE 17 000 000 * Dividends distribution should not exceed 70% of Mobiserve (subsidiary) year's income

8% min. 7.5% DZD 90 000 000 * Total shareholders' funds retained in Mobiserve (subsidiary) must not be less than L.E. 10 million

Total borrowings 608,818,702 3,649,140,158 4,257,958,860Net issuance cost — (68,904,240) (68,904,240)Net borrowings 608,818,702 3,580,235,918 4,189,054,620


16.1 On February 27, 2006 and May 25, 2006 the company signed loanand facility agreement with a total amount of US$ 2.5 billion withsyndication of foreign & egyptian banks.The Company utilized US$ 1,187 million to pay the unpaid portion of the 19.3% of Hutchison Telecommunication International to Orascom TelecomEurasia limited - OTEL (100% owned subsidiary) while the remainingof the loan was utilized to repay the Company's existing indebtednessfrom loans, bonds and to finance it's operations. Accordingly Orascom Telecom Holding recharged OTEL's current account with its portion of the related borrowing costs. As of December 31, 2006 the recharged borrowing costs amounted to US$ 80 million.

16.2 IWCPL has recently signed, but not drawn upon, three new ECAII facilities and two new DFI facilities which provide for aggregateborrowings of US$ 400 million. These facilities are available for the next 18 to 24 months and are use-specific for purchase of network equipments.

17- CREDITORS LONG-TERMCreditors long-term comprise:


Due to shareholders(Mr. Naguib Sawiris) 1,300,000 1,300,000Sundry creditors 46,184,595 119,525,917

47,484,595 120,825,917

18- DEBT DUE ON PURCHASE OF INVESTMENTSDebt due on purchase of investments comprise:


Hutchison Telecommunications Internationalshareholders — 1,172,030,624Sheba Telecom –Banglalink (*) 10,000,000 10,000,000Minority interest in OTA & OTT (**) 48,653,726 49,766,355Minority interest in OTI — 10,500,000Others — 230,000

58,653,726 1,242,526,979

(*) The amount represents the unpaid portion of Orascom Telecom Venturesinvestment in Sheba Telecom – Banglalink that it will be paid after theseller fulfillment of certain conditions.

(**) This represents the amounts due to Oratel International shareholders (shareholder in OTA), Carthage Consortium Ltd. and Orascom TunisiaHolding shareholders (shareholders in OTT) to purchase additional stake in Orascom Telecom Algeria OTA and Orascom Telecom TunisiaOTT during 2005.

19- OTHER CURRENT PAYABLESOther current payables comprise:


(US$) (US$)

Deferred revenues 188,787,804 156,047,606Deposit from others 7,688,816 14,613,588Contingent provisions (2.17/26) 63,782,018 72,414,022Taxes 260,377,628 167,582,105Derivative financialinstrument liabilities (2.5/21) 1,653,139 —Other credit balances 47,982,866 41,606,095

570,272,271 452,263,416

20- PUT OPTION LIABILITIESOrascom Telecom holding signed put and call option agreement as ofDecember 31, 2006.The fair values of these options are as follows:


(US$) (US$)

EIIC Put option (20.1) — 299,798,607Intel Put option (20.2) 648,000 —CDC Fennec Put option (20.3) — —

648,000 299,798,607

20.1Orascom Telecom Holding has exercised the Put Option Plan andsigned a Sale and Purchase Agreement as of October 26, 2006, topurchase from EIIC its stake in Orascom Telecom Algeria for anamount of US$399 million which is equivelant to 7.91%.

20.2On May 19, 2006, as part of the agreement between OTH and Intel Capital Cooperation to establish Orascom Telecom WimaxLtd-OTWL, OTH granted Intel Capital Corporation the following options:

a- Put option,Intel has the right to require OTH to buy all its shares in OTWL on the occurrence of non compliance conditions orduring or after the fourth anniversary from the date of the agreement. As of December 31, 2006the Company’s managementhas estimated the fair value of this option at US$ 648 K.

b- Commitment to sell non financial item.Intel has the right but not the obligation to purchase the wireless spectrum license in certain rollout countries, where such rollout was not completed, at the same price as paid byOTWL. As of December 31, 2006 the company’s managementis of the opinion that this option has zero value.

20.3CDC Fennec Ltd, one of the lending institutions of Orascom Telecom Algeria, has the option to convert into shares in OrascomTelecom Holding with all the amounts payable and liabilities dueat any time within the 2 years subsequent to December 18, 2003or until all amounts due are fully paid.

As of December 31, 2006 the company’s management is of the opinion that this option has zero value.

21- DERIVATIVE FINANCIAL INSTRUMENT PAYABLEThe group concluded Hedge agreements in order to hedge interest rateand foreign currency exposure. Outstanding agreements as at December31, 2006 were as follows:

21.1 Orascom Telecom Holding1- Zero premium agreements – (cash flow hedge)

A- The Company has signed interest rate SWAP agreements to hedge the Libor interest rate fluctuations from Syndicationloan- Term A (see note 16) with Credit Suisse bank as follows:

Notional amount(at trade date) Interest rates SWAP End of agreements

US$ Floor Cap1,113,719,308 4.07% 6% February, 2009

The loss from the valuations of these contracts as at December31, 2006 is US$ 666,069and represented in the Shareholders’Equity (other reserves), (see note 14.B), after deducting deferredincome tax by US$ 133,214 and in current liabilities (derivativefinancial instrument liability).

B- To hedge the LIBOR interest rate f luctuations from the Syndication loan (Term A2) (note 16.1) the Company enteredinto a Hedge Agreement with ABN AMRO Bank on the following terms:

Notional amount(at trade date) Interest rates SWAP End of agreements

US$ Fixed rate100,000,000(*) 5.586% February, 2009200,000,000(**) 4.8875% February, 2009

(*) The loss from the valuation of this agreement as of December 31, 2006is US$ 987,070 and represented in the Shareholders’ Equity (other reserves), (see note 14.B), after deducting deferred income tax amountedto US$ 197,414 and in current liabilities (derivative financial instrumentliabilities).

(**) The gain from the valuation of this agreement as of December 31, 2006is US$ 721,897 and represented in the Shareholders’ Equity (other reserves), (see note 14.B), after deducting deferred income tax amountedto US$ 144,379 and in current assets (derivative financial instrument assets).

2- Call spread agreement – (Fair value hedge)To hedge currency exposure between Euros and Dollars arisingfrom Orascom Telecom Algeria loans with banks as follows:

Notional amount Premium Rate End of(at trade date) €/$ Agreements

€ US$ Lower UpperCitigroup 74,435,000 1,598,000 1.37 1.45 May, 2009Calyon Bank 74,435,000 1,858,000 (*) 1.37 1.45 May, 2009

148,870,000 3,456,000

On April 6, 2005 (trade date) the contracts premium value was reportedas current assets (derivative financial instrument assets). As of December31, 2006 the fair value of the contracts amounted to US$ 1,223,975 incurrent assets (derivative financial instrument assets). The changes in fair value recognized in the income statement within the foreign exchangedifferences (see note 23).

(*) To be paid in 4 annual installments starting from April, 2006. As of December 31, 2006 the long term installments with an amount US$950,605were reported as long term liabilities while the short term installmentswere reported as current liabilities within the other current payables.

21.2 Pakistan Mobile Communication Ltd. – (Fair value hedge)Pakistan Mobile Communication Ltd. concluded forward rate agreements to hedge the changes in the foreign currency exchangerate arising from the US$ /Euro loan in order to fix the cash flowsin PKR at each debt principle repayment and debt interest payment dates.The agreements were made with the following banks:

Banks Notional amount Currency Interest End of

(at trade date) rates SWAP agreements

Fixed rate

Citigroup 37,710,524 US$ KIBOR+1.25% February, 2012

and ABN 10,000,000 EURO KIBOR+1.25% December, 2011

AMRO bank 101,442,387 EURO KIBOR+1.25% December, 2011

34,558,807 EURO KIBOR+1.25% March, 2011

Standard Chartered

bank and Deutche bank 164,739,394 US$ KIBOR+4.49% November, 2013

The gain from the valuations of these agreements as of December31, 2006, is PKR 1 166 589 335 equivalent to US$ 19,223,089. Thelong term portion amounted to US$ 15,550,242 were reported inother assets (derivative financial instrument assets), while the shortterm portion amounted to US$ 3,672,847 were reported in currentassets (derivative financial instrument assets). The changes in fairvalue recognized in the income statement within the foreign exchange differences (see note 23).

22- Related parties transactionsBased on IAS 24 (Related Party Disclosure), the following are the significant related parties' transactions in the major subsidiaries of theGroup and nature of the relevant transactions:

Nature of Decembertransactions 31, 2006

(US$)a- Orascom Telecom Holding TransactionsWeather Group Finance 3,946,384Mr. Naguib Sawiris Remunerations 1,805,887Wind Services 11,819,977

b- Pakistan Mobile Communication Ltd.Saif Telecom Limited Management fees 13,864,663Orascom Construction Industries Construction 18,016,495Conserve (Private) Limited Construction 16,322,772Employees' Provident Fund Trust Finance 2,098,116

c- Consortium Algerian TelecommunicationsTelecom Egypt Fixed assets supplies 11,996,006

d- Egyptian Company for Mobile ServicesOrange Management fees 4,647,031Orascom Technology system Maintenance & 2,473,625

Computer supplies Orascom Construction Industries Construction 5,589,022Orascom Trading Maintenance & Construction 7,329,584International Integrated Systems (IIS) Computer supplies 2,332,813MultiMedia Mega Stores (MMMS) Computer & hand set supplies 1,008,663Equant Egypt Computer supplies 1,000,620France Telecom Technical support 912,447Solution plus Technical support 1,401,269

23- NET FINANCING COSTSNet financing costs comprise:

Note December 31, December 31, No. 2006 2005

(US$) (US$)Interest income (2.19.iv) 24,394,589 10,975,680Interest expenses (2.23) (332,043,391) (138,905,735)Amortization of loan (31,601,987) (9,855,698)arrangement feesForeign exchange (loss) gain (2.4) (45,355,892) 56,418,728

(384,606,682) (81,367,025)


29- CONTINGENT LIABILITIESThe contingent liabilities as at December 31, 2006 are represented in the following:

29.1The company has initiated arbitration against the government ofrepublic of Chad in the International Chamber of Commerce, toindemnify approximately Euro 40 millions financial claims in ChadMobile (suspended company).

29.2 Jordan Tax claims for JD 61.8 million income tax initiated by theJordanian Tax Authority in connection with the sale of Fastlink (Jordan Mobile Telecommunication Services) in 2002 to MTC byPioneer Investment Ltd a wholly owned subsidiary of OTH.Pioneer Co. has claimed that the tax payments are unfounded atpresent OTH is not a position to asses the case status.

29.3Subsidiaries’ contingent liabilities— Pakistan Mobile Communication Ltd. (PMCL) the subsidiary

of International Wireless Communications Pakistan Ltd (IWCPL)has certain cases are pending in different courts of law. The management of the company is confident that these cases willbe decided in favor of the company.

— The licenses issued by the Bangladeshi government to all mobilephone operators require the government to be paid a license fees and royalty of TK 1 100 per set per year. On 18 June 2006the Bangladesh district court of Dhaka has omitted the relatedclauses of fees, royalty and charges of said License with effect from 1 July 2005. The government is currently in legal disputewith all mobile phone operators as to whether License and Royalty fee up to 1 July 2005 should be borne by the operatorsor by the subscribers.

— A company registered on 4 April 2005 in the name of BanglaLink Ltd, filed a suit against Sheba Telecom (PVT) Ltd.for payment of TK 58.92 million equivalent to US$ 852 K million.The application for temporary injunction against the use of thetrade mark has been rejected in the district court of Dhaka, Bangladesh and the said suit in now pending for final hearingand disposal.

— Vocalone Company for telecommunications and internet servicesfiled a suit against Orascom Telecom Algeria considering thatthe denomination "ALLO" had been previously registered by Vocalone to the National Institute for Intellectual Property. Vocalone asked for the designation of an independent export in order to asses “Allo OTA” net income since 2004 and to evaluate its related financial claims. Court decision rended onJuly 25, 2006 in OTA’S favour.

— ECMS is a party in a number of legal cases, which resulted fromcarrying out its activities. Based on the legal advice obtained, the company’s management believes that the outcome of this

law suit–individually or in aggregate – would not be material toECMS results.

— ARPT has issued in August 2005 decisions concerning the ratesto be used by Algeria Telecom (AT) and OTA for interconnection,colocalisation, OTA has contested these decisions and introduceda case at “conseil d’ Etat”.All the adjustments concerning the colocalisation sites have been made in the accounts as of December 2006. These adjustments took into account the results of the inventory madejointly by OTA and AT.

— TWA has filed applications for issuance of exemption certificateof the income tax on payments made to Tyco Telecommunicationsand David Ross, USA, on the ground that the income of the non-resident persons is not taxable in Pakistan. Article III of the treaty for avoidance of double taxation between Pakistan and U.S.A fortifies the company’s stance, the company legal advisors have confirmed the company status in this case, however,no final order has been passed.

— International Chamber of Commerce Arbitration initiated by OTH’s wholly owned affiliates holding ownership in OTH’s Tunisian mobile operation against Kuwaiti Operator, WataniyaTelecom (WT.), regarding the material breach of the shareholdersagreement in OTH’s Tunisian mobile operation.

— Med Cable entered into an agreement, with the Marseille PortAuthorities for the use of the port in connection with activitiesof the company. As part of the agreement, the Company has to make good the land they use within a period of 30 years. Under IAS 37, no provision has been made for this legal obligation as an estimate of the likely costs cannot be reliable made.

— The Company’s proportionate share in the Egyptian Companyfor Mobile Services (ECMS) contingent liabilities is L.E 8.01 million equivalent to US$ 1.4 million which represents the uncovered amount of the letters of guarantee issued for the benefit of third parties.

— Ring Egypt for distribution and subsidiaries contingent liabilitiesrepresented in Letters of Guarantee equivalent to US$ 7.63 million.

— Guarantees issued by banks on behalf of the company amountedto PKR 390.44 million equivalents to US$ 6.4 million.

30- CAPITAL COMMITMENTS— The Company’s proportionate share in the Egyptian Company for

Mobile Services capital expenditure commitments is L.E 336.87 million equivalents to US$ 58.76 million which represents fixed assetscontracts entered into and not yet executed as of the consolidated balance sheet date.

24- DEFERRED TAXBased on IAS 12 (Income Taxes), deferred taxes are calculated on the basis of the anticipated local tax rates in the various countries at the time of realization.These rates are normally based on the rules in effect or adopted on the reporting date.

A) Recognized deferred tax assets and liabilities

Assets Liabilities Net Movement31/12/2006 31/12/2005 31/12/2006 31/12/2005 31/12/2006 31/12/2005 31/12/2006

US$ US$ US$ US$ US$ US$ US$Property, plant andequipment 3,869,384 2,114,851 (188,317,466) (185,295,195) (184,448,082) (183,180,344) (1,267,738)Licenses and software 26,775,816 — (11,079,276) (3,598,646) 15,696,540 (3,598,646) 19,295,186Tax losses carried forward 2,988,968 38,046,533 — — 2,988,968 38,046,533 (35,057,565)Provisions 3,448,307 1,885,957 (20,903) — 3,427,404 1,885,957 1,541,447Other items 3,773,224 5,153,903 (144,567) (17,415) 3,628,657 5,136,488 (1,507,831)Dividends 1,946,827 — — 1,946,827 — 1,946,827Cumulative translationadjustments. — — — — — — (3,576,109)Recognized DTAssets/Liabilities 42,802,526 47,201,244 (199,562,212) (188,911,256) (156,759,689) (141,710,012) (18,625,783)Set off tax (10,123,984) (44,889,947) 10,123,984 44,889,947 — — —Net DT assets/liabilities 32,678,542 2,311,297 (189,438,228) (144,021,309) (156,759,689) (141,710,012) (18,625,783)

B) Unrecognized deferred tax assets

December 31, December 31,2006 2005US$ US$

Trade receivables 437,632 653,917Investments 5,392,721 4,801,137

5,830,353 5,455,054

Deferred tax assets resulted from the impact of temporary differences relatedto Trade receivables and investments were unrecognized due to the likelihoodthat the temporary difference will not reverse in the foreseeable future.

C) Deferred tax adjustmentsDecember 31,

2006US$

Net deferred tax movement assets/ liabilities 18,625,783Add: Deferred tax reported directly in shareholders’ equity 202,959Effect of changes on proportionate companies (217,740)Total deferred tax expenses 18,611,003

D) Income tax expenseDecember 31, December 31,

2006 2005US$ US$

Income tax for the year 165,108,216 85,323,646Deferred tax expenses 18,611,003 57,542,492Total income tax 183,719,219 142,866,138

25- EARNINGS PER SHAREBased on IAS 33 (Earnings per Share), earnings per share are calculatedusing the weighted average number of shares outstanding through outthe year.

Financial year endedDecember 31,

2006 2005Net profit for the year (US$) 720,758,028 666,731,423Weighted average of shares through the year 217,362,744 218,597,534Earnings per share (US$) 3.32 3.05

Weighted average shares are calculated based on the number of ordinary sharesoutstanding during the year excluding the treasury stock.

26- PROVISIONSContingencies

provisionsUS$

Balance at January 1, 2006 72,414,022Changes coming from changes in proportionate companies 1,365,763Made during the year 19,251,010Used during the year (30,198,468)Cumulative translation adjustments 949,691Balance at December 31, 2006 63,782,018

27- EMPLOYEE STOCK OPTION PLANThe Company has approved a plan to grant some of its employees' stock options in the Company's shares through Orascom Telecom ESOP Ltd., Malta (a wholly owned subsidiary). According to this planthe employees will have the right to take the benefit of the differencebetween the stock option price and the exercise price of the shares when the option vests. The Company shares held by Orascom TelecomESOP Ltd. are presented as treasury stock in the consolidated financial statements.

On June 10, 2003 the Board of Directors approved the allotment of 1,650,000 shares to certain officers and key employees based on their period of service and level of performance. Under this stock option plan, the eligible employees will be entitled to exercise their options as follows:

Exercise Year No. of Shares2006 542,5842007 422,8342008 174,7502009 128,2502010 104,0002011 37,500

1,409,918

28- GRANTED GUARANTEES FROM OTH TO THE SUBSIDIARIESOrascom Telecom Holding signed agreements as a guarantor for the following subsidiaries:-

Subsidiary name To guarantee Maximum Liability ExpiryPioneers Co. Pella Company tax position US$ 50 million 31/12/2007

Orascom Telecom Iraq Unpaid amount from the 5.5 % + unpaid amount for As long as thesupplier facility agreement Alcatel US$ 2.47 million, Motorola agreement is validwith Alcatel & Motorola US$ 1.55 million as of 31/12/2006

Sheba Telecom-Banglalink Supplier facilities agreement € 50 million and US$35 As long as thewith Siemens AG, Huawei million respectively + agreement is validTech Investments any interest or costs

Med Cable Facilities from West LB € 16 million + any interest As long as theand Calyon Banks. or costs agreement is valid


— InTouch for Telecommunication Company capital expenditures commitments amounted to L.E 153 000 equivalent to US$ 27 K which represents the unpaid capital for long-term investment.

— Sheba telecom capital commitments amounted to Euro 12 million and US$ 11 million.

— International Wireless Communication Pakistan Ltd (IWCPL) has the following commitments1- in respect of capital and other expenditure amounted to PKR

4,388 million equivalents to US$ 72 million.2- IWCPL is required to pay US$ 14.5 million in the year 2007 to

Pakistan Telecommunication Authority in respect of renewal of GSM license.

3- IWCPL has entered into a forward exchange contract in which thecompany is committed to buy US$ 12 million at contractuallyagreed price of PKR 746.65million.

4- IWCPL is committed to acquire 100% equity interests of ZarcoTelecom (Private) Limited, Cybersoft Technologies (Private) Limited,Dancom Pakistan (Private) Limited and WOL Telecom Limited atpurchase price with a total amount of PKR 979 million equivalentto US$ 16 million..

31- TAX STATUS OF THE PARENT31.1 Corporate tax and movable capital tax

Years from 1997 till 1999:The Company submitted its tax returns for these years, and receivedform No. 18 taxes, in the name of Orascom Technology (formallythe name of Orascom Telecom Holding) including the tax assessmentwith a total amount of L.E 7 million for these years. However, inJanuary 16, 2003 the Company’s management filed an appeal,against the assessment included in this form. On November 3,2004 the appeal committee accepted the company’s conclusionand decided to return the file back to the corporate income taxinspectorate for inspection. On December 20, 2005, the companyrejected what the corporate income tax inspectorate has ended upwith, and requested for returning the file to the internal committeein the corporate income tax inspectorate.

Year 2000The Company’s books were inspected by Tax Authority ondiscretionary basis, and the company was notified by the form no.(19) taxes, the company appealed there to during the legal graceand waiting for the notice of the internal committee at theinspectorate to issue a resolution for re-inspection.

Years from 2001 till 2004:The Company submitted its Income Tax returns for these yearson the legal required dates, and the tax authority has not yetinspected the Company’s records for these years.As per the tax return for these years, there is no corporate tax dueon the net income. Management has applied, when preparing thetax return, article No. (111) of the Income Tax Law No. 157 for1981. According to the aforementioned article net profit derivedfrom activities that are being undertaken abroad by independententity is not subject to tax in Egypt.

Year 2005Starting from 1/1/2005, the Company's profits are subject toEgyptian Income Tax Law No. 91 for 2005 which supersede thelaw No. 157 for 1981. Accordingly the company has filed the taxreturn for year 2005 according to the provisions of law No. 91for2005 and its executive regulations.

31.2 Stamp duty and state resources development dutyStamp duty and state resources development duty were settled andpaid up to October 31, 2003. The company’s books are currentlyunder examination till 31/12/2005.

31.3Salary taxYears till 2004:The company’s books where examined and the differences are settled.

Year 2005:The company’s books were not examined and no claims were received.

32- SUBSIDIARIES GOING CONCERN— Orascom Telecom Iraq -subsidiary of Orascom Iraq Holding- had

obtained a two years license to operate and manage mobile cellularservice from the Iraqi Ministry of Communications (MOC). This temporary license agreement expired on December 22, 2005, from that date the Iraqi Ministry of National Communication and MediaCommission keeps to extend the license period for three months, the last extension was till March 31, 2007. In case the management failed to renew the validity of the license and obtain a permanent license, Orascom Telecom Holding is committed to transfer all longterm assets to another subsidiary outside Iraq at amounts not less than its carrying amount. Accordingly, the management decided toapply going concern assumption.The total consolidated assets and revenue of Orascom Iraq Holdingrepresent 4.01% and 11.7 % respectively of the Groups total consolidatedassets and revenues.

— During the financial year ending December 31, 2006 Sheba Telecom(subsidiary of Orascom Telecom Ventures) incurred a net accumulatedloss at TK 4 742 190 522 equivalent to US$ 67 927 557. The managementis however, confident that the company will continue in operationalexistence for the foreseeable future on the basis of improved profitabilityand continued support of Orascom Telecom Holding.

— During the financial year ending December 31, 2006 CAT incurrednet accumulated loss of DZD 2 624 371 495 equivalent toUS$ 36,277,942 OTH proportionate share in the retained losses is US$ 18,104,812 and since the retained deficit exceeded half the company’s issued & paid-up capital, an extra-ordinary general assemblymeeting will be settled to study the going concern of the company.

33- FINANCIAL INSTRUMENTS AND RELATED RISK MANAGEMENTBased on IFRS 7 (Financial Instruments: Disclosures), a financial instrument is any contract that gives rise to a financial asset of oneentity and a financial liability or equity instrument of another company.The carrying value of these financial instruments represents a reasonableestimate to their fair values with the exception of loans whose presentvalues represent a reasonable estimate of their fair values.The Group's activities expose it to a variety of financial risks, includingthe effects of changes in foreign currency exchange rates and interestrates. The overall risk management program seeks to minimize potentialadverse effects on the financial performance of the Group. The Groupdoes not undertake any speculative treasury activities.33.1Credit risk

Management has a credit policy in place and the exposure to creditrisk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount.In certain subsidiaries, the Group retains deposits from customersand may suspend services for delinquent customers. As of the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset.

33.2 Interest rate riskAs at December 31, 2006 the Parent Company holds a number ofloans. The interest rates on these loans are variable (see note 16).However the Company utilizes any available funds to reduce anyinterest exposure in addition to the Hedge agreements to hedge the interest rate risk related to loans and bonds.The overdraft is temporary and may be settled without notice forfinancing purposes, and the related interest rate is variable. However,the effect of the interest rate risk is low due to its short-term maturity.

33.3Foreign currency riskThe Group operates across several countries and is exposed to foreign exchange risk on translations, arising principally with respectto the US$ dollar value against the Euros, Algerian Dinar, TunisianDinar, Pakistani Rupee and Bangladesh Takka. The Group is exposed to foreign currency risk on the borrowing denominatedin US$ dollar and Euros, particularly those borrowings related to

capital expenditures.The Parent company and some of its subsidiaries have entered intoUS$ dollar and Euros SWAP agreements during the year in orderto obtain US$ dollar and Euros when needed.The Group also, has investments in foreign subsidiaries whose netassets are exposed to currency translation risk when revalued in US dollars for inclusion in the consolidated accounts. This translationrisk is unhedged.

33.4Liquidity and FundingThe Group is financed through a mix of equity share capital andbank borrowings. Full details are given in notes 13 and 16 to theconsolidated financial statements. The Group's liquidity risk management policy requires that sufficient cash is maintained tomeet short-term funding requirements through the availability ofan adequate amount of committed and uncommitted credit facilities.

34- Principal subsidiary undertakings and joint venture undertakings34.1Consolidated subsidiaries

As of December 31, 2006 the group owns the following subsidiaries, which have been fully consolidated in the consolidated balance sheets:

Fully consolidated subsidiaries:Ownership Ownership Country of

% % incorporation31/12/2006 31/12/2005

In Touch for Telecommunications Company 93.5% 73.47% EgyptOrascom Telecom C.S Company 100% 100% MaltaTelecel International Ltd. Company 100% 100% MaltaInternational Wireless Communication Pakistan Ltd (IWCPL) 100% 100% MaltaPharaoh Telecommunication Company — 55% EgyptOrasinvest Holding Inc. Company (*) 100% 100% MaltaRing Distribution Company 99% 99% EgyptOrascom Telecom Algeria Company 96.81% 95.59% AlgeriaOrascom Telecom ESOP Company 100% 100% MaltaArpu for Communication Services Company (*) 96.82% 87% EgyptMoga Holding Limited Company 100% 100% MaltaOrascom Iraq Holding Company 100% 100% MaltaOnward Technologies Ltd. Company — 55% British Virgin IslandsOrascom Telecom Services Europe Company 100% 100% FranceM-Link company 100% 100% MaltaOrascom Telecom Ventures Company 100% 100% MaltaMed Cable Company 100% 100% United KingdomOratel International Ltd. Company 100% 96.09% MaltaPioneers Investment Company 100% 100% JordanOrascom Telecom Eurasia 100% 100% MaltaOrascom Telecom Wireless Europe 100% 100% FranceWimax (**) 100% — United KingdomTrans World Associate 51% — PakistanOrascom Telecom Asia 100% — Malta

(*) Includes direct and indirect ownership stake.

(**) Wimax Company consolidated by 100 % which a result of considering Put option and commitment to sell non financial item agreements (note no.20.2)


RECONCILIATION BETWEEN FUNCTIONAL AND EBITDA PRESENTATIONFunctional Reclassification EBITDAPresentation presentation (1)31/12/2006 31/12/2006

US$ US$

Cellular operations revenue 3 883 829 958 (3) 10 035 026 3 873 794 932Telecommunications service revenue 504 606 489 (3) 13 269 522 491 336 967Internet service revenue 35 852 497 35 852 497Total revenues 4 424 288 944 23 304 548 4 400 984 396

Cellular operations cost (1 782 733 951) (2) (761 254 748) 1 021 479 203Telecommunications service cost (467 817 209) (467 817 209)Internet service cost (14 572 037) (2) (2 007 131) (12 564 906)Total operating cost (2 265 123 197) (763 261 879) (1 501 861 318)Gross profit 2 159 165 747 (739 957 331) 2 899 123 078

Other income 29 494 239 (3) (16 904 188) 46 398 427Other operating expenses — (2) 248 474 514 (248 474 514)Selling , general and administrative expenses (682 160 893) (4) 5 084 492 (687 245 385)Remuneration and allowance for board members (5 626 180) (5 626 180)Provisions (19 251 010) (19 251 010)Allowance (30 770 202) (30 770 202)Earnings before interest, tax, depreciation and amortization — 1 954 154 214Impairment of assets (5 084 492) (4) (5 084 492)Depreciation and amortization of assets (73 571 872) (2) 514 787 365 (588 359 237)Net financing cost (384 606 682) (384 606 682)Share of results of associated companies (16 911 868) (16 911 868)Other income — (3) (6 400 360) 6 400 360Capital losses (3 803 640) (3 803 640)Gain from sale of investments 4 859 412 4 859 412Earnings before income tax 971 732 559 971 732 559Income tax (183 719 219) — (183 719 219)Net profit for the year 788 013 340 788 013 340Attributable ToEquity Holders of the Parent 720 758 028 — 720 758 028Minority interest 67 255 312 — 67 255 312Net profit for the year 788 013 340 — 788 013 340Earnings per share 3.32

(1) Published in year end 2006 earning release.(2) Technical asset depreciation and other site expenses were reclassed in separate line item as Other operating expenses and depreciation and amortization under

the EBITDA presentation.(3) Other income was reclassed in under the EBITDA presentation.(4) Impairment of assets are reclassed in one separate line item.

34.2Joint VenturesAs of December 31, 2006 the Company has joint control over the following subsidiaries, which have been proportionally consolidated in the consolidatedbalance sheets:

Prorate Interest as atName of the Joint Venture 31/12/2006 31/12/2005 Country

Egyptian Company for Mobile Services (*) 33.03% 31.26% EgyptOrascom Telecom Tunisie (**) 50% 50% TunisConsortium Algerian Telecommunications (***) 50% 50% Algeria

(*) Proportionally consolidated for Egyptian Company for Mobile Services through direct share in:

Name of the Company Ownership % as at Ownership % as atDecember 31, 2006 December 31, 2005 Country

Mobinil for Telecommunications 28.75% 28.75% EgyptEgyptian Company for Mobile Services 17.87% 16.6% EgyptTelecel International 0.5% — Malta

(**) Proportionally consolidated for Orascom Telecom Tunisie through direct share in:


Orascom Tunisia Holding Ltd. 100% 100% MaltaCarthage Consortium Co. 100% 100% Malta

(***) Proportionally consolidated for Consortium Algerian Telecommunications through direct share in:


Consortium Algerian Telecommunications 33% 33% AlgeriaInternational Telecommunication Consortium Ltd. 50% 50% England

35- SUBSEQUENT EVENTS— On January 25, 2007 the extraordinary general assembly has agreed to amend article no. (6) and (7) of the statutes of the

company that pertain the issued capital and the nominal value of the Company’s capital shares. The issued capital would become one billion and one hundred million Egyptian pound represented in one billion and one hundred million shares with a par value of LE 1 per share.

— Orascom Telecom Holding announces a potential on market GDR repurchase plan of up to the GDR equivalent of 5 % of the outstanding shares (approximately 11 million shares) over the next 12 months.

— During January 2007 Orasinvest Holding Inc. Company entered into an agreement to purchase a new building for its Egyptian subsidiaries in Zamalek, Cairo. The agreement calls for payments totaling US$ 8.5 million. As of the date of issuing the financial statements an amount of US$ 1.5 million was paid.

— On February 4, 2007 Orascom Telecom Holding announced that it has successfully issued US$ 750 million of Senior Notes due 2014 through Orascom Telecom Finance S.C.A (Luxembourg) . The Notes bear an interest rate of 7.875 % per annum and includes typical high yield bond covenants, and are pari passu with Orascom Telecom’s US$ 2.5 billion senior secured bank facility. The issuer will then lend the proceeds to Orascom Telecom Holding. The proceeds of the bond issue will be used by Orascom Telecom for general corporate purposes which may include investments in new and existing operation and purchases of Orascom Telecom GDRs.

36- COMPARATIVE FIGURES— In compliance with IFRS 2 “Share-based payment” the company had changed the method of payment from cash payment to

equity instrument, accordingly the comparative figure was reclassified by an amount US$ 27,336,972 from current liabilities to other reserves in equity section.


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