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Ammar Aker: The Company’s distributions to its shareholders will not be affected by the decrease in its profits due to the new adopted income tax law

2012-09-24

Mr. Ammar Aker, the CEO of Palestine Telecommunications company PALTEL- the largest company by market capitalization-, noted that the company’s distributions to its shareholders will not be affected by the decrease in its profits due to the new adopted income tax law by the Palestinian National Authority and postponing the tax exemption of the Investment Promotion Act. Net profits of "Palestine telecommunications "reached JD41.4 million in the first half of this year, down by 13% from the first half of last year, Aker predicted this decline to withdraw the remainder of the year. Aker said in an interview:" I don"t think that the decline of the profits will affect the level of distributions, and the Board doesn"t want to change the level of these distributions, adding: I"m not sure of its increase for this year, but I"m sure it won"t diminish, as it is known, the indebtedness of the company are slim, so they can maintain the same level of distributions and coverage of investment commitments, despite its low profits.

The connection with the submarine cable free us from the Israeli companies control

Meanwhile, Aker said the agreement signed by the company, last week with the Turkish company "PANTEL" to link the Palestinian network with a submarine cable connects the region with Europe, "it is essential for the Palestinian telecommunications network expansion and its entry to the vicinity of international and regional cooperation and to open communications portals, specifically regarding the Internet towards universality."

Israeli corporate is seeking to thwart the Palestinian communication network project

Aker predicted that Israeli companies is seeking to lower the price of the Internet services in the Palestinian territories, with the aim of thwarting the Palestinian communication network linking the cable, adding that these companies "already offered us lower prices in exchange for abandoning the cable link project, but we rejected this offer, our goal is to achieve the independence of the Palestinian network far from the Israeli corporate network".

The possibility of lowering the prices in the long term

Al-Aker is not expecting decline in prices, "because we have low price level compared with neighboring countries except Israel, because Israel has a million subscribers to" DSL "while we have only 200,000, but compared with Jordan, Egypt and all the similar countries the prices are acceptable prices and probably less, but the subscription to the cable allow us to get better prices in the future, through work extensions for this cable."

Fears of escalating Israeli corporate activity

Despite the decline of the Israeli telecom companies" activity in the Palestinian market in recent years, however, Al-Aker warned that denying the Palestinian firms from the third and fourth generation frequencies may enable Israeli companies to expand again in the Palestinian market.

Aker denied any slowdown in the company"s investment pending to see how the subject of the license will act, which expires for fixed line in 2016, and for "Jawal" after two years (2018). He said: every year we invest at least $ 50 million, and this course will continue in the coming years as needed for expansion, if we get our third generation frequencies, we need investments to rehabilitate the network of at least $ 70 million, investment linked to the demand in the market, not a random investment.

Also, Al-Aker denied the existence of any recent plans to enter into partnerships with foreign companies, stressing that any partnership must be in the interests of subscribers, shareholders and the economy in General.

He said reducing the demand for PALTEL"s shares and the shares of the remaining listed companies on Pex, returns to the country situation, which led to huge selling bids in the Palestinian market. It is not true to say that PALTEL has injected JD50 million in buying shares with the Arab Bank over the past two years, the total of the bank"s purchases 5 million shares over the past seven years, and this was caused by our liquidity, we continue to believe that the bank"s share is remained less than its book value, that led to the Board of Directors" decision to purchase shares of the Bank.