Audit reports by Egypt’s Accountability State Authority/ASA revealed severe financial and operational violations at Telecom Egypt in the years leading up to a deadly blaze at its Ramses exchange, a critical node in the country’s telecom infrastructure.
Despite repeated warnings from ASA between 2022 and 2025, the state-owned company failed to act, according to investigative outlet Matsada2sh.
The 11-story Ramses exchange, which handles around 40% of Egypt’s local and international telecom traffic, caught fire last Monday, Jul. 7, killing four employees and injuring 32. The incident disrupted internet, phone, and banking services across the country for several days and reignited concerns over infrastructure centralization and oversight failures.
“The Ramses exchange clearly played a far more central role than officials claimed,” said Tamer Mohamed, secretary of the communications division at the Federation of Egyptian Chambers of Commerce, in a televised interview. “With all due respect to the denials, the reality we witnessed tells a different story.”
Internal audit reports cited by Matsada2sh show that Telecom Egypt, which had monopolized fixed-line telecommunications and internet infrastructure since 1998, repeatedly dismissed ASA recommendations, including warnings about continuing to operate fixed assets whose lifespans had expired as far back as 2016 and 2018. These assets were still on the books in 2025, valued at 14.1 billion pounds (approx. $280 million).
ASA also found 4.1 billion pounds ($82 million) in idle assets, including unused international cable capacities and damaged copper lines, which remained on the company’s ledgers.
In its latest findings through March 2025, ASA said the company had failed to conduct required periodic reviews of cable lifespans and other infrastructure components, violating Egyptian Accounting Standard No. 10.
Equipment damage in Menoufiya and Qalyoubia was also not written off, raising concerns over budget irregularities and weak internal controls.
A separate violation involved core equipment installed at Ramses valued at 58 million pounds ($1.1 million) that was not listed as “fixed assets,” excluding it from regular maintenance audits. Experts called this a “serious loophole” in oversight.
The audit also flagged opaque procurement practices, including open-ended transfers of supplies from Telecom Egypt to the Armed Forces’ National Service Projects Organization and the Ebda initiative—a presidential program launched by Abdel Fattah El-Sisi to promote domestic industry and reduce import dependence.
According to ASA, there were no official documents confirming the receipt or financial reconciliation of these transfers.
The absence of such records left nearly 222.7 million pounds ($4.45 million) in receivables, some tied to unverified checks, which auditors said raises serious concerns about accountability, proper bookkeeping, and the potential misuse of public funds.
Further ASA findings indicated that Telecom Egypt invested 39.65 million pounds ($790,000) in five companies that generated no returns, incurring losses of 34.2 million pounds ($680,000) despite repeated recommendations to exit or reassess these ventures.
While ASA's mandate is limited to reviewing financial statements and issuing accounting recommendations, Matsada2sh concluded from the reports that systemic failures in asset and investment governance persist at Telecom Egypt, where the government retains a 70% stake.
Given the complete reliance of internet service providers and mobile networks on the infrastructure managed by Telecom Egypt, the continuation of these violations reflects a structural flaw in the telecommunications sector. This is especially concerning in light of previous international warnings, including a 2019 World Bank report on the danger of centralizing services at a single point, which helped it cut off service during the January 25, 2011 revolution, according to a Wired article published in February of the same year.
