Telecom Egypt, a fixed-line telephone monopoly, reported a 12.3 percent rise in net profit for the first nine months of 2007 and said it was in talks with two firms to sell its joint venture in Algeria.

The company said on Thursday its net profit rose to 1.7 billion Egyptian pounds ($308.5 million) compared with 1.5 billion pounds in the same period a year earlier, slightly above analysts' expectations.

CIBC Brokerage and Shuaa Capital had expected the company's net profit forecast for the period to reach 1.6 billion pounds.

Total revenues reached 7.5 billion pounds from 6.9 billion pounds in the same period of 2006, the company said in a statement. It said the total number of fixed-line subscribers rose 3 percent to 11.03 million.

"We are back to our normal margines," Chairman Akil Beshir told Reuters.

He said the strong performance of Vodafone Egypt, his company's mobile phone operator partner, contributed significantly to Telecom Egypt's profits.

The company has a 44.79 percent stake in Vodafone Egypt, which contributed 796.7 million pounds to profits in the first nine months of the year, with the balance held by Britain's Vodafone Group.

"It makes us very happy with our partnership with them," he added. The average revenue per user was 55.5 pounds for the nine months, an improvement over the second quarter but down 3.7 percent compared with the nine months ending September 2006.

Beshir said negotiations to sell Algeria's fixed-line unit Lacom, a joint venture with Egypt's Orascom Telecom (OT), were expected to be concluded in "two to three weeks". He did not identify the two companies it was in discussions with.

OT chairman Naguib Sawiris said this month Telecom Egypt was in talks with a company to sell Lacom, but said the deal may not go through because of the Algerian regulator's preferential attitude towards the country's state-owned operator, Algerie Telecom.

Telecom Egypt blamed a 4 percent fall in first-half profit this year on problems with Lacom. Sawiris said Telecom Egypt rather than Orascom would negotiate with the potential buyer.

Lacom, 50 percent owned by each of the Egyptian companies, acquired a licence from the Algerian government in 2005 to be the country's first private fixed-line provider, according to Orascom Telecom's Web site.

The company said on Thursday it signed three contracts to build a submarine cable connecting the Mediterranean city of Alexandria to Europe.

The cable is part of Telecom Egypt's TE North Submarine cable project, announced earlier this year. The project aims at benefiting from Egypt's location to connect Asia to the western hemisphere.

The cable is expected to require nearly $140 million of capital expenditure and would to be ready for service in 18 months, Beshir said. - Reuters