Regional telecomms companies prosper

With the exception of Batelco, the Middle East’s telecomms operators all enjoyed the first half of 2003.

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By  David Ingham Published  August 27, 2003

The first six months of 2003 were bountiful for the most of the region’s telecomms operators, as they posted year on year increases in net profits and revenue. The one exception was Batelco, which experienced a drop in net profit as it cut mobile tariffs.

Qatar Telecom (Qtel) continued its recent spectacular performance. First half net profit grew 12% year on year to reach QR580 million (US $159.3 million.) Revenue for the first six months of the year was QR972 million ($267 million), an increase of 14% year on year.

Growth was driven by the operator’s GSM division, which reported 328,000 customers at the end of the first half, a rise of 55% over a year ago. Qtel said it will distribute a hefty QR330 million as a bi-annual dividend to its shareholders.

Not to be outdone, Saudi Telecom Company (STC) also raked in the cash.
Second quarter net profit reached $503.5 million, taking total first half net to a massive $1.106 billion. In comparison, STC posted a net profit of ‘only’ $348 million for the first half of 2002, when it took a charge against layoffs.

Operating revenue reached $3.466 billion for the first half of 2003, year on year growth of 15.5%.

The UAE’s monopoly operator, Etisalat, also continued to enjoy huge profit margins. It reported total first half net of Dhs1.47 billion (US $400 million), compared with Dh1.25 billion (US $340.33 million) a year ago. Revenue figures were not reported.

Kuwait-based Wataniya Telecom, a private sector GSM operator, prospered from continued growth in subscribers. Second quarter revenue at its Kuwait operation was KD31.3 million (US $104.3M) and ‘post tax’ profit reached KD 9.3 million (US $31M). The figures represented year on year growth of 44% and 60% respectively.

Total first half revenue was KD58.455 million (US $196.1 million) and ‘post tax’ profit was KD16.107 million (US $54.03 million.) Wataniya said its customer base in Kuwait rose by 59,031 in the second quarter to reach 750,585 active customers by June 30.

“The end of hostilities in the region has rejuvenated the market,” said Faisal Al Ayyar, chairman of Wataniya. “There is great demand for our services as you can see from our numbers.

Bahrain Telecommunications Company (Batelco) fared less well than its counterparts. First half net profit was BD27.5 million (US $72.9 million), down from BD34.21 million (US $90.75 million) a year ago. For the first six months of 2003, total revenue stood at BD95.1 million (US $252.2 million.)

Bateclo’s net profit margin took a particular hit in the second quarter, declining from BD19.31 million (US $51.22 million) in Q2 2002 to BD12 million (US $31.83 million) in Q2 2003.

According to a statement, impending competition was the reason for the disappointing figures. Batelco cut GSM prices as it tried to build up market share ahead of the entry of a second mobile operator later this year. The number of GSM subscribers stood at 400,035 customers by the end of the quarter, penetration of around 58%.

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