Saudi telcos suffer worse than expected first quarter

STC suffers 29% fall in profit, while Zain posts net loss of SR663m ($177m). Rival telco Mobily's results are due in the next two days

Tags: Etisalat International - UAESaudi ArabiaSaudi Telecom CompanyZain - Saudi Arabia
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Saudi telcos suffer worse than expected first quarter KSA market leader STC's drop in profit was steeper than anticipated, according to a Reuters poll.
By  George Bevir Published  April 20, 2010

Two of Saudi Arabia's telecom operators, Saudi Telecom Co (STC) and Zain, have posted worse than expected results for the first quarter of the year.

STC suffered a 29% fall in first quarter net profit, while Zain, the most recent entrant to the mobile market in KSA, posted a first-quarter net loss of SR663m (US$177m).

In a statement released to the KSA bourse, STC said it made a net profit of SR1.772 billion (US$472.5 million) for the first three months of the year, down from SR2.49 billion ($664 million) in the same period last year.

KSA market leader STC's drop in profit was steeper than anticipated, according to a poll conducted by Reuters, with analysts expecting the firm to report SR2.42 billion ($645 million) in net profit.

In another Reuters survey, EFG-Hermes said it expected Zain to make a smaller loss of SR618 million ($164 million).

It is an improvement on the same period last year for Zain, which launched in KSA towards the end of 2008 and has an 11% share of the market, when it made a net loss of SR765m ($204m). However, it is a wider loss than the final three months of last year, when the figure stood at SR657m ($175.2m).

The second largest GSM operator in the KSA market by subscriber numbers, Etisalat-backed Mobily, says it will release results in the next two days.

STC said the drop in profit was due to a fall in international call prices, a rise in fees related to using external networks and an increase in group capital spending. It also said that the shrinking of the group's ownership in Malaysia's largest mobile phone service provider Maxis, had an impact.

3257 days ago

STC has been nicknamed "Saudi Theifs Company" or "Steal The Customer". Indeed, they have defrauded their customers of thousands of Saudi Riyals. Even if this is due to a buggy billing system, which might be forgivable, they should have recalculated customers' bills and reimbursed the difference. They failed to do so and now suffer the consequences of thousands of customers switching to Mobily.

3260 days ago

I agree with the first comment. STC is stealing people's money, I am a victim of that already. A friend also mention it to me that he get a service without he's knowledge and STC is billing him on that service. The funny thing is he wants that service to be cancelled but STC says he has to pay the bill first. What a company.

3261 days ago

STC is the biggest theft company in communication business. All the profits are coming from stealing people money & they made full their pockets from poor people who trusted first. It deserves to lose and people should not trust this theft company anymore.

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