KSA telcos’ results fall short of expectations

The Q1 results of Saudi Arabia's three main telecom operators, STC, Mobily and Zain KSA, fell short of analyst expectations.

Mobily saw a 40% rise net profit in Q1 compared the same period in 2010, but still fell short of analysts expectations.

Eight analysts surveyed by Reuters had expected Mobily to report an average net profit of around SR1 billion for Q1.

The mobile operator said that its net profit reached SR998 million ($266 million) in the three months to March 31, up from SR714 million last year.

Meanwhile, incumbent operator STC posted an 11% decline in net profit, which fell to SR1.573 billion ($419.5 million) in Q1, compared to SR1.772 billion in Q1 2010.

STC blamed the decline on a SR375 million spike in salary costs after King Abdullah ordered salary increases in the country.

"Without this cost ... there would have been a 10 percent rise of profit compared to the same quarter last year," STC said, according to a report from Reuters.

STC's revenues rose by 4% to reach SR13.07 billion in Q1.

Saudi Arabia newest mobile operator, Zain KSA, moved closer to profitability by reducing its net loss in Q1, but also failed to live up to analysts expectations.

The operator reported a Q1 net loss of SR532 million ($141.9 million), compared with a loss of SR662 million in the same period last year.

Analysts polled by Reuters had expected the firm to post a quarterly loss of SR428 million ($114.13 million) for Q1.

Revenue for the first-quarter was SR1.48bn ($394.6m), compared with SR1.09bn ($290.6m) for the year-ago period, Reuters reported.