Mobily boosts subscribers, misses forecast
Saudi's second mobile operator posts 43.3% rise in Q3 profit, now has 40% market share.
Etihad Etisalat (Mobily), Saudi Arabia's second mobile phone operator, has boosted market share by more than 30% in less than a year, its chief executive said on Wednesday.
Mobily, which posted a 43.3% rise in third-quarter profit on Wednesday, now commands 40% of the market, up from 30% at the end of 2006, Khaled Al-Kaf said.
"We are approaching 40% market share, maybe more," Kaf told Reuters by telephone.
Mobily and incumbent Saudi Telecom will face new competition next year when Kuwait's Mobile Telecommunications (Zain) starts a third mobile phone firm with other investors.
Telecom companies in Saudi Arabia, the world's biggest oil exporter, may be generating a revenue of 55 billion riyals ($14.67 billion) in 2010, up 38% from 2006, the kingdom's telecom minister said in May.
But growing competition in Saudi Arabia will demand tapping new revenue flows by providing data services, Kaf said.
Mobily would complete by the first quarter of 2008 its acquisition of Bayanat Al-Oula - one of two firms licensed to deploy Wimax wireless internet access network in the kingdom, he said.
It agreed to buy the firm for 1.5 billion riyals in September.
"We will start consolidating it in the second quarter of next year," he said.
Mobily, which is already providing wireless internet services, plans to launch new broadband services in the second half of 2008, Kaf added.
"We will make an aggressive entry into broadband services. The financial return will however take some time to reflect on our bottom line," he said.
The company, whose third-quarter profit missed forecasts of five analysts, is not planning to distribute a dividend in 2007, Kaf said.
Mobily would continue to invest in building mobile and broadband infrastructure, he said. Mobily raised $2.88 billion this year in an Islamic loan to help fund expansion.
"The growth [in the third-quarter] was not excellent, but it was good given competition, which is getting stronger in the Saudi market," Kaf said. - Reuters