Zain Saudi Arabia posts $608 million loss
Two million subscribers added to the network after four months
Zain Saudi Arabia posted a net loss of $608 million for the first four months of operations, adding just over two million customers in the process.
A statement from Zain, which launched in the Kingdom in August last year, attributed the losses to “only 4 months of revenue, yet 18 months of start up and operating costs inclusive of the initial public offering and the launch and preliminary branding campaigns which alone amounted $112 million”.
Gross revenue to December last year stood at $135 million
Zain Group CEO Dr Saad Al Barrak said that revenue targets for 2008 had been exceeded “by an outstanding 27%”.
“Our financial targets have been meticulously laid out and we expect the company to be profitable within a three year time frame,” he said.
Zain Saudi Arabia, which won the third GSM licence in 2007 with a $6.1 billion bid, has just over two million active customers on its network, which the operator said represents a 7% share of mobile users in the Kingdom.
The number of subscribers exceeded the expectations of EFG-Hermes analysts, who expected Zain Saudi Arabia to have 1.3 million subscribers by the end of 2008. However, the losses were larger than the analysts anticipated.
CEO of Zain in Saudi Arabia Dr Marwan Alahmadi said: “Given our strong financial structure and expansionary plans to cover 100% of the Kingdom, Zain Saudi Arabia has several means of financing available to further expand our modern network such as Islamic Murahaba and other conventional financing.”
Zain said that its 3G network is operating at “optimal levels” and is capable of serving of an additional three million customers. At present, the operator claims that its 2G and 3G services cover 95% of the populated area of Saudi Arabia following an investment programme of $1.5 billion in network rollout.