Mobily trumps rivals in KSA operators' Q1 results
Mobily saw its profit rise by almost 50% while rivals STC and Zain posted worse than expected results for the first quarter of the year
KSA mobile operator Mobily saw its profit rise by almost 50% in the first quarter of the year, aided by a growing demand for mobile broadband and an increase in postpaid subscribers.
Meanwhile, rival Saudi operators Saudi Telecom Co (STC) and Zain posted worse than expected results for the first quarter of the year.
Mobily's net profit for the first three months of the year stood at SR714 (US$190 million), up 49% compared to the same period last year, when it stood at SR480 ($128) million.
Revenue for the first quarter reached SR3.581 billion ($954 million), an increase of 27% when compared to Q1 09 results.
In a statement released today, Mobily attributed the increase in revenue to growing demand for mobile broadband and an increase in postpaid subscribers, which it said was the result of the company's focus on increasing customer loyalty, stimulating usage, and increasing penetration rates in high potential segments.
In contract, KSA incumbent and market leader by subscriber numbers STC suffered a 29% fall in first quarter net profit.
In a statement released to the KSA bourse yesterday, 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.
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.
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 on its overall results.
Zain, the third placed operator and most recent entrant to the mobile market in KSA, posted a first-quarter net loss of SR663m (US$177m).
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 KSA, which launched towards the end of 2008 and has an 11% share of the market, when it made a net loss of SR765m ($204m).
Mobily chairman Abdulaziz Al Saghyir said Mobily has successfully completed LTE (fourth generation wireless technology Long Term Evolution) trials in readiness for higher demand for greater bandwidth.
And he said the Etisalat-backed telco would look to enterprise customers for continued growth. He said: "There is real potential for Mobily's business offerings, which is why we plan on focusing more in the coming period on high value business customers, the government sector and the private sector."