KSA telcos post strong Q4 results
Mobily and Zain both post large revenue gains for Q4 2010
Saudi Arabia's second and third mobile operators, Mobily and Zain KSA, both posted strong results for the fourth quarter of 2010, indicating the country continues to hold growth potential despite having a mobile penetration rate in excess of 100%.
Mobily, which has a mobile market share of more than 40%, experienced a 39% increase in net income, which reached SR1.4 billion ($373 million) in Q4 2010 compared with SR1 billion for the same period in 2009.
Gross profit for Q4 2010 was SR2.5 billion, representing a 22% increase compared with the company's SR2.1 billion profit in Q4 2009.
Total revenues for 2010 reached SR16 billion compared to SR13 billion for 2009.
Abdulaziz Al Saghyir, chairman, Mobily, attributed the revenue growth to higher usage rates. Data transmitted over its network registered 85 terabytes per day compared to 50 terabytes in 2009, and data revenues reached 18% of the company's total revenues, compared to 14% at the end of 2009, while revenues from postpaid subscribers increased by about 50% in 2010.
Meanwhile, Zain Saudi, which launched operations in 2008, said its revenues for the fourth quarter of 2010 increased by 93% to reach SR1.7 bilion, compared to about SR895 million for the fourth quarter of 2009.
The operator, which now has more than 8 million subscribers, saw its gross profit increase by 132% to reach SR826 million, compared to SR356 million in the fourth quarter of 2009.
The company managed to reduce its operating losses for Q4 2010 by 58% to SR179 million, compared to losses of SR435 million in the fourth quarter of 2009.
Dr. Saad Al Barak, CEO, Zain Saudi, said the results proved Zain's ability to "meet its objectives in a timely manner".
Saudi Arabia has a mobile penetration rate of about 190%, while fixed broadband penetration remains well below average for developed nations, at below 50%, giving the country's three telcos an opportunity to grow revenues in the broadband space, according to figures from research firm Value Partners.
STC, Saudi Arabia's incumbent telecom operator, is expected to release its third quarter results later this month.