Saudi phone network Zain reports 2018 financial losses

Saudi Arabia’s third biggest telecoms operator, Zain Saudi, has filed its third consecutive quarter of losses, local media have reported.

According to an official source at the company, Zain suffered a loss of 115 million Saudi riyals ($30.6 million) in the first half of 2018, compared to a profit of 53 million Saudi riyals ($14.1 million) during the same period last year.

Mobile telecommunication companies in Saudi Arabia have faced a continuous decline in revenue in the past year, which has led to reports of huge financial losses. Economists say that the kingdom’s current economic issues, combined with the growing use of free mobile applications, are the main factors affecting the growth of the country’s telecommunications sector.

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Last week, Aljazira Capital, a leading Saudi investment solutions company, said that the country’s telecommunications sector “would witness lower growth opportunities in 2018.”

Aljazira Capital noted that telecoms giant Etisalat is expected to achieve a 4.4 per cent growth this year, with a net profit amounting to 10.6 billion Saudi riyals ($2.8 billion). It also predicted a loss of 185 million Saudi riyals ($49 million) by Zain by the end of the year, and a loss of 658 million Saudi riyals ($175 million) by the kingdom’s second largest operator, Mobily. Aljazira added that “Etisalat would earn 52 to 54 per cent of the market in 2018, while Mobily and Zain would acquire the rest of the market share.”

In May, the Saudi Communications and Information Technology Commission (CITC) announced that the kingdom’s largest telecoms operator, Saudi Telecom Company (STC), had achieved a total revenue of 71 billion Saudi riyals ($18.9 billion) in late 2017, marking a 2.25 per cent decline in revenue compared to 2016.

In September 2017, Saudi Arabia lifted a long-term ban on voice calls using Skype and WhatsApp applications as part of nation-wide reforms. The reforms were initiated by the kingdom’s new crown prince, Mohamed Bin Salman, and have since continued with the aim of attracting foreign investment in the country and opening Saudi society.

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