Over the past 18 months Saudi Telecom Group (STC) has been plagued by a crisis in management with senior figures having departed the telco suddenly. Given it is based in the largest economy in the region the ripples of its disquiet can be felt across the Middle East and beyond as the telco grapples to correct its course

Saud Al Daweesh’s resignation as STC Group CEO in April 2012 marked the start of numerous senior management resignations at the telco

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A rapidly increasing customer base helped mobile operator Viva Kuwait make an annual profit for the first time in 2012, four years after the STC Group affiliate launched services.

Unlisted Viva reported a net profit of KWD3.9 million (US$13.69 million) for 2012. This compares with a net loss of KWD14.4 million in 2011.

The operator, which competes with Zain and Ooredoo subsidiary Wataniya, said its customer base rose by 60 per cent to 1.6 million in 2012, enabling it to boost its market share to 29 per cent from 20 per cent.

Kuwait has no telecom regulator and market share figures are disputed by the rival operators – former monopoly Zain puts its share at 42 per cent, with Viva and Wataniya on 21 and 37 per cent respectively.

Viva said its 2012 cash flow was KWD32.2 million, up from KWD72,000 a year earlier. It did not publish its annual revenue.

STC owns 26 per cent of Viva, which has yet to list on the Kuwait bourse.

The Libyan government has stopped a process to award a management contract for its state-owned telecom network, the Libyan Post, Telecommunication and Information Technology Co (LIPTIC).

Citing Etisalat’s CEO, Ahmad Julfar, Reuters reported that the tender had been put on hold by the government for unspecified reasons.

Etisalat had been one of the companies bidding in the tender.

A landline monopoly, LIPTIC also owns majority stakes in the country’s two mobile networks that were reclaimed from relatives of the former dictator, Muammar Gaddafi following his downfall.

It was not clear if the tender was for just the landline network, or included the two mobile networks as well.

Ericsson and STMicroelectronics have decided to call time on ST-Ericsson, their loss-making wireless chip joint venture.

As part of the closing down process, Ericsson and STMicroelectronics have each agreed to take some of ST-Ericsson’s assets in-house.

Ericsson has bagged the design, development and sales of the LTE multimode thin modems (including 2G, 3G and 4G multimode), while STMicroelectronics absorbs other existing ST-Ericsson products, plus certain assembly and test facilities.

The formal transfer of assets, subject to regulatory approvals, is expected in the third quarter.

Once the asset split is completed, there is a plan for Ericsson to assume around 1,800 ST-Ericsson employees and contractors, most of who are based in Sweden, Germany, Italy and China. It is also proposed that STMicroelectronics takes on about 950 of the joint venture’s employees, mainly in France and Italy.

The process of closing down the remaining parts of ST-Ericsson, which have not been taken up by the parent companies, has already started. About 1,600 jobs will be cut worldwide.

The announcement to wind down the business comes only days after a Bloomberg report revealed the company’s parents had failed to find any takers for the business, despite searching for a buyer for three months.

According to Reuters, STMicrolectronics is expected to rack up cash costs of between US$350 million and US$450 million as a result of the shutdowns and restructuring.

Ericsson, in a statement, says it has made provisions of SEK3.3 billion (US$510 million) to cover costs related to the wind down of ST-Ericsson. The Swedish manufacturer reckons that the multimode thin modem business it has taken on, to be reported as a standalone segment, will generate operating losses of around SEK500 million in the fourth quarter. The loss primarily relates to R&D expenses, says Ericsson.

To oversee the transition process, Carlo Ferro, ST-Ericsson’s COO, has been appointed as the joint venture’s chief executive. He takes over from Didier Lamouche on April 1, who recently announced his departure to pursue other opportunities.

Saudi Telecom Group’s CEO Khaled Al Ghoneim has resigned after less than nine months in his position, the latest senior executive to leave the operator.

In a statement, STC cited “special circumstances” as being behind his departure, without giving any further detail.

However, Al Ghoneim is only one of several top executives to depart the operator over the last 12 months.

Al Ghoneim was appointed in June 2012 following the resignation of his predecessor Saud Al Daweesh two months previously.

International CEO Ghassan Hasbani also left in 2012. And then last month the CEO for STC’s domestic operations, Jameel Abdullah Al Molhem, departed the company.

Although no explanation has been given for Al Ghoneim’s departure, the company has struggled for profitability. It posted a 79 per cent drop in Q4 profits in January 2013, blaming rising costs and one-off charges at its Indian and South African operations.

No date for Ghoneim’s actual departure from STC was given or a name of his successor.