STC has reportedly offered BD86.68 million (US$230 million) for Bahrain’s third mobile licence, and is on track to have the offer ratified given it was the only participant to submit a financial bid. However, Bahrain’s regulator, the TRA, is yet to confirm whether the bid has been accepted.

The TRA has previously stated that STC passed pre-qualification requirements with group revenues in excess of US$9 billion per annum, operations in Saudi Arabia and six other countries, more than 60 million subscribers and deployments of the latest technology.

The two mobile incumbents are Batelco and Zain Bahrain, with Bahrain estimated to have a mobile penetration rate of between 120 and 140 per cent.

Bahrain’s Batelco reported net profit of BD104.2 million (US$276.4 million) for 2008, up 2.7 per cent over 2007.

Revenues for the year grew by 8.9 per cent year-on-year to BD319.1 million, while net revenues were up10.1 per cent to BD251.4 million.

Batelco’s board of directors will recommend a cash dividend of US$191 million.

Chief executive Peter Kaliaropoulos said while Batelco’s strategy includes growth and diversification into new overseas markets – such as the telco’s 49 per cent acquisition of Indian operator S Tel earlier in the week –Batelco’s operations in Bahrain remain critical to the operator’s overall future success. In 2008, BD 40.9 million was committed to capital expenditure in Bahrain alone.

“We have successfully completed our NGN (next generation network) project which gives Bahrain the honour of being the first country in the world with complete countrywide broadband and delivers our promise to make Internet access readily available to all residents of the Kingdom,” stated Kaliaropoulos.

Batelco counted 767,000 mobile users in Bahrain at the end of December, 205,000 fixed-line customers and 82,000 broadband users.

STC yesterday reported a 62 per cent plummet in fourth-quarter profit, blaming it on foreign currency fluctuations. Profit during the quarter amounted to SR1.17 billion (U$311 million) in the three months to end-December, down from SR3.06 billion recorded for the same period a year earlier.

“The drop in the fourth-quarter net profit … stemmed from currency differentials in the company’s investments abroad,” a STC statement read. It estimated the cost of currency fluctuations at SR2 billion.

STC has made investments in Maxis Group of Malaysia, Oger Telecom, and Viva, the third mobile operator in Kuwait, expanding the Saudi telco’s coverage area to include Turkey, India, Malaysia, Indonesia, Kuwait and South Africa.

“I’m not convinced with this explanation of the FX (foreign exchange) effect having such a significant impact on STC’s profitability in the fourth quarter,” commented a research analyst at Dubai International Financial Centre, speaking to Comm. “I looked at the currency fluctuations of the Indian rupee and the Malaysian ringgit, and in some cases currencies appreciated during the fourth quarter, so it puzzles me for STC to have been impacted so adversely by fluctuations,” he added.

In contrast, second placed Saudi mobile operator Mobily exceeded analysts’ expectations for Q4, recording a profit of SR778 million for the three months to end-December. This represented a year-on-year rise of 51 per cent. Mobily attributes the increase in 2008 earnings to an increase in customer numbers, minutes of communication and increasing demand of broadband services.

Full-year net profit at Mobily grew almost by the same rate to SAR2.09 billion from SAR1.38 billion in 2007, while full-year total revenues soared 30 per cent to SAR10.79 billion.

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Ericsson today announced its Q4 and full-year results, more than a week earlier than the scheduled date of January 29, and prompted by a keenness to detail its strong operational performance in the last quarter of 2008.

A poor performance at Sony Ericsson impacted Ericsson’s profitability in 2008

Sales were up 23 per cent year-on-year during the quarter to SEK67 billion (US$8 billion), while operating income came in at SEK9.2 billion, up 21 per cent year-on-year. However, net income for the quarter came in at SEK4.1 billion, a 29 per cent decrease from the fourth quarter in the previous year, which Ericsson attributed to restructuring charges and a dramatic drop in the contribution from Sony Ericsson.

Restructuring charges in Ericsson amounted to SEK2.3 billion in the quarter, with the company’s share of restructuring charges in Sony Ericsson amounting to SEK700 million.

For the full-year, sales at Ericsson amounted to SEK208.9 billion, up 11 per cent year-on-year. Net income for 2008 amounted to SEK11.7 billion, representing a 48 per cent decline compared to net income for 2007. Ericsson’s restructuring charges for the full-year amounted to SEK6.7 billion.

“Operating margins, excluding Sony Ericsson, have steadily improved, and our financial position is strong with net cash of SEK35 billion,” commented Ericsson CEO Carl-Henric Svanberg. “Sony Ericsson is affected by the economic downturn and the declining demand in the consumer market and has taken the necessary actions,” he added

Looking to the year ahead, Svanberg believes the effects of the global economic recession should not be that significant as most operators have healthy financial positions, and there is strong traffic growth. “It remains, however, difficult to more precisely predict to what extent consumer telecom spending will be affected and how operators will act,” Svanberg cautioned. “To date, our infrastructure business is hardly impacted at all, but it would be unreasonable to think that this would be the case also throughout 2009.”

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The annual GSM-3G Middle East conference brings together the region’s stakeholders in an atmosphere of honest information exchange and strategic reflection. While this year’s event was somewhat muted by the ongoing financial crisis, insights were offered into broadband, branding and the requirement to know the needs of one’s customer better at this point than at any other time in the past

Etisalat’s chief corporate affairs officer Nasser Bin Obood believes it is time for the UAE’s telecoms regulator, TRA to allow the operator to exercise greater flexibility with respect to the setting of competitive tariffs. Given Etisalat’s incumbent position in the UAE, the telco is deemed to have significant market power and as such has its pricing plans and tariffs heavily regulated by the TRA.

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