During Zain’s first four months of operation in Saudi Arabia since launch in August 2008, the operator added 2.01 million subscribers to obtain a market share of seven per cent by December last year.
Zain Group CEO Saad Al Barrak expects the Saudi operation to break even within three years of launch
Zain revealed the 2008 results for its Saudi operation, which showed the company achieved revenues of SAR506 million (US$135 million), exceeding revenue targets by 27 per cent. The company also announced a net loss for the period of SAR2.28 billion, reflecting only four months of revenue, but 18 months of startup and operating costs. These costs included the initial public offering and preliminary branding campaigns.
“With the robustness of the Saudi Arabian economy playing a decisive role, we are very confident that Zain Saudi Arabia will be a shining star among the Zain group of companies and we expect that the huge investments in the brand and network to date will see even better results for 2009 and beyond. We expect the company to be profitable within a three year time frame,” stated Zain Group CEO, Saad Al Barrak.
Zain’s competitors in the kingdom are STC and Mobily, which combined have 26.6 million subscribers. Prior to Zain’s entry, Etisalat subsidiary Mobily had a market share of more than 30 per cent, having launched in Saudi Arabia in June 2006.
Zain was awarded the third GSM licence in Saudi in 2007 for an investment of US$6.1 billion. In February 2008 the company completed its IPO for 700 million shares, 50 per cent of the company’s capital, raising US$1.87 billion. The operator’s 2G and 3G network covers 95 per cent of the populated areas covering 15 major highways and 44 cities, with the remaining areas on a national roaming agreement. The company has invested more than US$1.5 billion in network rollout to date.
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