Zain SA records revenues of US$135 million in 120 days

With commercial operations commencing on August 26, 2008, the Board of Directors of Zain’s mobile operation in Saudi Arabia announces the 2008 results reflecting 120 days of business activity to December 31, 2008. For this period gross revenues reached US $135 million (SAR 505,196 million) with active customer numbers totalling 2,010,000 (2.01 million) representing an impressive 7% market share of mobile users in the Kingdom.

In addition, the company announces a gross profit of US $4.27 million (SAR 16 million) and a net loss for the period of US $608 million (SAR 2,278 Billion), reflecting only 4 months of revenue, yet 18 months of start up and operating costs inclusive of the Initial Public Offering and the launch / preliminary branding campaigns which alone amounted US $112 million (SAR 418 million).  As is the norm in newly established mobile operations with regard to relatively high and one-off start-up expenses, the company in many ways has already benefitted from and expects to reap future positive returns from these investments through further brand awareness, customer acquisition and resulting revenues.  

The Chairman of Zain in Saudi Arabia, HRH Prince Hussam Bin Saud Abdul Aziz commented, “These excellent results in such a short time reflect both the prudent strategy of the management team in coordination with Zain Group worldwide and the concerted efforts of all Zain personnel in providing Saudi customers with a wonderful range of products and services complemented by a modern and super efficient network that is the envy of our competitors.”

During its short tenure to date, Zain Saudi Arabia has launched several customer acquisition promotions that have been extremely well received in the marketplace. Additionally the 3G technology enabled network is operating at optimal levels and is currently capable of serving of 5 million customers, thus not suffering from congestion problems.     

On his part Dr Saad Al Barrak, Zain Group CEO noted, “On entry into this promising market, we made a commitment to the Saudi consumer that they will receive world-class offerings, one that we have fulfilled. Their (2 million of them) response was to join the Zain mobile family resulting in our revenue targets for 2008 being exceeded by an outstanding 27% to the delight of all our stakeholders.”

Dr Al Barrak further added, “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. Our financial targets have been meticulously laid out and we expect the company to be profitable within a 3 year time frame.”    

Zain was successful in attaining the 3rd GSM licence in the Kingdom of Saudi Arabia in 2007 for an investment of US $6.1 billion. In February 2008 the company completed its record breaking IPO that saw 8.5 million subscribers request for their share of the 700 million shares (50% of the company’s capital) on offer raising US $1.87 billion (SAR 7 billion). On August 26, 2008 the company commenced its commercial operations offering 2G voice and 3G hi-tech broadband services now covering 95% of the populated area with 15 major highways and 44 cities covered by the Zain network and the remaining through a national roaming agreement. The company has invested over US $1.5 billion in network rollout to date.
     
Finally Dr Marwan Alahmadi, CEO of Zain in Saudi Arabia, “Given our strong financial structure and expansionary plans to cover 100% of the Kingdom, Zain Saudi Arabia has several means of financing available to further expand our modern network such as Islamic Murahaba and other conventional financing.”

Dr Alahmadi concluded, said “Our achievement of attaining a 7% market share in 4 months is recognition by Saudi consumers of the Zain brand and its accompanying benefits such as the One Network allowing mobile telephony free of roaming charges for Zain travelling customers. The promising results to date are just the beginning of better things to come and we will be relentless in enhancing our product offerings attracting more customers to the wonderful world of Zain.”

 

25/02/2009