Zain’s customer base increases 54%, earns $327m in Q3 2008
Written by Miebi Senge
Monday, 27 October 2008
ZAIN, a leading emerging markets player in the field of telecommunications who also aims to become one of the top 10 global mobile operators by 2011, has made significant financial gains in its third quarter (Q3) 2008 report; it also recorded substantial increase in its subscriber base with by 54 per cent to 56.3 million.
According to the report which was released at the group’s corporate headquarters in Kuwait, for the third quarter of 2008, it earned consolidated revenues of $1.887 billion, an increase of 25 per cent compared to the corresponding period of 2007.
The company’s consolidated EBITDA increased by 20 per cent for the same period to reach $763.6 million. It’s consolidated net profits reached $326.6 million, an increase of seven (7) per cent compared to its Q3 2007 profits.
Zain, already the leading mobile telecommunication operator across the continental Middle East and Africa (MEA) present in 22 countries. Customer growth across the MEA region (22 countries) is 54 per cent with the Group serving 56.3 million managed active customers at 30 September 2008.Its challenging period was highlighted by $4.5 billion capital raising, launch of services in the Kingdom of Saudi Arabia, the rebranding of African operations and ‘One Network’ expanded to link the MEA region.
Dr. Saad Al-Barrak, Zain Group’s Chief Executive Officer said: “This quarter has been both the most challenging and most rewarding in Zain’s corporate history since the launch of our profitable expansion strategy in 2003, laying the foundation for our 2011 targets of being a top 10 global telecommunications company. Despite financial turmoil across the globe, we are delighted to have succeeded in raising $4.5 billion through our capital increase. Additionally the launch of services in the Kingdom of Saudi Arabia has been very successful given we have acquired one million customers in less than two months notwithstanding the fierce competition in that market.”
“Our ground-breaking ‘One Network’ service now linking two continents is playing a pivotal role in customer acquisition, contributing to the success of the Saudi Arabia launch as well as in the other 15 operations where it is available. The Zain brand has been warmly received across the African continent since its explosive launch on August 1, 2008. Through one brand, we will be better positioned to offer our customers common state-of-the-art products and services such as ‘One Network.’”
“In recent years, we have invested heavily in both licence acquisitions and network upgrades on two continents so as to meet our 2011 targets of 150 million customers and $6 billion EBITDA. Nevertheless, we continue to record impressive financial results this quarter reflecting exceptional operational efficiencies and we expect even better results in the years ahead. Our Kuwait operation continues to contribute considerably to our net profit and our team are focussed on strategies to contest the 3rd mobile entrant expected later in 2008. The Bahrain operation continues to shine exceeding all targets, while our operations in Iraq, Jordan and Sudan are maintaining their respective markets share in competitive and challenging environments. The integration of the acquired Iraqna operation in Iraq has been successfully completed and we expect to reap the rewards in the not so distance future.
“Our Nigerian operation is witnessing exponential customer growth based on the heavy investment in network upgrades and expansion. We are extremely excited by the future potential in all facets of this operation. In East Africa, our Madagascar, Tanzania and Uganda operations focus on customer acquisition is paying off, all three recording impressive results. We expect our revamped Kenyan operation to follow suit as the new management team is now totally geared to the challenges ahead with concerted Zain Group support on all fronts. Our Ghana operation will commence mobile services by the end of 2008.” One Network connects two continents, abolishing high roaming rates.
On 1 August 2008, with the launch of the Zain brand across the African continent, Zain extended the ‘One Network’ service to connect Africa and the Middle East offering up to 500 million people favorable rates for cross-border communications. Zain customers in 16 countries can now stay in touch with loved ones or do business, free of high roaming charges.
“This truly is a defining moment in the history of global telecommunications. We believe that being connected to such a valuable service will be one of many factors that will attract customers to Zain,” said Dr. Al-Barrak.
On September 20, 2008 Zain announced the successful completion of its capital increase raising $4.5 billion with 99 per cent of all shareholders subscribing. The amount raised is unprecedented in Kuwaiti’s history exceeding all expectations, given the gloomy trends that have recently dominated local and international markets and resulted in sharp declines in the prices of oil as well as significant collapses in the financial markets worldwide.
“The successful completion of this capital increase was an unanimous vote of confidence by our shareholders in Zain’s management team, the performance to date and in our profitable expansion strategy,” said Dr Al-Barrak. He noted that proceeds from the successful capital increase “ will provide the company with the liquidity necessary to continue its ambitious expansion strategy, while reducing the borrowing costs of the company’s operations and increasing shareholder value in the long term as well as in financing future strategic expansion plans.”
Zain was established in 1983 in Kuwait as the Middle East’s first mobile operator. Over the years it has grown significantly becoming the 4th largest mobile network in the world in terms of geographic presence with a footprint in 22 countries spread across the Middle East and Africa providing mobile voice and data services.
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