RIYADH, 25 October 2007 — Etihad Etisalat (Mobily), Saudi Arabia’s second telecom operator, posted an 43.3 percent rise in third quarter net profit to SR311 million ($82.9 million).
The company made SR217 million in the third quarter of 2006, it said in a statement on the Saudi bourse website.
Now the company commands 40 percent of the market, up from 30 percent at the end of 2006, its chief executive Khaled Al-Kaf told Reuters by telephone yesterday.
“We are approaching 40 percent market share, maybe more,” Kaf said.
Mobily and incumbent Saudi Telecom Co. will face new competition next year when Kuwait’s Mobile Telecommunications Co. (Zain) starts a third mobile phone firm with other investors.
Telecom companies in Saudi Arabia, the world’s biggest oil exporter, may be generating a revenue of SR55 billion ($14.67 billion) in 2010, up 38 percent from 2006.
Growing competition in Saudi Arabia will demand tapping new revenue flows by providing data services, Kaf said.
Mobily would complete by the first quarter of 2008 its acquisition of Bayanat Al-Oula — one of two firms licensed to deploy WiMax wireless Internet access network in the Kingdom, he said.
It agreed to buy the firm for SR1.5 billion in September.
“We will start consolidating it in the second quarter of next year,” he said.
Mobily, which is already providing wireless Internet services, plans to launch new broadband services in the second half of 2008, Kaf added.
“We will make an aggressive entry into broadband services. The financial return will however take some time to reflect on our bottom line,” he said.
The company is not planning to distribute a dividend in 2007, Kaf said.
Mobily would continue to invest in building mobile and broadband infrastructure, he said. Mobily raised $2.88 billion this year in an Islamic loan to help fund expansion.
“The growth (in the third quarter) was not excellent, but it was good given competition, which is getting stronger in the Saudi market,” Kaf said.