RIYADH: An executive of Zain Saudi Arabia has rejected the media perception about the price war triggered by the steep fall in call tariffs and promotions launched by the three telecommunication companies in the Kingdom. Saad Al-Barrak, in his first press conference since taking over as Zain’s chief executive officer on April 1, said, “We never ever indulged in price war.”
Al-Barrak said, “We always sell at a premium since Zain is a brand. I also think that the two other companies, which have launched promotions in the Kingdom of late, are highly-respected companies and they know what they are doing,” he added. Asked about promotions and reductions that would certainly bring pricing pressure to the telecommunication industry in Saudi Arabia, he said that Zain was comfortable with its achievements and market share.
At the moment, all the three cell operators are busy reducing their own tariffs and introducing new packages in their fight to retain existing customers and win new ones. But Al-Barrak sounded optimistic, saying that Zain would act as a catalyst and propel the company to the 2011 target of being a top 10 global operator with a very substantial presence in Saudi Arabia.
This can also be substantiated by the impressive results, Zain has attained under a challenging environment and huge investments in network expansion, he added. Zain committed over $3 billion in network upgrades and expansion in markets such as Saudi Arabia, Ghana, Iraq, Nigeria and Sudan. These markets will continue to grow and Zain expects to reap further rewards in the years ahead especially since they are all part of one network.
“Overall, due to our massive network investment, we expect and are targeting a 30 percent increase on many of our financial indicators in 2009,” said Al-Barrak. Since its launch in Aug. 26, 2008, Zain’s financial results have exceeded expectations by nearly 30 percent with more than SR500 million in revenues. More than two million active customers signed-up within four months between August and December 2008. The operation, using state-of-the-art 2G and 3G mobile networks covers 95 percent of the Kingdom’s populated areas.
At the moment, Zain is the fourth largest mobile network in the world in terms of geographic presence, with a footprint in 22 countries spreading across the Middle East and Africa.
It has been providing mobile voice and data services to over 63.5 million active customers as of Dec. 31 last year. Zain Group’s new business model is expected to enable all its operations to focus on key customer facing activities. Since 2005, Zain has invested more than $12 billion in Africa and next year plans to inject about $2 billion in its 16 African operations as it looks for new acquisitions.