The GCC countries have around 235 companies operating in the various industries within telecommunications sector, according to a report by Kuwait and Middle East Financial Investment Company (KMEFIC).
The GCC industry houses a wide range of sub-industries ranging from simple retailers of phones and their accessories to major infrastructure providers, the report said.
Saudi Arabia tops the list with 89 companies, followed by the UAE with 86 companies, Kuwait, 29 companies, while Oman, Bahrain, and Qatar together house 31 companies, the report said.
There are 12 listed telecom companies in the GCC countries. The GCC governments have different levels of ownership in these companies ranging from 0 percent (Zain-Saudi Arabia) to a substantial 84 percent as in the case of Saudi Telecom Company Co. (STC), according to the report.
Usually, the governments of the GCC countries invest in telecom companies through their pension funds, sovereign wealth funds, ministries, and other government-owned entities.
Meanwhile, corporate ownership level varies from one company to another. For example, four of the twelve listed telecom companies have no corporations amongst their owners while the share of corporate ownership in the other eight companies ranges from 16 percent (Zain-Kuwait) to 55 percent (Nawras-Oman). Saudi Arabia's STC and UAE's Etisalat, in addition to Qatar's QTEL and Oman's Omantel, have no corporate investors. The same set of companies along with UAE's DU and Bahrain's Batelco have a level of government ownership that exceeds the average in the GCC, which stands at 40 percent, the report said.
On the other hand, some companies in the GCC states allow ownership up to 100 percent for both GCC nationals and foreigners, other companies reserve ownership exclusively to citizens.
Bahrain's Batelco and Kuwait's Zain and Wataniya have no ownership restrictions; foreigners and citizens can possess 100 percent ownership in them. Ownership in the second set of telecom companies, three Saudi companies and two Omani, is fully open to GCC citizens while permitted foreigner ownership levels are restricted to 49 percent in Omantel, Mobily, Zain-Saudi, and STC. An exception is Nawras which is 70 percent open to foreigners. Qatari telecom companies allow only up to 25 percent ownership to both GCC citizens and foreigners whereas shares of UAE's Etisalat can only be owned by Emirati nationals, according to the report.
With regards to price performance, most GCC telecom companies saw their stocks decline over the past 7 years, with CAGRs ranging from -19.4 percent to 5 percent.
The most significant and double digit declines came from Nawras, STC, and DU. Only 2 stocks, Wataniya & Vodafone Qatar, broke the trend and witnessed an increase over the mentioned period, growing at a CAGR of 5.01 percent and 2.54 percent respectively, the report said.
The total market capitalization of the 12 GCC telecom companies is $90.8 billion. The weighted market capitalization for 7 of the 12 stocks did not exceed 5 percent; the smallest companies were Nawras (1 percent), Batelco (2 percent) and Vodafone Qatar (2.3 percent). On the other hand, only two companies had a weighted market capitalization exceeding 20 percent: STC (23.6 percent) and Etisalat (20.7 percent), the report said.
