RIYADH, 18 October 2005 — Saudi Telecommunications Co. (STC) nine-month net profits rose 20 percent to SR9.18 billion ($2.45 billion) as it won new subscribers despite facing competition for the first time, the company said yesterday.
STC, which retains a monopoly on land line telephones until 2007, has had to cut rates to compete with Etihad Etisalat’s (Mobily) mobile service which was launched in the Kingdom in May. Despite the reduced charges and the new competition, STC reported third quarter net profit rose 29 percent from the same period last year to SR3.26 billion, and said it was still attracting new mobile subscribers.
Nine-month operating revenues grew 6 percent to SR24.06 billion, although third quarter operating revenues rose a more modest 3 percent to SR8.10 billion.
Analysts expect the mobile market in Saudi Arabia to double to 24 million users by 2009, partly because of a booming economy in the world’s biggest oil exporter. But Mobily has made an aggressive start to operations in Saudi Arabia, reaching 1 million subscribers by August - four months ahead of its end-year target.
Analysts say it could capture a larger chunk of the new customers than STC, which had nearly 10 million mobile subscribers at mid-year.
Shares in STC, the Kingdom’s second largest listed firm in terms of market capitalization, closed yesterday’s morning trade up 0.29 percent at SR939.75, just 5 percent off a record high of 995 riyals in August.
