GCC Telecoms Operators: 2013 Performance And 2014 Outlook
The seven major telecoms operators in the GCC have announced the year-end results for 2013. The seven operators are STC (Saudi Arabia), Etisalat (UAE), du (UAE), Zain (Kuwait), Ooredoo (Qatar), Batelco (Bahrain) and Omantel (Oman). Four operators, STC, Etisalat, Omantel and du, reported net profit growth in 2013, while Ooredoo, Zain and Batelco reported profit losses for the twelve month period. Below, BMI analyses each operator's performance and the outlook for 2014, with an emphasis on their strategies for revenue and profit growth amid saturation of mobile voice markets in the GCC.
STC - STC's particularly impressive turn around in profitability was the result of restructuring its operational costs, mainly through the planned sale of its Indonesian unit, Axis, to Axiata. This allowed it to increase its focus on domestic operations, where it reported impressive 18% revenue growth in the enterprise sector and 80% revenue growth in the broadband segment, on the back on heavy investment in next generation fixed and mobile broadband networks, and new IT partnerships. BMI believes STC will continue pursuing this strategy throughout 2014, while remaining on the look-out for expansion opportunities closer afield.
Etisalat - While Etisalat's domestic operations still account for the bulk of the operator's revenues and profits, with strong take-up of mobile broadband services and its robust enterprise services portfolio supporting profit margins, the operator's foreign operations' contribution to total revenues rose to 33% in 2013, from 28% in 2012. BMI expects this trend to continue in 2014 and over the long term, as Etisalat increases its reach with the acquisition of Vivendi's 53% stake in Maroc Télécom, including its West African subsidiaries, and its foreign operations continue to record faster growth than the UAE's saturated market.
|Bigger Operators Stay Ahead|
|Revenues And Net Profits, US$mn (LHS) And Net Profit And Revenue Growth, % (RHS), 2013|