The value of the information and communications technology (ICT) in the Middle East is set to jump from projected $15 billion in 2014 to $20 billion in 2020, backed by huge regional investments, as well as more state spending on infrastructure projects.
Amid such an optimistic atmosphere, eleven GCC-based telecom companies have achieved $7.28 billion combined earnings for the first nine months of FY14, representing a rise by 7.92% from $6.75 billion in the same period a year earlier, according to Mubasher statistics.
Meanwhile, combined earnings of these companies fell 7.91% in Q3 to $2.09 billion from $2.28 billion. This decline was attributed to pressures from Saudi Mobily whose earnings fell 71.1%.
Bahrain’s Batelco recorded the biggest earnings growth in the third quarter (+39%), followed by Zain KSA that trimmed losses by 24.95%, then UAE’s Etisalat (+21.6%).
At the nine-month level, Vodafone Qatar saw the biggest growth after it cut losses by 49.4%, followed by Saudi Telecom (STC) with 35% growth.
Six GCC telecom companies posted profit growth or managed to trim losses in the three-month and nine-month periods, while five others reported lower earnings.
At the level of the first nine months of FY14, nine companies posted growth in their earnings or narrowed their losses, while four others posted profit decline.

GCC Telecom Firms’ Profits for Q3, 9M-14 ($mln)
		Q3-13	Q3-14	%	9M-13	9M-14	%
STC	KSA	902.8	899.1	-0.41	1,692.4	2,284.3	35.0
Mobily	KSA	435.2	125.8	-71.09	1,131.8	665.7	-41.2
Zain KSA	KSA	-112.2	-84.2	24.95	(317.1)	(256.8)	19.0
National Mobile Telecommunications (Ooredoo)	Kuwait	54.2	27.8	-48.63	203.8	161.5	-20.8
Zain	Kuwait	187.1	163.4	-12.64	584.6	568.3	-2.8
Ooredoo	Qatar	92.7	102.9	11.09	568.3	571.1	0.5
Vodafone Qatar	Qatar	-14.6	-14.7	-0.75	(44.0)	(22.3)	49.4
Etisalat	UAE	497.3	604.8	21.60	1,532.9	1,839.5	20.0
Du	UAE	129.2	152.2	17.79	385.9	435.1	12.8
Omantel	Muscat	75.6	77.9	3.09	912.8	928.7	1.7
Batelco	Bahrain	30.5	42.4	39.13	97.3	108.4	11.4
Total		2,278	2,098	-7.91	6,749	7,283	7.92

Saudi Arabia’s STC accounted for 31.36% or one third of the combined earnings for the first nine months of FY14. It was followed by UAE’s Etisalat (25.26%), followed by Omantel (12.75%). Meanwhile Mobily share fell from 16.77% in the first nine months of FY13 to 9.14%.

Due to the auditing errors for Saudi Mobily, the combined earnings of GCC telecom companies fell for two successive quarters after rising for five successive periods.
At the level of stock performance among GCC telecom companies, Vodafone Qatar came on top with a rise by 83.05% year-to-date. It was followed by STC (+36.27%), then Batelco (+17.85%). On the negative side, five other companies moved lower, led by Mobily (-28.44%), followed by UAE’s du (-20.18%) and Kuwaiti Zain (-11.3%).
Omantel came on top by P/E ratio (9.94x), followed by Mobily (10.79x), du (11.03x), while Qatar’s Ooredoo has the highest P/E ratio of 15.10x.

(written by Mohamed Abo Meleeh; translated by Sayed Abdel Rahman)