Mobile Telecommunications Company Saudi Arabia (Zain) announces signing an agreement with the Ministry of Finance, the Ministry of Communications and Information Technology and the Communications and Information Technology Commission, which includes the consolidation of the annual Royalty for commercial service and the settlement of disputed amounts for the period from 2009 to 2017
| Element List | Explanation |
|---|---|
| Announcement Detail | Mobile Telecommunications Company Saudi Arabia (Zain) announces signing an agreement with the Ministry of Finance (MOF), Ministry of Communications and Information Technology (MCIT) and Communications and Information Technology Commission (CITC), which include the following:
1. Consolidate the annual royalty fee and reducing it from 15% to 10% of net revenues starting from 01-01-2018. 2. Settlement of the disputed amounts between Zain and CITC regarding the payment of disputed annual royalty fee for the period from 2009 to 2017. Under the condition that Zain further invests in expanding its infrastructure in addition to other conditions over the next 3 years.
Zain announces that the agreement has the following positive financial implications on the company: 1. The expected financial impact of applying the unified annual royalty fees from 01-01-2018 to 30-09-2018 resulting in a decrease of SAR 220 million. This amendment will be reflected in the next financial results. The company also anticipates positive future financial impact from the reduction in annual royalty fees, which will be reflected in the company's future financial results. 2. The expected financial impact from the settlement of the disputed annual royalty fees for the period from 2009 to 2017 is expected to reach SAR 1.7 billion over the next three years, by implementing the terms and conditions of the Settlement Agreement with the CITC for investment in infrastructure. |
Comments