How Zain’s Capex spending in 5G resulted into revenue growth

Zain Group has revealed its Capex spending in 2020 and how its investment in 5G business has resulted into revenue growth.
Zain 5G business
Zain hsa achieved notable revenue growth from 5G in Kuwait and Saudi Arabia that underscored the Group’s consolidated data revenue growth of 9 percent to reach USD 2.2 billion, representing 41 percent of the Group’s revenue for 2020.

Zain Group has invested USD 1.4 billion in Capex, representing 26 percent of revenues, predominantly in 5G rollouts in Kuwait and Saudi Arabia; 4G upgrades and new network sites across Iraq and Jordan; the expansion of Fiber-to-the-Home (FTTH) infrastructure; and spectrum license fees.

Zain’s revenue dropped 2 percent to KD 1.63 billion or USD 5.3 billion in 2020. EBITDA of Zain declined 8 percent to KD 673 million or USD 2.2 billion, reflecting a EBITDA margin of 41 percent. Net income fell 15 percent to KD 185 million or USD 605 million.

Zain’s revenue dropped 2 percent to KD 432 million or USD 1.4 billion in Q4 2020. EBITDA of Zain fell 10 percent to KD 172 million or USD 563 million, reflecting an EBITDA margin of 40 percent. Net income dipped 16 percent to KD 54 million or USD 176 million.

COVID-19 pandemic disrupted economic activity due to lockdowns and travel bans across Zain markets, impacting Group’s revenue by USD 417 million for the full year.

Cost optimization measures such as contracts renegotiation and management of cashflows succeeded in reducing operational expenses by USD 168 million.

Zain Iraq granted 4G license with mobile license extended to 2030.

“The management is giving a focus on driving efficiencies, cost optimization and monetizing our 4G and 5G networks. Our 4Sight strategy is taking shape, while seeking new value-creating business verticals that support our vision of becoming a leading ICT and digital lifestyle provider,” Zain Group CEO Bader Al-Kharafi said.

Zain Kuwait, one of the 5G markets for Zain, has a customer base of 2.6 million. It remains the Group’s most profitable operation with revenue for full-year 2020 reaching KD 321 million (USD 1.05 billion), EBITDA reaching KD 112 million (USD 367 million), representing an EBITDA margin of 35 percent. Zain Kuwait’s data revenue accounts for 38 percent of total revenue.

Zain Saudi Arabia, which is also a 5G market, has generated revenue of SAR 7.92 billion (USD 2.1 billion), EBITDA of SAR 3.44 billion (USD 918 million), reflecting an EBITDA margin of 43 percent. Zain Saudi Arabia’s data revenue grew 8 percent and represents 50 percent of total revenue with the operator serving 7 million customers.

Zain Iraq’s revenue reached USD 943 million and EBITDA amounted to USD 378 million, reflecting EBITDA margin of 40 percent. Zain Iraq has 16.2 million customers.