Zain reveals strategies for cost optimization and first profit in 9 years

Zain Saudi Arabia CEO Peter Kaliaropoulos
Zain Saudi Arabia has explained the strategies for generating the company’s first ever full-year net profit of SAR 12 million in 2017.

The telecom operator is considering this as a milestone achievement for the company since the commencement of commercial operations in August 2008.

Zain made an investment of SAR 1.1 billion in capital expenditure (Capex) in the year 2017 in addition to the acquisition of 1800MHz spectrum. The strategy behind the investment was to enhance the quality and competitiveness of its network in Saudi Arabia.

Zain also said the full deployment of recently acquired spectrum holdings in 2018 will have a positive impact on supporting Zain’s ever-increasing data needs of consumer and business customers and raising the quality of its services.

Zain Saudi Arabia has enhanced its focus on the growth of data services, utilizing 4.5G LTE network, acquisition of higher value customers, cost optimization and operational efficiencies and network investment in advanced technologies.

Zain Group CEO Bader Al-Kharafi said: “Our strategy was to increase monetization of data and digital services and ongoing focus on the improvement of the company’s operations and prudent efficiencies and optimization of its cost structure. Investment in 4.5G Advanced mobile network technology and increased customer centricity and care equally contributed to best-ever performance.”

Zain financials

The telecom company achieved revenues of SAR 7.3 billion despite a decline in international revenues amounting to SAR 693 million in 2017 primarily due to the impact of VOIP and lower number of prepaid customers.

Gross profits of Zain grew 11.6 percent to SAR 4,913 million in 2017 with a gross profit margin of 67 percent.

Zain posted operational profit of SAR 903 million in 2017, compared to an operational loss of SAR 54 million in 2016.

Zain Saudi Arabia recorded net profit of SAR 12 million against a loss of SAR 979 million in 2016.

Zain Saudi Arabia CEO Peter Kaliaropoulos in a statement said that the transformation of the telecom operator was underpinned by strong revenue growth from data services, dedicated customer care efforts, significantly improved network coverage, faster download speeds and, operational efficiencies.