Kuwait telecoms group Wataniya , facing fierce competition from rival mobile companies, wants internet services to provide a quarter of revenue within two years, its chief executive said on Monday.
Wataniya, majority-owned by Qatar Telecom (Qtel), reported a 36 percent fall in profits in its home market in the second quarter. This was due to increased competition from Zain and Saudi Telecom Co affiliate Viva, tax changes and stagnating subscriber growth, all of which weighed on margins.
The margin pressures have spurred Wataniya to try to increase income from internet services. Chief Executive Bassam Hannoun forecast data would provide a quarter of revenue within two years. He declined to reveal how much data contributed to revenue currently.
“It is less than 20 [percent],” Hannoun told reporters on the sidelines of a conference in Dubai. “The market in Kuwait is highly competitive, but it’s also a high value market, so the opportunities are still there. Kuwait has a lot more to give.”
He said the firm was already reworking its internet plans after the government said it could launch next-generation networks.
Earlier this month, Kuwait’s Ministry of Communications, the de facto industry regulator, gave a green light to allow the country’s three main mobile operators to launch so-called long-term evolution (LTE) or 4G services. These are built to carry data and potentially offer network speeds more than double that of the present.
Wataniya has operations in Algeria, Tunisia, the Maldives, Saudi Arabia and the Palestinian Territories. Kuwait remains its most important market, providing 30 percent of revenue and 64 percent of profit in the second-quarter.
Hannoun said Wataniya had no plans to delist from Kuwait’s bourse after Qtel upped its stake in stake in Wataniya to 92.1 percent from 52.5 percent.
The remaining 7.9 percent is held by shareholders that declined Qtel’s QAR2.6 per-share offer and Kuwait market rules have no provision to force them to sell, unlike in many other markets.
Yet some analysts suggested Wataniya could come to a special arrangement with the Capital Market Authority to do so, allowing Qtel to take full control of Wataniya’s assets.
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