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Sun 11 Feb 2007 05:19 PM

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Wataniya rings in record profit

Profits are up at Kuwait's second mobile phone operator due to greater overseas operations.

Kuwait's National Mobile Telecommunications Co. (Wataniya), the country's second mobile phone operator, posted its biggest quarterly profit of 2006 as overseas units boosted subscribers.

Net income in the three months to Dec. 31 surged 68.5% over the year-earlier period to 23.08 million dinars ($79.81 million).

Wataniya's mobile phone subsidiaries in Iraq, Tunisia, Saudi Arabia, Algeria and the Maldives contributed to profit growth in the fourth quarter, the firm's Chief Executive Harri Koponen told Reuters.

While he did not have quarterly data, Koponen said Wataniya had around 10 million subscribers at the end of 2006, 56.5% more than it did the prior year according to figures in the company's 2005 annual report.

"We have been improving our operations steadily in many places. This is the end result of those efforts," Koponen told Reuters.

The company posted a 38.6% rise in full-year profits to 73.2 million dinars, said a statement posted on the bourse Web site after the close of trading. Wataniya proposed a 110% cash dividend.

The firm did not provide fourth-quarter data, which Reuters calculated from previous financial statements posted on the company's Web site.

Stronger-than-expected profits of Asia Cell, Wataniya's partly held subsidiary in Iraq, were probably behind the higher profits, said Amit Tripathy, a research analyst who covers the Kuwaiti telecom sector with Global Investment House.

The Kuwaiti investment bank, which gave one of two forecasts for Wataniya in a Reuters net profit survey in December, expected Wataniya's quarterly earnings would rise 46.6%.

"Asia Cell is probably outperforming," Tripathy said.

Koponen said Asia Cell, which accounted for a quarter of subscriber numbers in 2006, was "quite a contributor" to 2006 profits, without being more specific.

The company's Algerian unit doubled its customers last year to more than three million, Kuwait's Arab Times reported on Feb. 5.

Expanding abroad would be key to Wataniya's growth as mobile phone penetration in its home market exceeds 90%, Tripathy said.

Wataniya, the smaller of the two current Kuwaiti mobile service providers after Mobile Telecommunications Co., had around one million subscribers in Kuwait at the end of 2006, Koponen said.

Kuwait is preparing to license a third mobile phone company after cabinet approved a plan in December to further liberalise the telecom sector in Kuwait, the third-largest Gulf Arab economy.

"Wataniya is no more a Kuwait player. Room for growth is limited in Kuwait. The growth has to come from outside," Tripathy said.

Wataniya's Maldives subsidiary should make its first profit by the end of the year, he said.

The company also won in September a license to build and operate the second Palestinian mobile telecommunications service. Wataniya shares are up 13.5% so far this year.

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