We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Tue 10 Nov 2009 06:33 AM

Font Size

- Aa +

Zain expects $1bn shortfall on 2009 revenue target

Kuwaiti mobile operator's CEO says global crisis will have impact on performance.

Kuwait-listed mobile operator
Zain

expects the global financial crisis and currency market turmoil to cut $1 billion from its forecast revenue of $9 billion this year, its chief executive said.

Saad al-Barrak also told Reuters that
Zain

had held talks to buy Syriatel, the top mobile company in Syria, which is under US sanctions, but the talks have been postponed for reasons he did not reveal.

"There was conversation, but we did not reach anywhere. This issue is now postponed," Barrak said.

Syriatel is controlled by Rami Makhlouf, a cousin of Syrian President Bashar al-Assad. The United Stats has also imposed specific sanctions on Makhlouf.

A deal to acquire Syriatel by Turkish company Turkcell in 2008 did not go through. The sanctions and US pressure contributed to the deal not being concluded, financiers said.

Barak said the US sanctions, which were imposed on Syria in 2004 and strengthened since, would not be a factor in any decision by
Zain

to expand in Syria.

"Syria is an area of interest. We don't believe in the American sanctions," Barrak said.

Barrak, who is attending an International Telecommunication Union conference in the Lebanese capital, said
Zain

's revenue would reach $8 billion this year, compared with a previous $9 billion forecast and actual 2008 revenue of $7 billion.

"The financial crisis has changed the consumption patterns ... exchange rate differences have also been a main factor," Barrak said.

Most of the rise in revenue this year compared with 2008 would come from regions where
Zain

had recently established, including Saudi Arabia, Iraq and Ghana, he added.

Zain

, which is listed on the Kuwaiti bourse, would make a statement with profit figures in several days, he said.

An Asian consortium is negotiating with main shareholders of
Zain

, including the Kuwaiti Kharafi conglomerate, to acquire 46 percent of the company. Indian state-run telecom Bharat Sanchar Nigam Ltd, which is part of the consortium, said last week it may open direct negotiations for a stake in
Zain

if its exclusive talks as part of the consortium fail.

As chief executive, Barrak said he did not know about the status of the deal.

Zain

operates in Africa and the Middle East, including Lebanon, where it has a contract to run one of the country's two cellphone operators, which were nationalised several years ago. (Reuters)

Arabian Business: why we're going behind a paywall

For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.