By: Mohammed Abu Meleeh
Riyadh – Mubasher: Saudi Telecom Company (STC) revenues is expected to reach SAR 13 billion ($3.47 billion) in the first quarter of 2016, according to a report by Saudi Fransi Capital (SFC).
The report, released on Thursday, also forecasted the number of subscriptions to the company to lower following the decision of the Communications and Information Technology Commission to cut interconnections rates, coupled with the competition with its rival Zain.
SFC expected STC to make a net profit of SAR 3.19 billion ($850.59 million) in Q1-16, keeping its ‘Buy” recommendation on the company’s stock at a target price of SAR 77 ($20.53).
Meanwhile, ETIHAD Etisalat (Mobily) is expected to make revenues of SAR 3.4 billion ($906.6 million) in Q1-16, with revenues from data services reaches 41% of total revenue.
The number of subscriptions to Mobily is anticipated to reach 13.2 million in 2016 and 17.5 million by 2020.
The report showed net losses of SAR 36 million ($9.6 million) in Q1-16, with ‘Hold’ recommendation on the stock at SAR 23.1 ($6.16).
In terms of Zain, SFC foresaw revenues of SAR 1.6 billion ($426.6 million) in Q1-16, with a rise of 25% in the number of subscribers to 12.5 million subscriptions and ‘Hold’ recommendation on the stock at a target price of SAR 10.6 ($2.83).
Fransi suggested that the decision to cut roaming rates in the GCC may negatively affect telecom providers operating in GCC countries.
Translated by: Elwy el-Manzalawy
